Luke Hartsuyker (Cowper, National Party) Share this | Hansard source

I welcome the opportunity to speak on the Private Health Insurance Bill 2006 and related bills, which will enhance the role of private health insurance in our healthcare system. I believe it is right to extend the freedom of choice to those who can afford it whilst ensuring the position of those who cannot. I believe it is right that we should take measures which seek to relieve the pressure on our publicly financed health services.

The introduction of broader health cover in the private health sector seeks to: firstly, remove the artificial financial incentive for hospitalisation in the private sector where clinically appropriate alternative treatments exist; secondly, reflect contemporary clinical practice in Australia which has been facilitated by advances in medical practice and technology; and, thirdly, align private health financing of chronic disease management and prevention with the public sector.

There are those, of course, who see no role for the government encouraging the private sector, whether in the health service or in our schools, and I will address some of those arguments later. But, first, let us look at the demands being placed on our health system. The number of patients admitted to hospitals in 2004-05 was seven million, an increase of some 2.6 per cent over the previous financial year. These figures are likely to continue to rise.

We already know that in the years to come we are likely to be in a position where a smaller proportion of working people are supporting a higher proportion of people entitled to various taxpayer funded benefits. It is also true that those working people will be supporting a rapidly increasing bill for public health services. The pressure on cost comes from not just population factors. Advances in medical science mean that more treatments and more expensive treatments are available. At the same time we are all aware of the demand for new and expensive drugs to be included in the Pharmaceutical Benefits Scheme, often for the benefit of a relatively small cohort of patients, but which are capable of making a huge difference to the quality of life of those patients. This is not to say that decisions about providing new treatments or drugs should be decided on the basis of the numbers who benefit. What it does say is that a humane and prosperous society like ours will have to think long and hard about how it finances its health care if it is going to continue to meet the legitimate demands of its citizens.

How much is the health service costing at present? The coalition government will spend some $48 billion in the current financial year, an increase of 138 per cent since 1995-96, representing 22 per cent of total Australian government spending. On public hospital funding alone, the coalition government will spend $42 billion between 2003 and 2008 under the Australian health care agreements, an increase of 83 per cent over previous agreements for 1993-98.

There are those who say that the current arrangements for funding hospitals should be changed. But let us put aside for the moment any arguments about the wisdom of disbursing this much money through the states and territories with little control over whether it is used effectively. That is something we should question. Let us put aside any arguments about whether that makes political sense. Whatever one’s position on those matters, we can surely agree that this is an issue that needs careful management. Why? We are dealing with, currently, more than one-fifth of government spending. The amount allocated has already increased more than 2½ times over 10 years and, according to some, is still too little. The numbers contributing to providing those resources through taxes will suffer a relative decline in the coming years. We have no direct control over the demands made on the resources. People will always fall ill, people will always break limbs and people will always want to have children. And, as I say, we are a humane and prosperous society and therefore we need to meet these demands, as well as those for education, transport, the environment and all the other areas of government responsibility. The question is: how?

Part of the answer, at least, must be to encourage those who can afford to do so to turn to the private sector, which is bearing an increasing share of the load. In 2003-04, private hospitals treated 2.64 million patients, an increase of 57 per cent since 1996-97. More than 55 per cent of all surgery is now performed privately. Thanks to measures such as the 30 per cent rebate and a focus on lifetime cover, 43 per cent of the population now has private health cover, compared to 34 per cent under Labor. I am pleased to say that we should be able to claim some cross-party support on this issue. Labor’s own health minister in 1993, Graham Richardson, warned that the health system would be in danger of collapse if private health insurance coverage were to drop below 40 per cent. This is what he said:

We’ve always had the view that the private system has to co-exist with a public system. If it doesn’t, the public system can’t cope.

We haven’t had private health insurance numbers this low in the last ten years and I think it’s time we did something about it.

Is a taxpayer subsidy in the form of a rebate worth it? I think the answer is a resounding yes for both the recipient and the taxpayer. The rebate is worth almost $1,000 a year for the average family with two children, and it has been estimated that every dollar spent on the rebate itself saves $2 in government spending, including state government spending on public hospitals. More broadly, the existence of a viable private health sector takes pressure off the public system. In 2003-04 private hospitals treated some 2.6 million patients, a 57 per cent increase since 1996-97. More than 55 per cent of surgery is now performed in private hospitals. Private hospitals are making a huge contribution to the health system in this country. All this activity in the private sector translates into shorter waiting lists in the public sector.

To restate the problem: the health service requires a large and growing portion of the government’s budget. Our ability to finance this from tax revenue is likely to diminish. We cannot control demand, and developing the private sector is a rational response to the problem.

Let me now turn to the measures proposed in this bill, particularly those which extend private cover into new areas. It has long been accepted that health care does not begin and end in hospital. It may be an overused adage that prevention is better than cure, but never has it been more applicable on both an individual and an institutional basis. As part of the solution to the problem of the rising demand on health services generally, it is clearly good policy that we encourage people to take better care of themselves and adopt more healthy lifestyles, including, particularly, giving up or not starting smoking.

It is this element of personal responsibility that part of these measures seeks to encourage under the heading of broader health cover. Being able to include wellness and prevention services, including suitable exercise programs, in health insurance packages will surely make the take-up of private health insurance more attractive for many and save public costs further downstream by, hopefully, avoiding hospitalisation.

I also welcome the extension of private cover into services that substitute for hospital care in the form of outpatient or day admission. Relieving hospitals of some of the demand for, say, post-discharge care or dialysis and at the same time relieving those patients of the need to re-enter the clinical environment and enabling them to receive treatment in the comfort of their own home will benefit all concerned. Broader health care will provide for more diverse offerings from private health insurance companies through the wider range of services that can now be covered by insurance.

We know that many members opposite abhor the spending of public money in private schools while conveniently ignoring the load that the private sector takes off our public schools. If all students who currently attend private schools were to enrol in state government schools then the taxpayer would need to contribute an additional $3 billion to $4 billion. In the case of New South Wales, the state government is already failing to meet demand from its schools, though by way of excuse it points the finger at the federal government for supporting the private sector.

Similarly, many members opposite will oppose the extension of private health insurance. I believe this is a blinkered and short-sighted view. It is blinkered because it stems from an archaic, socialist mindset that services such as health and education are the business of the state and that the private sector has no business being involved. What can possibly be wrong with the private sector offering a service that people want at a price they are prepared to pay? It is short-sighted because it ignores the rising demand for and rising costs of health services and therefore offers no solution. Somehow, I do not think members opposite will be pressing for tax increases anytime in the near future.

In my electorate some 30,000 people enjoy the benefits of private health insurance. It plays a vital role in providing improved health outcomes in our community. I believe the balance between private and public health services should be maintained. I commend the bill to the House for being part of that strategy.

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