Wilson Tuckey (O'Connor, Liberal Party) Share this | Hansard source

In concluding my remarks on the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2006, when this bill was before the House I was talking about the huge conflict of interest in our health administration resulting from the fact that we virtually have a public sector health insurance scheme known as Medicare, operated by the Health Insurance Commission, competing with Medibank Private which is, at this point, a government-owned private insurance provider. Because these two services are available to the community, there is a dichotomy between those who at least believe they are young and healthy, and those who, as they approach older age, end up with a lot of non-elective surgery requirements which, with modern-day technology, are increasing in their effectiveness and also, unfortunately, their cost.

The response in years gone by to those with arthritic hips was to give them either a pair of crutches or a wheelchair. Whilst that did not give much relief, it certainly had a finite associated cost. Today, fortunately, we can have all sorts of medical interventions, but they have substantial costs. People’s hips and knees are a common area of so-called elective surgery—though, considering the pain that people experience, it is hardly elective. Eye operations, particularly for cataracts, are also available through day surgery. Highly skilled practitioners are required and they expect to be remunerated accordingly. Recently, I had a report of such an operation costing $8,000. I know that in some cases it does cost less.

The fundamental principle of insurance is that you must have an adequate cross-section of low- and high-risk members. Because of the Medicare/private health dichotomy—age is so relevant in health services requirements—a huge percentage of our community, frequently quite highly remunerated, say, ‘I’ve paid my taxes; I’ve paid my Medicare levy’—which this legislation deals with—‘and that’ll do me.’ Notwithstanding other issues I have raised of public hospitals and their budgeting arrangements, if you are young and you get hit by a bus, have a car accident or suffer a sporting injury, or even have a premature heart attack, the public health system will respond promptly to those sorts of outcomes. And that is fine. But people operate in that knowledge and, consequently, make no contribution to the costs incurred by the elderly in terms of elective surgery. Therefore, it has been my longstanding argument that we should go one way or the other—though in my philosophical position there is only one choice. You either have an English public health system—which I oppose—where you aggregate all funds on that side of the ledger, or have everybody involved in a private health insurance concept. In other words, you do not have the public health commission competing with the private insurance sector in a very special form of insurance where risk is so easily identified. It is not like your house burning down, or the other types of damage, from a cyclone or whatever; you can cast the odds on that.

Obviously, you could not just say to the community, ‘As of tomorrow, there is no Medicare.’ In the process of selling Medibank Private, I would also sell the private Health Insurance Commission and hope that thereby it all got into the private health arena. But that of course raises an immediate question: how would many people afford those premiums? We have already got that criteria covered, but in a non-targeted fashion, with the private health insurance rebate—a flat 30 per cent and then jumps to 35 and 40 per cent at 65 and 70 years. My argument is that a better form of targeting would be, for instance, to say to fully-fledged age pensioners: ‘We will increase your pension on the actuarial establishment of your private health insurance premium.’ I would do the same for children. And I would provide, at a very high level, targeted assistance to other persons of pensionable age.

Back in 1988, I did those numbers, and it was surprising how easily they can be achieved—with outlays below the present budget cost. That is not by cheapskating; that is because of the fundamental principle of insurance: if all the money is available to the private insurance sector, they are able to lower fees. The reason fees were running amok during the last year or two of Labor—and I think it was a conspiracy—was that there was no assistance to people in private insurance, and every time the premiums went up the better risks left and the premiums went up further. That has been ameliorated to some extent by the application of the subsidy. I think the subsidy is not targeted and it should be targeted. But I would rather see it targeted in the concept of everyone in private health insurance, with targeted assistance according to their financial position, their age and other factors. It is very much achievable, according to the arithmetic. It would make the services of health cheaper. Above all, it would pay all hospitals, government and private, a fee for service, and that wipes out waiting lists.

When the Labor government sold the Hollywood repatriation hospital to the private sector, their waiting lists—which were 10 months, typically—disappeared in three months by the simple act of the private operator opening the operating theatres on Saturdays. These are the sorts of responses that the private sector can have on a fee-for-service basis. The member for Lalor might think a bit about those words. (Time expired)

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