A coalition of health groups has today launched a campaign calling for reform of Medicare to address the rising out-of-pocket health costs, lengthening delays for elective surgery and widespread disparities in access to doctors and other health professionals. 

The MEND MEDICARE coalition comprises: the Australian Nursing and Midwifery Federation, Catholic Health  Australia, Consumers Health Forum of Australia, the Mental Health Council of Australia, and the Public Health Association of Australia.  The Coalition has released a report which highlights the many inequities in the current system, specific in relation to people with chronic and complex problems, those in rural and regional areas and in relation to preventive health care.  The Report calls on party leaders to spell out their plans for Medicare before the next election, including addressing waste within the current system, looking funding models that better support care for people with chronic conditions and addressing inequities of access.

The AMA is not (unsurprisingly) a member of the MEND MEDICARE coalition. However, it too has called for action on Medicare via increasing rebates in line with the rise in health care costs.  In a video on this issue, AMA President Dr Steve Hambleton argues that AMA rebates have been devalued by 40% since 1986 and that this is resulting in higher out-of-pocket costs for consumers.

The MEND MEDICARE coalition argues convincingly that it is time for major reform of Medicare.  Medicare was developed to meet the needs of a previous generation and since its inception in 1983 these needs have changed in a number of ways.  In particular, we have a much greater incidence of chronic and complex illness which typically requires care from multiple providers, in a number of settings and over a long period of time.   Medicare was designed to support short-term, episodic care, from a single health professional and its fee-for-service and medical-centric approach does not support the multi-disciplinary, coordinated and consumer-centred care that is now required.

Another crucial change is that since 1983 we have become much wealthier.  Rising property prices and increasing superannuation funds have resulted in middle and upper income earners acquiring much larger savings than at any other time in Australia’s history. The Australian Bureau of Statistics shows that in 2009-10, middle wealth households held $556,000, and the top 20% held $2.4 million in assets on average. While not all of these would be liquid, a significant proportion of them are, in particular as people reach retirement age and the restrictions on accessing superannuation are lifted. 

As the MEND MEDICARE coalition argues, Medicare no longer warrants sacred cow status. However, the assumption that most Australians, most of the time, need a government program to help them pay for their health care is a sacred cow that itself needs to be challenged.  The figures put out by the MEND MEDICARE coalition show that Australians spent, on average, more than $1,070 a year on health services and products, meaning a typical family can shell out more than $4,000 a year. It also states that the average out-of-pocket cost for a non bulk-billed GP consultation in 2012 was $46.50. Given the level of wealth of the average Australia family, those figures hardly seem unreasonable.  It is worth questioning whether they warrant a universal health insurance program of the scale of Medicare.

Of course, the issue in health is that few people are average.  People are either sick or well and those who are sick spend much more than average on health care and those who are well spend much less.  From both an equity and efficiency perspective we need to ensure that resources are focussed on those with the greatest need. This group (or groups) can be difficult to identify as health care affordability can be as much to do with the type of illness and the timing of care needs as it is to do with overall income level. A healthy young person on a low income is probably much more able to meet her own health care costs than a family on a middle, or even high, income where one or more members have a chronic illness. 

Identifying and targeting people with genuine difficulty affording health care, over the long term, is the key to ensuring Medicare resources can be used most efficiently to reduce current inequities of access and health outcomes.  This will be particularly difficult to achieve given that members of the MEND MEDICARE coalition have different views on how Medicare should be reformed. For example, Catholic Health Australia is promoting the Medicare Select proposal put forward by the National Health and Hospital Reform Commission. Medicare Select involves giving Australians a choice of a health and hospital plan, either insured by Medicare or a private health insurer. This would entrench the role of a third party payer for ‘normal’ health care expenses and expand the role of private health insurance, a funding mechanism that has administrative costs more than double that of Medicare(as a proportion of total funding).

The MEND MEDICARE coalition has a tough lobbying task ahead with both major parties.  Labor knows the brand value of Medicare – so much so that it named its Primary Care Organisations ‘Medicare Locals’, despite the fact that they have nothing to do with Medicare.  The Government will do nothing to risk undermining the value of this brand, but may recognise the need for some tweaking of Medicare to address the identified problems.

Perversely, the Coalition will be an even more difficult challenge. While its more market-oriented philosophy should lend itself to a Medicare reform agenda, the Coalition will shy away from any policies which Labor could argue undermine Medicare’s currency. For all its rhetoric, the Opposition is unlikely to find that its concept of ‘personal responsibility’ stretches as far as requiring a person on $200k a year to fund their annual flu shot without the aid of a government program.

However, regardless of whether this campaign achieves its outcomes this election, it has raised some important issues about the future of Medicare which future governments will need to address.

 

 

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