Liberals have always dreamed of killing Medicare

The plan for a $6 co-payment fee for every bulk-billed visit to a GP has generated anger across the country. Health Minister Peter Dutton is on the attack claiming that health spending is “unsustainable”.

There is a long history to the Liberals’ hatred of Medicare. The scheme, then called Medibank, was introduced by the Whitlam Labor government.

It was bitterly opposed by both the Liberal opposition and the doctors’ association, the AMA. Doctors opposed anything that might limit their ability to charge what they liked. They campaigned against Medibank as the first step to a fully socialised health system, in which doctors would be employed by the government, as is the case under Britain’s National Health Service.

But, in fact Medicare was designed as a government insurance system—refunding patients for the use of health services like GP or hospital visits. This meant GP and specialist services continued to be privately-run, with the ability to set their own fees. But Medicare sets a standard rate for doctors’ services, like GP visits. If GPs agree to accept this rate, and bulk-bill the government for the visit, patients pay nothing.

The result is a system of universal healthcare, at least for GP and public hospital visits, which provides everyone with access to the same level of health services, regardless of their ability to pay.

Whitlam’s scheme was only in place for a year when the Liberals under Malcolm Fraser took power and set about dismantling it. The unions held a nation-wide general strike to defend Medibank in 1976.

Even so, the Liberals reduced Medibank to a safety net for pensioners and the poor; introducing a 2.5 per cent levy on incomes while allowing anyone with private health insurance to opt out.

The Hawke Labor government introduced Medicare after it came to office in 1983. Hawke’s move to impose a co-payment fee in the August 1991 budget was one of the issues that saw Hawke replaced as Prime Minister by Paul Keating, who scrapped the plan.

When John Howard took power, he froze the rate for Medicare payments to GPs, leading to a large decline in the proportion of GPs offering bulk billing. He threatened to “pull Medicare right apart” and “get rid of the bulk billing system” and described bulk billing as “an absolute rort”. A huge public outcry forced Howard to reverse the decision and increase Medicare payments.

Howard wanted to kill-off Medicare as a universal health system and reduce it to a safety net available only for the very poor. The rest of the population would be forced to either pay directly or take out private health insurance—a US style health system that would leave many unable to afford the health care they need.

Before the introduction of Medicare, unpaid medical bills were the biggest single issue before the small claims court, and commonly saw people sent to prison. This remains true in the US.

Private health

While Howard had to retreat on Medicare, he put great effort into pushing private health insurance, arguing it was a way to take pressure off the public hospital system.

But it is a fraud that simply boost the profits of the private health companies. Last year the private health insurance rebate cost the government a staggering $5.5 billion. Scrapping it and redirecting the money directly into the public hospital system would deliver better services for less money.

A universal public health system helps to keep overall costs down. The US spends 17.9 per cent of GDP on health, compared to Australia’s spending of just 9 per cent. Yet, in the US, 46 per cent of people said that cost prevented them visiting the doctor with a medical problem, compared to just 21 per cent here. And 50 per cent more people in the US die because they did not receive needed medical treatment.

Today 81 per cent of GP visits are bulk billed, fully paid through Medicare.

But there are still significant out of pocket costs to pay for other services like prescriptions and referrals to specialists. A study published in the Medical Journal of Australia last year found that the average cost for younger households was $1900 on top of private health insurance. And health care is one area where the average cost is often a poor guide, since those with serious or chronic illnesses pay a lot more than the average.

The Liberals want to force us to pay even more in fees and charges, and to undermine the principle of universal health care. But the widespread opposition to the $6 co-payment and the successful demonstrations held so far, shows they can be stopped.

By James Supple


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