Brendan Nelson (Bradfield, Liberal Party) Share this | Hansard source

I wish to take the opportunity in the debate on this Private Health Insurance Legislation Amendment Bill 2009 to speak to two issues: the first is private health insurance, and hospital care in particular; the second is to discuss issues in relation to deafness in newborns and infants in particular. The editor of the Medical Journal of Australia, Martin Van Der Weyden, introduced his early-December 2008 editorial with the following anecdote to illustrate the circumstances that we face in Australia in relation to health care, and hospital care in particular. The anecdote in many ways reflects the paradox for many Australians, which is the delivery of health care in this country. It went like this: two patients present to two clinics in Australia on the same day. Both have a limp. The first is seen the day that he seeks to have an appointment. He is X-rayed that same day and is booked in for a hip replacement the following week. The second patient waits three weeks to get an appointment to see his GP. He consults the GP and waits a week for the X-ray of the hip to be reported. He waits eight weeks to see an orthopaedic surgeon and then waits another month to have a hip replacement. The editor asked: what is the difference between the two patients? The answer is that the first is a golden retriever; the second is his aged owner. While there is some flippant humour in the paradox that is presented, that is the paradox of modern health care in this country.

We live in a country where almost every day, in any newspaper, television bulletin or radio report about health care, in the space of the one bulletin we will be presented with the latest technological advance in medicine. Only last week, for example, we had one television news report which reported the successful insertion of a cardiovascular pacemaker into a premature baby. The same news bulletin reported a woman suffering because of the lack of something as basic as a cardiac monitor. And so, too, every day we see examples on the one hand of extraordinary advances in medicine, but on the other a New South Wales hospital not being able to provide meat for its patients because the butchers’ bills have not been paid for six months.

One of the things that is constantly put in the debate about hospitals is lack of money. It is understandable that many Australians would think that to be the case. The truth of it is that in real terms on a per capita basis since 1960 health care funding in Australia by government has increased by 1,150 per cent—11½ times in real terms per capita. That is after adjusting for inflation. In fact, since 1995 it has increased 50 per cent in real terms. Public hospital expenditure similarly has also increased in real terms over that period of time. In fact, as a proportion of GDP, public hospital expenditure in 1960 was 1.3 per cent of Australia’s gross domestic product; it has increased now to 2½ per cent of Australia’s GDP. By any standard, Australia’s investment, both public and private, and in fact from all sources in health care and hospital care in particular, has increased.

Yet, at the same time, over the last 20 years there has been a 67 per cent reduction in the capacity of Australia’s public hospitals according to the audit conducted and released by the Australian Medical Association late in 2008. In fact, the AMA estimates the deficit of public hospital beds to be in the order of 3,750. Whatever figure one chooses to accept, by any standard for everyday Australians there is undoubtedly a shortage of public hospital beds. Public hospitals at the moment are running in excess of 85 per cent occupancy, which is cited as the ceiling of safety by the Australian College for Emergency Medicine. Even more disturbing is that our major teaching hospitals—for example, the Flinders Medical Centre in Adelaide, the Austin in Melbourne, Westmead and the Royal North Shore in Sydney—are running at an occupancy rate in excess of 95 per cent.

One of the initiatives undertaken by the current government purportedly to deal with this is to establish GP superclinics. The purported or stated intention is to reduce the load on our emergency departments and so on. It is worth noting for the purpose of considering this debate that the Australian College for Emergency Medicine estimates that only one in 10 presentations to emergency departments and public hospitals are cases that could be handled by a general practitioner and that only one per cent of emergency department resources are actually consumed by such presentations. In other words: whatever the motives for building GP superclinics and whatever the benefits of them may be, it should not include substantially reducing the demand on overstretched public hospitals.

There are three reasons why health care costs in Australia are increasing in spite of major increases through successive governments—Labor governments and coalition governments—in funding and the fact that there is still clearly unmet demand and certainly serious mismanagement of public hospitals. The first is the ageing of the population. The Productivity Commission, in its 2005 report on the impacts of technology on health costs, estimated that the per capita annual increase attributed to ageing is in the order of 15 per cent. And we know from the Intergenerational reportfirst initiated by the then Treasurer, Peter Costello, in 2002 with a second report in 2007—which forecasts economic and demographic impacts 40 years out, that the proportion of the population of a working age that supports those who are not will decline over the next 40 years from five people to 2.4 people.

The second impact of those costs is the increasing affluence of the Australian population, to which the Productivity Commission attributes 37 per cent per capita costs annually. But the largest contributor to increased costs is technology, at 47 per cent. In my view, our country faces some quite significant challenges in health care. The first is that there is going to have to be a significant recalibration of the expectations of Australians about what the health care system is going to deliver. As I said in my earlier remarks, we are presented each day with evidence of the latest technology which is available or which may become available or that Australians expect to become available to them. At the same time there is hot bedding of patients, ramping of ambulances, people being put into storerooms and cupboards in waiting rooms because there is nowhere else to put them, the emotional agony and indignity of a woman having a miscarriage at 14 weeks gestation in the toilet of the waiting room of a public hospital and an elderly women being put into a storeroom because there was nowhere else to put her while she was waiting for a bed to be found somewhere in the hospital.

Then there are elective waiting lists, which, as the Australian Institute of Health and Welfare reminded us in their most recent report, have further increased again in terms of average days that Australians are waiting. Something is going to have to give. I noticed recently that the New South Wales Director-General of Health foreshadowed—on behalf, presumably, of the New South Wales state Labor government—that Australians could no longer expect to see universally free health care being provided. She expected that it would not last more than another five years.

The second thing that is required in my view is serious reform to the entire dysfunctional nature of the relationship between the Commonwealth and the states. That is obviously needed. The biggest constitutional issue and question which faces this country is not whether we are a republic or not, as important as that question may be to many Australians; it is instead how we best manage the relationship of a federation in a country which is vastly different to that of Henry Parkes. You need to look no further than the administration and funding of Australia’s health care, and hospitals in particular, to appreciate why we need reform.

I am very strongly of the view that handing over responsibility for Australia’s public hospitals to the Commonwealth would create far more problems than it would ever solve. Anyone who thinks that we will get public hospital services from having Canberra control their administration is frankly delusional. However, I strongly believe that, as long as we continue to have states, the Commonwealth should be the sole funder of almost all of Australia’s health care system, leaving aside the contribution made by people at a private level. The Commonwealth should be the single funder which sets and mandates, in consultation with health care professionals, the standards that we expect. The states should then be responsible for delivery. I would encourage the government very much to move in that direction.

It is 25 years since I worked in a major public hospital, a teaching hospital. But it has been extraordinary to see the changes that have happened and the demoralisation of Australia’s professional medical workforce in its teaching hospitals. Imagine working in an institution where the people who purportedly run the institution have no responsibility for the decisions that are made within it and cannot be advocates for the institution without the risk of losing their jobs. My very strong view is that the management of the hospitals—of which there are around 750—needs to return to a local management model and perhaps even in many cases management via boards.

There was a time when a board ran a hospital. The board then asked of its medical and nursing staff what was required to deliver services to the community for which it had responsibility. It would test that information and then it would be the advocate for the institution in seeing that the necessary resources were available to deliver those clinical outcomes. While you would not in the 21st century necessarily return entirely to that particular model, we are now in an environment where we have a clipboard carrying bureaucrat who turns up at a hospital and tells the hospital what will be delivered within a particular budget and then if anyone does not like that they can go and look for alternative employment—which, sadly, is what most of Australia’s professional health care workers, particularly specialists, have done. It is completely demoralising to work within a system which you no longer believe in.

As far as Australia’s future funding of health care is concerned, in my view it is about the money, the management model and the model for funding that ultimately delivers the services to the system. That is what this debate about private health insurance is really about. We are now in a situation where about 46 per cent of the population has private health insurance. That is up from 34 per cent in 1995 because the previous government introduced this 30 per cent rebate, which was not means tested. It introduced Lifetime Health Cover to provide a penalty for those who did not join private health insurance at a young age. It also provided very strong political support to private health insurance.

In 1995, we had a Prime Minister, Mr Keating, who, rather memorably, from the Royal Adelaide Hospital said: ‘Australians don’t need private health insurance. They can rely on Medicare.’ If I had been worth $5 million at the time, I might have been tempted to say that sort of thing. But all members here need to be reminded that there are one million Australians living on less than $26,000 a year who have private health insurance. That is less than the electorate allowance that we get, and these people are living on that and they have private health insurance. A wonderful woman, Ethel Guy—she was President of the Tasmanian Pensioners Union—once said to me in the early 1990s: ‘Brendan, a lot of my members go without food to pay for it.’ That is the situation that we are in.

There is a view deeply rooted in the Labor Party that is hostile to the basic concept of private health care. There is now a view that the private health rebate can be means tested and that that will not make any difference. It is not said publicly, but they think that the so-called rich people should pay more for their private health insurance. The people who will suffer from that the most are actually the most vulnerable people, the low-income people, who have private health insurance. There are 202,000 people over the age of 65 living on less than $20,000 a year who have private health insurance; there are another 160,000 earning between $20,000 and $30,000 a year over the age of 65 who have private health insurance. These are people who think that they are going to need it. They are not just financially unfit; they are also people who think that they are going to need their private health insurance. The fewer people you have in it who are financially fit and also physically fit, the higher the risk that you have in the pool. That turbo charges premiums.

So we will go through the charade again of the minister at some point having to agonise over claims for private health insurance premium increases from the private health insurance sector to fund and support services in the private hospital system. When that time inevitably comes it should be remembered that in its first two successive budgets the government has done two things which are hostile to the interests of keeping deflationary pressure on private health insurance premiums. I also remind the House that in the decade to 2006 there were 1.2 million separations from private hospitals—a 47 per cent increase in separations. I just ask the House to think what would have happened if all of those had had to go through the public hospital system.

In concluding, there is just one other issue that I would like to raise and that is the issue of newborn deafness. A great friend and mentor of mine, Dr Bruce Shepherd, has given me a lot of advice throughout my life—most of which, fortunately, I have not taken. In 1962 he took his newborn first child, Penny, to get the best medical advice he could get in Great Ormond Street Hospital in London because he suspected she was deaf, and he was told, ‘I don’t know whether your daughter is deaf but she is definitely mentally retarded.’ That is the way that many parents encountered deafness in their children in the 1960s. We are living in a country today—because Bruce Shepherd did not listen to a lot of people who told him he could not do it—where, if we could screen every child at birth for and detect deafness and get them into an effective program with a cochlear implant where it is medically indicated before 12 months of age and get them into an auditory-visual therapy program, as it is called—run by the Cora Barclay Centre in Adelaide, the Shepherd centres in New South Wales and Canberra, Hear and Say in Queensland and Murdoch in Western Australia—which is relatively inexpensive, by the age of five you would not know they were deaf. They could be fully integrated not only into school but into society. In Western Australia we still do not have 100 per cent coverage for screening—it is 46 per cent. Despite stated intentions of state-wide screening by next year, in Victoria we are still running at only 55 per cent. The Northern Territory is a basket case. The Royal Darwin Hospital screens just over half of its newborns; and as a consequence of the intervention we are now screening many—but certainly not all—Aboriginal children.

We could live in a country where we could proudly boast that every child will be screened at birth for deafness. There are about 500 children born in Australia each year who are profoundly deaf and most of them will require a cochlear implant. It is a relatively small sum of money. An implant could be demand funded and provided to those children. We could then get them into an auditory-visual program and by the age of five we would not know they had even been deaf. The evidence emerging from the National Acoustic Laboratories is that by the age of 3½ these children have receptive and expressive language that is only six months behind normal children. It is not an issue of partisan politics. It is something that we can actually achieve with a relatively small amount of money and political will. I commend the House and the government to do whatever they can to see that the states get up to speed with this. I am ashamed that in the state of Western Australia there are only six publicly funded cochlear implants for children who are born profoundly deaf in that state. I urge and encourage Colin Barnett and the Western Australian government to damn well do something about it.

See this speech in context