Study rejects $1.3bn healthcare plan
By Shelly Simonds An ANU academic has criticised the Howard Government's promotion of a two-tier health system through its $1.3 billion private healthcare rebate, announced as part of the new tax package. Dr Gwen Gray, of Political Science in the Faculty of Arts, said that the money would be better spent on improving the public healthcare system. "I disagree that public dollars should be spent subsidising extra benefits for the well off," Dr Gray, who is completing a comparative study of two-tier health systems around the world, said. The government is already offering subsidies, designed to keep people in private cover, at a cost to tax payers of an estimated $600 million per year. These subsidies have proven a failure as thousands of people dropped their private health cover over the past year, she said. "The government is supporting a socially divisive policy, pitting the 'haves' against the 'have-nots'," she said. "What is wrong with a strong universal health system for everyone?" Dr Gray pointed to studies in Britain that show the private health system is subsidised by the public system, where most doctors and nurses receive their training. She noted that in Australia, private hospitals do not offer a full range of services but concentrate on more profitable areas such as elective surgery. For expensive services including emergency-room care, the private sector depends on public facilities. Lavish private hospitals, which compare their services to those of high-class hotels, also raise expectations about the level of service on offer in hospitals. Dr Gray calls this the "demonstration effect", which puts pressure on public facilities to upgrade services which are not part of a hospital's core operations. "Is it really fair that we spend public dollars to subsidise conspicuous consumption in health?" she asked. "It might be fairer to subsidise limousines for the well-off, at least that wouldn't impact on something as important as people's health care." Although an increase in the percentage of Australians in the private sector might save the government money in the short run, it will eventually increase healthcare costs for everyone, she said. With a large public sector the government can prevent spiralling costs by putting caps on the amount paid to doctors or spent on adopting new technology. The private sector faces more pressure to adopt the latest technological innovation no matter how expensive and it is able to pass on the cost to insurers, Dr Gray said. The United States was a good example of where health costs had spiralled out of control. Dr Gray acknowledged that private insurance increased freedom of choice for those who could afford it. "But what we are doing is spending public dollars on people who are well-off, with a lot of freedom of choice already," she said. Dr Gray said she was also against the $1.3 billion private healthcare subsidy because of the hidden costs borne, in the main, by women. About 90 per cent of the care given to the ill at home is provided by women and, as hospitals shorten patient stays, it is mostly women at home who meet the shortfall in the system. She estimates that the Howard subsidy constitutes about 3 percent of the entire health budget. This money would be better spent on community services and other support systems for clients and carers at home.