David Hawker (Speaker) Share this | Link to this | Hansard source

Is the amendment seconded?

Gavan O'Connor (Corio, Australian Labor Party, Shadow Minister for Agriculture and Fisheries) Share this | Link to this | Hansard source

I second the amendment.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

There is nothing controversial about the content of the majority of the Health Legislation Amendment (Private Health Insurance) Bill 2006, but what stands a chasm apart is the position of both sides of this chamber on private health insurance. It has been extraordinary to listen to the complaints around the edges from those on the other side of the chamber on private health insurance—complaints about the cost of private health insurance without acknowledging the extraordinary increases in costs for all health care right across the board. It has been extraordinary listening to complaints about gaps when those opposite will not support a safety net. It has been extraordinary to sit here and listen to complaints about exclusions when these are elements of every insurance policy, even beyond the health sector. And it has been extraordinary to listen to the compassion from those opposite about consumers and the complaints that consumers were not consulted on the role of a Private Health Insurance Ombudsman when they would like to have the entire private health insurance sector eliminated completely. Yet those opposite came here yesterday and complained about rights for the consumers, the very consumers they would like to have eliminated altogether in order to have everyone accessing public hospital care and nothing else.

Finally thrown into the criticism of this bill by those opposite this morning was that Medibank Private potentially would be sold and result in an increase in rebates—for which they have no evidence. It is quite clear that the sale of Medibank Private could well increase competition, particularly if it is purchased by a new provider of private health care services in this country. But this feigned compassion for Medibank Private could well be due to many on the other side of the chamber actually enjoying having their own private health insurance, not wanting to see any of that sector lost and yet, at the same time, having the effrontery to come into this chamber and rail against it.

Mr Deputy Speaker, you do not have to go back very far for memories of Medicare Gold. I have no doubt that the member for Lalor has an extraordinarily strong conviction that her policies are good for a country; my problem is that they are not good for this country. Her policies may well be great for a country where one can walk along the Malacon and then sit listening to music in the Casa de la Trova. Medicare Gold may work in Havana; it will not work here. Medicare Gold proposed—I do not want to go into great detail—shifting people over the age of 70 into a combined promise of private health care, which would be fully paid for by the public health system, with the hope of wiping out private health insurance on the side. Costings were vague and amorphous. Even today the idea of Medicare Gold percolates up from the deep, because there is no agreement on the other side of the chamber whether to put it to death or not. We do not have a clear answer on that at all. Medicare Gold promised, for somewhere between $2 billion and $6 billion—we never got more precision than that—to allow anyone over the age of 70, without discussion of clinical need and with a triage system based purely on age, their own room and choice of doctor. This potentially would all be at the expense of our private health insurance system.

One does not have to go back very far to remember the days of 30 per cent—and falling fast—private health insurance coverage in this country; it was falling by two per cent a year. I would call that a death spiral, as it had been doing so for some time. One relies on a base to maintain a critical mass and efficiencies within private health insurance. How does one support a private health sector when levels of coverage fall, as we have seen in other OECD economies, to 10 or 15 per cent? That is when private health insurance becomes a service for the rich. But that is not what happens in Australia. Australia, through a policy trident of Lifetime Health Cover, community rating and a rebate that makes services affordable to Australians, has pulled across 44 per cent of the population. The average earning Australian can now be indifferent. Half choose to purchase private health insurance; others choose some other service, such as affordable independent schooling. These options are now available to Australians, when they could only dream of them 10 years ago.

We do not need a long memory to remember what it was like to have long queues in public hospitals in states across Australia. No matter how many people have taken up the option of private health cover, states’ commitments to their own hospitals have been ratcheting back and the queues remain. We have gained no commitment from states to shorten their waiting lists. I highlight Queensland as an example. They will not fire visiting medical officers; they just ratchet back their hours, providing fewer and fewer services. At the same time we see longer waiting lists and secret waiting lists—and not thousands, not tens of thousands but over 100,000 Queenslanders ‘waiting for Godot’ for the chance to actually get onto a list for an operation. Those on the other side of the chamber have the effrontery to talk about exclusions in policies, when we have in our state health systems the ultimate exclusion—you cannot even get in the door of a public hospital to get your operation. Waiting lists have ceased to be waiting lists; they are simply rotating lists, with people who are absolutely at death’s door being popped on the top of the list and everyone else just floating in a waiting list that never moves.

In the last 10 years, the notion that was once commonplace amongst socialist thinkers—that there was an inexhaustible appetite for health care services and one could never provide enough health services without completely breaking the bank—has been utterly exposed as a hoax. Average, ordinary earning Australians in the middle quintiles right down to 20 per cent of Australians in the poorest quintile walk out the door, pick up the phone and elect to have private health cover. It means so much to them that they are prepared to pay for it out of their own pocket. We have seen that these very Australians contribute back into Australia’s health system—not $5 billion and not $6 billion but $9 billion every year.

To those simplistic socialist thinkers, who even to this day talk about eliminating private health cover and redirecting the 30 per cent rebate back into our needy public hospitals, I put this simple piece of maths that has never been tested on the other side. If I were to redirect $2.6 billion or $2.8 billion currently spent on the 30 per cent rebate into those needy public hospitals and spread it thinly across the country, do you think those waiting lists would change materially? I tell you what: things would not move faster but, by moving 40 per cent of Australia back onto the public hospital queues, those queues will become longer—and I will tell you how much longer. They will become $8 billion to $10 billion per year longer. We are spending $20 billion a year on hospitals at the moment and I put to you that we would have to spend $30 billion. Congratulations to the other side, who would find $2.6 billion by eliminating a private health insurance rebate. Where would the other $6 billion come from? It could only come from tax. It could only come from wiping out tax cuts that were offered in the last budget. It could only come by restricting services, at which the other side of the chamber appears to be expert at state level. So where would the money come from?

I think we need to see two things from those on the other side of the chamber: first, that they relinquish their hostile ideological conviction to wiping out private health care; and, second, that they work out whether there could be a better system. At the moment all they have offered is Medicare Gold, the solution that is no solution—the solution they were so ashamed of that they had to release it just a few weeks before the election and hope it slipped through without proper scrutiny. We have had plenty of time to think about Medicare Gold now, and we know that there is far from agreement on the other side of the chamber on that policy.

It is also worth noting just how quiet the other side has been on private health insurance completely—in fact, on health more broadly. What do we hear from the other side of the chamber about health? Where are the questions about health care? Where are the questions about quality of care? They have all just dissipated with the shame in the hangover of Medicare Gold. Medicare Gold may work well in some countries; it certainly will not work well in Australia.

This bill does not have many controversial elements. This was a widely consulted change regarding the power of the ombudsman. It increases the ombudsman’s effectiveness to be able to conduct investigations at their own initiative or at a minister’s request, but they can now place scrutiny not just upon funds but upon all service providers, although obviously not upon clinical complaints. That is and will remain an issue for medical boards. It is about making the decision to take up private health care more satisfying, more fulfilling, and it eliminates some of the great questions and concerns that people who take out these insurance policies have.

I had a personal experience in this area two weeks ago. I was renegotiating my private health cover, for the first time on the telephone, and I was taken through the list of exclusions exhaustively. I tried to get through the phone call quickly, but the fund was methodical in explaining to me the exclusions. That is the same as when I take out car, boat or house insurance. This patronising notion that there are so many tricky exclusions out there that we cannot rely on ordinary Australians to take out an insurance policy is part of the problem on the other side.

I am not for one minute saying that there are not issues of communication. I am not for one moment saying that we should not be developing resources that allow a more complete explanation of products and services. And I am not for a moment saying that we should not be improving the powers of the ombudsman. That is what the bill is doing. I know those elements are not controversial on the other side. No, my attack today is on the notion that persists on the side—though it is rarely articulated because it is so poorly received in the community—that taking up private health insurance is a poor customer decision, the result of knowledge asymmetry, of being fundamentally foolish with your own money.

Let us look at this claim in a little more detail. Let us take the figures of equivalised household income by quintile and of how much Australians actually spend on their health care. Of course, the notion that will be put by the other side of the chamber is that money spent on private health insurance is simply a redirection of resources to the rich. This myth has not died. There are four big myths around private health cover that continue to be peddled by the other side of the chamber and by sycophantic, left-wing health economists and academics who continue to print this nonsense, which is completely ignored by Australians, who continue to take out policies because it is the right thing for them and their families.

The first myth is that there is an insatiable appetite for health care services and that the only way to prevent an overwhelming drive and demand for health care services is to ration them, to do what state hospitals do—pretend you have an open door but not have it open at all. The second myth is that of the worried well—that private health insurance simply treats people with tiny and insignificant conditions, that the wealthy can simply access a private hospital immediately and have world-class care for non-emergent, non-significant pathology. The third myth is the myth of two tiers—that private health insurance creates one level here and one level over there, with the rich operating in their own stratospheric level of health outcomes. The fourth myth is the misspent dollar, the myth to which I have already alluded—the myth that one dollar spent on a rebate for private health cover is a dollar that would be far better spent in a state public hospital.

I would like to devote a little attention to those four myths today, because they are being broken down, not by some concerted campaign of letter writing or by sympathetic academics who write articles about how wonderful private health insurance is. To the contrary: these myths are being undermined by Australians who are making their own decisions, who, when clearly offered choices, are demonstrating their ability to do so.

The first issue here about what private health has shown us—and 44 per cent of Australians now have cover—is that, far from there being a tsunami of health demand at private hospitals, Australians do not wake up in the morning and say: ‘I’ve got nothing better to do. I’d like to go and sit in a queue to get my eyes looked at or to have my elbow looked at.’ No, Australians go there for genuine cases. Seventy per cent of operations for cataracts and 60 per cent of operations for hips and knees—all of these serious operations that affect the quality of life of Australians—are being done in private hospitals with few in their queues. If anything, the private hospital sector is showing us how it should be done. It is showing that there is not some overwhelming, insatiable appetite that, allowed to be unleashed, would completely consume Australia’s GDP. What a preposterous public health socialist notion that still hangs around today. No, people who have private health cover are making responsible choices and getting the services they need, and I think those on the other side could actually learn a lesson from the efficiency that private health has delivered to the market.

The second myth, that of the worried well, is that there are not significant cardiovascular cases being done in private health, that they cherry-pick the high-return cases and do not do anything else. Nothing could be further from the truth. These private hospitals are doing a range of procedures—the expensive and the technical right down to the rather simple. I challenge anyone on the other side to come into a private hospital on any non-sitting day and point out the private hospital case that should not be done. Come and look at the waiting lists, come and look at the operating lists and come and tell me there is a  patient there who really should not be getting that operation, who really should be back on the public hospital waiting list, waiting forever—waiting until they fall off the perch, give up in disgust, go and take out private health insurance or perhaps fly overseas to have the operation. For goodness sake, what a ridiculous notion. I put that challenge to the other side: phone me, let us visit a private hospital and look at an operating list. I ask those on the other side to make the call on who should not be getting that procedure. Privately or publicly covered, they should be getting that procedure; they should not be denied it. Private health has simply shown us a way of doing it efficiently, and I support it completely.

The third myth is this myth of two tiers—that, by having private health insurance, suddenly the wealthy Australians float away with wonderful health outcomes and everyone else does not. Of course there is a challenge here that we need to be funding public hospitals, and the federal government has increased hospital spending by 25 per cent to 27 per cent—and, in the previous hospital agreement, by 36 per cent—over and above inflation, over and above the CPI. That is a reflection of increasing costs, which are seven to eight per cent a year. So when private health insurance rebates go up by eight per cent a year, don’t say, ‘What a profit grab.’ Have a look at the efficiency of the private hospital sector that operates on margins as thin as ice. What is happening is that this is merely reflecting the cost of health delivery. The finest health care is available in this country and, yes, the cost goes up by eight per cent every year. But 44 per cent of Australians bear it out of their own pocket because a rebate makes it affordable.

Public hospital care is also going up at exactly the same rate—by six, seven or eight per cent a year. So all health care costs go up at this rate. Let us stop having this private health exceptionalism line being run from the other side—that it is all profit-grab, that all of this 30 per cent rebate is simply captured by shareholders of private health insurance funds. We need to break through that notion and start looking at health outcomes. The private sector is showing us that it can be done far better than we are doing it in many of our public hospitals today.

Let us not forget that 50 per cent of those aged between 40 and 70 now have private health care cover. This is not some choice of the rich. This is not whether to get a Ferrari or a Porsche. Twenty per cent of the poorest Australians pay for these premiums and elect to have private health cover. So make no mistake that this is some choice for the wealthy, that this is some transfer to those who least deserve it, because in the end what has been developed with this policy trident in the late nineties is that ordinary Australian families can now contemplate having private health cover and taking responsibility for their own cover. Sure, they will use public services at times, but for the great majority of their clinical care, particularly at the hospital level, they are electing to cover themselves. They are electing to add $9 billion a year to the Australian health care pot which, were there not private health insurance rebates, would not be there at all. We would have a completely different private hospital system. We would have an elitist private hospital system with just a small percentage of Australians accessing private health cover. This side of the chamber would never want to see that occur.

The last myth is probably the most frustrating all. I have alluded to it already: the myth of the misspent dollar—the myth on the other side that, if it were not for the public opinion and public sentiment that is so pro-private health insurance, we could eliminate it quietly and capture back that $2.6 billion and funnel it across into our needy public hospitals, which simply have not had the state commitment to fund them as they should. Where would we be with private health cover falling from 43 per cent to perhaps 10 or 15 per cent? That would be 30 per cent—yes, 6 million Australians—joining the queues in public hospitals. Do you seriously think that $2.6 billion would cut it? Do you seriously think that $2.6 billion could actually cover that many Australians seeking operations and procedures, VMO visits and outpatient visits through our public hospitals? You have to be dreaming if you think that it could be done for $2.6 billion. It could be done for $9 billion and, as I have put to you before, that $6 billion would be found out of taxpayers’ pockets. We would be back to where we started 10 years ago: with falling PHI and increasing taxes. We would be back in that mess that we were in 10 years ago. I do not think Australians want to go back there at all.

What is clear now is that, in any economic sense, making something affordable increases the appetite for it. Government is not paying for the premium completely. We know that, by putting $1 billion into private health insurance rebates, private health cover goes up by approximately 10 per cent and into the health system goes $3.3 billion of client contribution. It is an extraordinarily sensitive lever. Once private health insurance becomes unaffordable then middle Australia starts to lose out. It is the policy interventions of this government that have made private health care affordable.

It is a fine model worldwide. There are very few countries in the world that can now boast 40 to 45 per cent private hospital cover and 40 to 45 per cent independent and non-state school educated children. What we have is two sectors with the balance—two sectors offering choices, two sectors competing against each other for quality. As I finish, I would like to point out we can be completely comfortable with students moving into the independent school sector and taking with them funding to their schools, but there is still an ideological resistance to a cent going into the private hospital sector. That is the great inconsistency of the other side, and for that reason I support this bill. (Time expired)

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I rise today in general support of the provisions of the Health Legislation Amendment (Private Health Insurance) Bill 2006, but in particular I support the amendments foreshadowed by the shadow minister for health. I welcome a number of the provisions contained in this bill but stop short of praising it entirely, just as this bill stops short of really providing the safeguards needed for consumers of private health insurance.

The provisions of this bill change the power of the Private Health Insurance Ombudsman and make some adjustments to the administration of the private health insurance rebate by Medicare and the Australian Taxation Office. The bill expands the powers of the ombudsman so that in addition to its role of dealing with disputes between customers and funds it can now deal with issues related to arrangements between insurers, the brokers and providers of services. On a voluntary basis the Private Health Insurance Ombudsman can also mediate in disputes.

Amendments are also made so that the Private Health Insurance Ombudsman will be able to direct the participation of those subject to a complaint in compulsory conciliation. At the request of the minister or of the ombudsman’s own volition, the ombudsman will be able to mediate between a health fund and a health care provider. No doubt all members would agree that this is an important power for the ombudsman. Importantly, the ombudsman will have powers to require records to be produced not only from the funds but also from the health care providers.

This bill also takes action to address the protection of those involved with the ombudsman from civil and personal liabilities that may arise from its increased powers. The bill also contains a provision that puts consumer protection front and centre when it comes to the focus of the powers and actions of the Private Health Insurance Ombudsman. This is an important provision that dovetails with the extension of the ombudsman’s powers.

In her speech yesterday the member for Lalor indicated that the last thing Labor wanted to see was the ombudsman concentrating its efforts on contractual disputes between funds and health care providers, and also that Labor would not want the ombudsman to act as a referee simply on pricing and servicing disputes between funds and providers. I would go a step further and say that I do not believe that private health insurance customers would want to see that the focus of attention of the ombudsman would be on anything but the private health insurance customer.

Health insurance disputes often involve complex issues. It is about time customers were represented in the private health insurance market. People dealing with health insurance and health care providers often feel intimidated by having to deal with these giants in the industry. They know that the insurers, should they want to, can effectively starve the customer by delaying their entitlements and dragging things out as long as possible. Additionally, most customers simply do not have the financial resources to pursue matters through the courts, should it come to that. I support increased consumer protection, particularly in complex markets such as the private health insurance market. I support the provisions in this bill that extend and enhance the power of the ombudsman when it comes to providing consumer protection.

I cannot participate in this debate on private health insurance without talking about what is on the minds of most people in my electorate when we raise this issue. Private health insurance is an important issue for the constituents of my electorate—which is why I draw it to the attention of the House—and I daresay it is the same for members opposite. Private health insurance offers a greater degree of health care protection to the many families who take it out and it is an important factor in the budgets of those families. When I mention private health insurance to constituents in my electorate I hear some strongly worded phrases, and usually one or two references to the fact that they feel they are being ripped off.

People in my electorate take out private health care insurance for the additional level of service it provides for them and their families should they fall ill or need hospitalisation. They understand and accept that insurance means that you can often pay premiums for a long period of time and not call on the insurance company to make any payments, as nothing has happened, and in such circumstances they consider themselves fortunate. What they do not understand, and what they are not willing to accept, is that they are paying, on average, premiums up to 40 per cent higher than they were in 2001. The member for Bowman recently took us through a lengthy dissertation justifying the price increases that have occurred. I invite him to front up to the people in his electorate and explain why premiums have increased since 2001 by an average of 40 per cent.

What people do not accept is that, despite the multi-billion dollar subsidy of the private health insurance industry that this government has locked the Australian taxpayer into, these premiums go up every time the industry applies to the minister for a price increase. There have been eight successive increases in health insurance premiums, every one of them having been ticked off by the minister. People accept that prices are generally going to rise over time. They see the cost of food and other consumer items rising. They know that other insurance premiums are also going to rise due to the costs being experienced by industry. What they cannot accept is that private health insurance premiums have increased by 40 per cent since 2001.

Constituents in my electorate were under the impression that there would be downward pressure on health insurance premiums. Why would they think that? It is simple—they believed the minister when he made the completely empty promise in 2001 that there would be downward pressure on premiums. It is unacceptable that, whenever the health insurance industry companies make an application to the minister for a price rise, he gets out his rubber stamp, turns to the last page in the relevant document and stamps the page—giving the price rise a big tick of approval. Worse still is that, when the minister makes the announcement that premiums have risen, he always refers to ‘average premium rises’. This is interesting. Constituents who contact my electorate office often report to me that the yearly premium rises they are experiencing are more in the order of 20 per cent, as opposed to the minister’s announcement, for example, of a seven per cent ‘average’ premium rise.

How can this be the case? I undertook some investigation to find out. People are insistent when they talk about anything that affects the family budget. They come in and try to explain to their local member just what is impacting on the budget. They have taken me through these numbers. We find that there is some trickery involved in the calculation of ‘average’ premium rises.

Health insurers manage to increase some premiums well above this figure of seven per cent by simply lowering the price of other products that they have on offer. When you look into this, you see that most of these products that fall in price generally correlate with those which are either defunct or, alternatively, closed to new members. That certainly does have a direct impact. That does not seem to matter to the minister though. He is happy to get out the rubber stamp and the big black pen, tick it off and stamp the page—and off we go again with another one of those successive premium rises, all of which have occurred on his watch. With premiums rising on the one hand, the government then wonders why, on the other hand, people who do not make claims on their insurance product start to consider leaving the system. I will let the minister in on a little secret, one that he ought to have regard for because I am sure that the people who visit my electorate office are no different from the people who visit the electorate offices of all members in this House: they believe they are being ripped off by this system. They deserve better. They deserve affordable and accessible private health insurance.

Not only do people deserve affordable and accessible private health insurance; they also deserve affordable and accessible access to medical services in general. The electorate of Werriwa suffers from a shortage of GPs, something that I have been campaigning on for some time. I have taken up many petitions and spoken at many venues within the community on this. Why this has come about and why it is a central point of concern for many young families in my area is that the current ratio of GPs to the population in Werriwa stands at one GP to 1,700 head of population. This is a huge difference from the federal Department of Health and Ageing’s recommendation of one GP to 1,000 people. Our ratio is significantly above that. Our area in the outer western metropolitan area of Sydney has a high density of families. The people in our area have a high need to call upon a GP’s services, yet we find ours is one of the worst affected areas in having one GP to 1,700 head of population.

In Sydney’s new growing suburbs, health care is extremely important. Not only is it extremely important to the people in those new suburbs; it is also at the front of the minds of all residents when they are looking at the provision of services within their region or suburb. It often gets back to the issue of the number of GPs that we have available to administer health care—and we in my region are particularly suffering as we try to attract GPs. Our residents, particularly young families and the older residents in many of the more established areas, are suffering because of this lack of GP support.

One of the central reasons why people in my electorate are suffering from the lack of GPs is the government’s cut in the number of GP training positions back in 1996. They are paying the price of the government’s obsession with cost over service because they do not have reasonable access to a GP. The residents of Kemps Creek, Hoxton Park, Horningsea Park, Carnes Hill, Edmondson Park, Prestons and Austral are in areas where we have a critical health care workforce shortage. It is front and centre in the minds of local families.

While I am on the record in this place as welcoming the investment that the government has made in the development of the new medical school on the Campbelltown campus of the University of Western Sydney, I say this will not solve the problems that the residents are experiencing now. I am sure that the school will produce doctors of a very high quality. I am confident that we will induce a number of these graduating medical practitioners, once they have seen and experienced the advantages that we have to offer them in Western Sydney, to stay and service the south-west of Sydney. But we will not see an improvement in our GP-population ratio for at least another seven to eight years if we are simply going to rely upon doctors coming out of the University of Western Sydney’s medical school to simply go out and, as is expected, resolve the issues as to our doctor shortage.

I would like to raise another health issue of concern that faces many residents in my electorate and, no doubt, other electorates. It is also the result of the government’s decision to prioritise cost over health care. As with its cuts to GP training places in 1996, on coming to office this government made a decision which abolished the Commonwealth dental health scheme. This government decided to cut $100 million out of public dentistry—there was $100 million cut from a program that the government is on record as saying worked. Despite the provisions of the Constitution, this government decided that the Commonwealth no longer had a responsibility for dental health care. It left the state governments to pick up the tab and it continues to deny that it has  any role or responsibility in providing dental services to our communities. The Constitution says differently, of course, and it is about time that the government accepted its responsibility and restored a public dental health program. It is about time that it acted to cut the lists of people waiting for dental treatment in the public health system. It is about time that the government stopped the situation that only those who have private health insurance can afford dental services.

People should not be forced to think about pulling their own teeth out simply because they cannot afford to see a dentist to have their teeth fixed. There are many elderly people who come and visit my office. People should not have to consider using superglue to fix their own dentures because the government wants to deny the responsibility that was given to it under the Australian Constitution. This government and the current minister need to stop the obsession with cost and dedicate the same time, the same energy and the same commitment to worrying about the health care of the people of this country. Care should be first and foremost in the minds of those deciding the future of health policy, because health policy should always be about people, not just about cost. This government needs to act and act now.(Time expired)

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

The Health Legislation Amendment (Private Health Insurance) Bill 2006 deals with a subject that strikes a chord with all Australians: health. As the nation’s population ages the importance of health services only grows. All Australians have a stake in the country’s health services. This government recognises the right of all Australians, young and old, to access quality health services, no matter where they live or whatever their financial situation. Furthermore, the government has taken steps to see that Australians have every opportunity to choose private health cover. In fact, this government has encouraged it with several measures, which I will outline in a moment.

Today I wish to highlight two reasons why the government is making private health insurance available to all Australians. Firstly, it is about choice. Australians should be able to decide for themselves whether they have private health insurance cover or whether they do not. Secondly, it is about working cooperatively with the public health system. The Howard government has eased the pressure on the public system without hurting the private system, encouraging more people to take out private health insurance, thus making for a stronger total health system—a strong public system as well as a strong private system.

It is the government’s view that the private health sector makes a vital contribution to the national level of health services. I wish the same could be said for Labor, but the figures show otherwise. When the Howard government took office a decade ago, the number of Australians with private health insurance cover was less than 34 per cent of the population. Today, that figure has jumped to over 43 per cent. That is in the order of nine million Australians making their own decision to access private health insurance. When Labor came to power in 1983, 65 per cent of Australians had private health cover. Over their 13 years of government that figure almost halved to less than 34 per cent. In a moment, I will return to Labor’s poor record on health and why it opposes improvements to the system.

In my electorate of Cowper, however, there is one private hospital and one private day care surgery—the Baringa Private Hospital and the Coffs Harbour Day Surgery Centre. Despite Cowper being a low-income electorate, those two facilities are very strongly patronised. It is indicative of the decisions being made by Australians around the country to use the services of the private health sector. We have a strong public health sector but, balancing that, and to take the pressure off that, we also have a strong private health sector.

One key indicator of the effectiveness of the private health insurance system is the usage of private hospitals in Australia: 56 per cent of surgery in Australia is performed by private hospitals. They admit a quarter of a million patients a year. The private system has 24,642 beds in 291 hospitals. Private hospitals account for 40 per cent of all hospital admitted patients with just 32 per cent of all hospital beds. Today, private health insurance membership, as I said, is over 43 per cent. That is a substantial proportion of the Australian population, taking a substantial load off the public sector.

The government has taken several recent measures to make private health insurance more attractive. Firstly, the private health insurance rebate was introduced in 1999. The 30 per cent rebate reduces the cost of private health insurance cover to the consumer. Since 1 April 2005 those with private health insurance who are aged between 65 and 69 have been able to claim a rebate of 35 per cent, and those who are aged 70 and over have been able to claim a rebate of 40 per cent. And what was Labor’s response to these increased rebates? Predictably, Labor’s response was to oppose this move. They labelled the move ‘a bad thing’ for our economy. They labelled it ‘unfair’. They labelled the increase in the private health insurance rebate to older Australians ‘shameful’. Had Labor remained in power, we would not be using the word ‘shameful’ to describe the private health insurance system and the private health system; I think we would probably be using the word ‘terminal’.

Labor ignores the figures when it claims that private health cover is out of the reach of average Australians. Over a million of these average Australians, on incomes of $20,000 a year or less, have private health insurance cover. And the private health insurance rebate is a major element in making that insurance cover affordable. The private health insurance rebate saves a typical family in the order of $800 a year—a benefit they would say they greatly appreciate, I am sure, were you to ask any family. Secondly, in July 2000 the government revolutionised private health insurance by introducing Lifetime Health Cover. It provides incentives for all Australians to take out private health insurance cover and stick with it over the long term. It helps to slow premium increases and it helps to stop the ‘hit and run’ syndrome where people join a private health insurance scheme only to leave after a particular ailment has been dealt with. I think Lifetime Health Cover is great news for the private health insurance system and great news for the wider health sector.

What would Labor have offered in its place? One proposal Labor put forward was the well-known Medicare Gold. I do not know whether the members opposite still remember Medicare Gold. I am sure they would prefer to forget Medicare Gold. It was going to bridge the divide between the private and the public hospital systems. It was going to put an end to hospital waiting lists, the then Leader of the Opposition, Mr Latham, espoused at the time. An opposition that was opposed to expanding the health insurance rebate for older Australians actually proposed this scheme of Medicare Gold, which would have provided free hospital care for all Australians over the age of 75. There seemed to be an incredible conflict there. On the one hand, they opposed the increase in the private health insurance rebate for older Australians but, on the other hand, they said they were going to have free health care for all Australians over 75 and no waiting lists. They said they were going to miraculously eliminate waiting lists. If you were over 75, you would just rock up at the door of the hospital and in you would go, straight through the door, and be treated immediately. It was clearly unsustainable; it was clearly underfunded; it was clearly a Labor pipedream. It was an absolute pipedream.

The system of Medicare Gold was quickly discredited. It was discredited by those on this side of the House, it was discredited by the overwhelming weight of health professionals and it was even discredited by those on the other side of politics. It was described by Michael Costello, the former Chief of Staff to the Leader of the Opposition, as a ‘strategic disaster’. It was described by former President of the Australian Labor Party and former minister in the Hawke government Barry Jones as a ‘turkey’. But it was apparently the biggest idea Labor had had on health in a decade, and it was quite clearly one of the worst. Incredibly, Labor will not put the final nail in the coffin of Medicare Gold. That uncosted, underfunded, unsustainable and undeliverable policy is still floating out there in Labor rhetoric land.

The 2004 election carrot was rejected by the people of Australia. They realised that the story that Labor was putting in relation to Medicare Gold was not going to be delivered. They could see that there was no proof of how access could be guaranteed to health services or how immediate service could be guaranteed for the over 75s, particularly where procedures required were complicated or difficult. It created the rather incredible situation where a person with a particular condition and of a particular age would be placed in a queue behind someone of an older age, just because that person had achieved the age of 75. We had a situation where Labor was espousing a policy that access to services was defined not by clinical need but by age.

The Minister for Health and Ageing, Mr Abbott, has called on Labor to renounce Medicare Gold for the farce that it is—to kill it stone dead—so that the people of Australia can get some clear direction on where Labor is coming from on health. We want to kill off that turkey. We want to chop off its head and make sure it does not appear again. Labor does not seem to speak much of Medicare Gold. I would like the opposition once and for all, in no uncertain terms, to state its position in this House that Medicare Gold is dead—that it is off the agenda. While we wait for Labor to construct a cohesive health strategy, the government will continue delivering affordable, workable health outcomes for every Australian—that is, not a pipedream but affordable and workable outcomes. The government introduced the no-gap and known-gap scheme, which provides health insurance members with a number of benefits. It provides cover for the difference between doctors’ fees and the combined health insurance and Medicare benefits payable for in-hospital medical services or up-front disclosure of any amount that would not be recovered from the policy.

The Health Legislation Amendment (Private Health Insurance) Bill 2006 proposes changes to two current health acts. It puts forward an amendment to the National Health Act 1953 to increase the powers of the Private Health Insurance Ombudsman. Its proposes a change to the Private Health Insurance Incentives Act 1998 to give Medicare Australia more time to provide the Australian Taxation Office with information regarding private health insurance rebates. The government considers this bill an important step because it will enable the Private Health Insurance Ombudsman to more effectively represent consumers in disputes. Schedule 1 of the bill before the House gives the Private Health Insurance Ombudsman greater powers to deal with complaints and to conduct investigations, whether they be of the ombudsman’s own initiative or by ministerial request. Schedule 2 responds to an Australian National Audit Office review on the administration of the rebate process and will lead to a simplified system of data exchange between the Australian Taxation Office and Medicare.

Australians with private health insurance use the services of the Private Health Insurance Ombudsman in times of dispute with their fund because of the ombudsman’s independence. The same is true of the private health insurance industry, private hospitals or medical practitioners when they have a complaint. Under the current system, the office of the Private Health Insurance Ombudsman is somewhat limited in the way they can deal with some disputes. It is important to ensure consumers are not exposed to risk during negotiations or disputes with health funds or health service providers, and the government feels that the involvement of the Private Health Insurance Ombudsman in these negotiations is in the best interests of all parties and creates a more transparent system.

The position of Private Health Insurance Ombudsman was first created in 1995. Over the ensuing decade the Private Health Insurance Ombudsman has been the referee in disputes between parties in the private health insurance industry. It is the government’s view that the powers of the Private Health Insurance Ombudsman do not allow for effective mediation of complaints and contract disputes between private health care providers and private health funds. The bill is designed to empower the ombudsman to settle these disputes quickly and effectively. It also broadens the scope the ombudsman has for securing the necessary documentation needed to settle disputes, specifically on fund and health care provider contracts. The bill before the House today is important because it will enhance the operation of our health care system.

Philosophically, Labor have an absolute opposition to private health insurance cover. I would like to see them reverse that stance. I would like to see them come up with policies that enhance and support the government’s position on private health insurance as an important part of our health system, as a major buttress to a quality health system comprising both the private and the public sector. It is hard enough to get any services out of our states. When you look at the way the states administer their health systems, there is some concern amongst the public. This government has a view of supporting the public system through a strong private sector. This government has the view that policies such as Medicare Gold—the undeliverable, underfunded pipedream—should be abandoned by Labor. We would be looking for a clear statement to that effect.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

Order! It being 10.30 am, in accordance with a resolution agreed to earlier today, I call the Minister for Health and Ageing.

Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

Mr Deputy Speaker, I suggest it might assist the House if we indulge the member for Blaxland for 30 seconds or so. He has some important points he wishes to make.

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

On the 10th anniversary of my election to this House, nothing much has changed except that the government believes in externalising its responsibilities, in moving from the public to the private, in simply auditing and benchmarking and in taking no significant responsibility for the operation of the government or its agencies. Although we support the extension of the powers to the Private Health Insurance Ombudsman, the fundamental problem here is that this externalises Commonwealth government business and control. I thank the House for this one gagged opportunity, and the minister’s consideration to do this on the 10th anniversary of my election.

Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

I appreciate that I do not often do good things, but I am pleased to have been able to accommodate the member for Blaxland, particularly as it is the 10th anniversary of his election to this House. I think he is doing a much better job than his predecessor did as the member for Blaxland.

I wish to thank everyone who has contributed to the Health Legislation Amendment (Private Health Insurance) Bill 2006. This bill should have the united support of the House because, while all of us have various issues with government policies and while all of us have various issues with aspects of the health system, the fact is that it is about enhancing protection for consumers, it is about trying to ensure that private health insurance policyholders get a better deal and it is about extending the powers of the Private Health Insurance Ombudsman to the whole sector. I think this is very good news for everyone, and I am pleased that speakers on all sides of the House have indicated that they support the bill, whatever other issues they might have.

The member for Lalor made some general criticisms of the state of private health insurance. In effect, she said that it was unattractive, expensive and complex. I would simply say to the honourable member that it is a lot more attractive, it is a lot less expensive and it will be a lot less complex thanks to the policies of this government. The percentage of the population with private health insurance has increased dramatically thanks to the government’s policies, particularly Lifetime Health Cover and the rebate, which Labor have never been comfortable with. While from time to time in muted tones they suggest that they do not really want to abolish it, we have many on-the-record statements by members opposite, including the Leader of the Opposition, that they regard the private health insurance rebate as very poor public policy. The fact is the rebate makes private health insurance much less expensive than would otherwise be the case. I point out for the benefit of members opposite that, while no-one likes premium increases and while premium increases have certainly been significant under this government, averaging about 5½ per cent a year, that is just half of the average premium increase that took place between 1983 and 1995.

The member for Lalor remains highly critical of the government’s decision to sell Medibank Private. For her benefit, let me point out that the best guarantee of good services is competition, not government ownership. Certainly, existing players in the sector believe that the privatisation of Medibank Private will increase competition, not decrease competition. I think that we will find that a privatised Medibank Private will be a much fiercer competitor for the other organisations in private health insurance.

In response to the second reading amendment of the member for Lalor, the general public is always sceptical about privatisation, but the task of government is not to slavishly follow opinion polls.

Julia Gillard (Lalor, Australian Labor Party, Shadow Minister for Health and Manager of Opposition Business in the House) Share this | Link to this | Hansard source

What about the Snowy Hydro?

Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

The task of government is to pursue good policy, and I would remind the member for Lalor that at all times the majority of Australians were against the privatisation of Qantas, which was done by the former government, and they were against the privatisation of the Commonwealth Bank, which was begun by the former government.

Julia Gillard (Lalor, Australian Labor Party, Shadow Minister for Health and Manager of Opposition Business in the House) Share this | Link to this | Hansard source

And the Snowy Hydro.

Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

Privatisation makes a great deal of sense, particularly in areas where there is fierce competition. There is a world of difference between Medibank Private, which is just one—admittedly the largest, but it is just one—private health insurer in a large and competitive market, and the Snowy Hydro, which was a virtual monopoly. It certainly is a public utility. Sure, we can always improve structural weaknesses in the health sector, but workforce shortages have already been very substantially addressed by this government. Again, no-one likes the rising costs of health, but this government, through measures such as the Medibank safety net, is doing a lot to handle that.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The original question was that this bill be now read a second time. To this, the honourable member for Lalor has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The immediate question is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.

Julia Gillard (Lalor, Australian Labor Party, Shadow Minister for Health and Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Deputy Speaker, I seek leave to incorporate the amendments I would have moved had we had a consideration in detail stage and had the guillotine not been applied to this bill.

Leave granted.

The amendments read as follows—

(1)    Schedule 1, item 11, page 6 (line 7), add

                 “and to refer matters to the Australian Competition and Consumer Commission or to other bodies for inquiry”.

(2)    Schedule 1, after item 70, page 16 (after line 16), insert

70A  Heading of Division 4

Omit the heading, substitute:

Division 4 — Health Insurance Commission may conduct investigations, refer matters to ACCC or other bodies

(3)    Schedule 1, after item 82, page 21 (after line 32) insert:

82A  After section 82ZTBB

Insert:

82ZTBC  Health Insurance Ombudsman may refer matters to Australian Competition and Consumer Commission

                 The Health Insurance Ombudsman may, on his or her own initiative, refer, by notice in writing, a specified matter or specified matters concerning charges by health care providers to the Australian Competition and Consumer Commission for inquiry and report.

(4)    Schedule 1, after item 82, page 21 (after line 32) insert:

82B  After section 82ZTBB

Insert

82ZTBD  Minister may refer matters to Australian Competition and Consumer Commission

                 The Minister may refer, by notice in writing, a specified mater or specified matters concerning charges by health care providers to the Australian Competition and Consumer Commission for inquiry and report.

(5)    Schedule 1, after item 82, page 21 (after line 32) insert:

82C  After section 82ZTBB

Insert:

82ZTBE  Health Insurance Ombudsman may refer matter to other body

                 If, in the Health Insurance Ombudsman’s opinion, it is more appropriate for a specified matter or specified matters concerning charges by health care providers to be referred to a body other than the Australian Competition and Consumer Commission, the Health Insurance Ombudsman may refer, by notice in writing, that specified matters or those specified matters to that other body for inquiry and report.

(6)    Schedule 1, after item 82, page 21 (after line 32) insert:

82D  After section 82ZTBB

Insert:

82ZTBF  Minister may refer matters to other body

                 If, in the Minister’s opinion, it is more appropriate for a specified matter or specified matters concerning changes by health care providers to be referred to a body other than the Australian Competition and Consumer Commission, the Minister may refer, by notice in writing, that specified matter or those specified matters to that other body for inquiry and report.

(7)    Schedule 1, after item 82, page 21 (after line 32) insert

82E  After section 82ZTBB

Insert:

82ZTBC  Inquiries by other bodies

                 If a specified matter is or specified matters are referred to another body under section 82ZTBE or 82ZTBF,

        (1)    the other body must, if it agrees to hold the inquiry, appoint, by instrument in writing, a person to preside at the inquiry;

        (2)    however, if the other body is a group of two or more individuals, the Minister must, by instrument in writing, appoint one of those individuals to preside at the inquiry;

        (3)    the Minister must, as soon as practicable after confirmation that the other body will hold the inquiry, cause a statement to be tabled in each House of the Parliament;

             (a)    specifying that the body will hold the inquiry, and

             (b)    giving the reasons the body, rather than the Australian Competition and Consumer Commission, has been requested to hold the inquiry.

(8)    After Schedule 2, page 27 (after line 10), add the following new schedule

“Schedule 3 — Amendment to the Trade Practices Act

Trade Practices Act 1974

1  After subsection 95C(1)

Insert:

     (1A)    This Part also applies in respect to an inquiry concerning a specified matter or specified matters referred to the Commission under section 82ZTBC or 82ZTBD of the Health Insurance Act 1953.

2  Section 95E

Add:

                 “and to protect consumers by holding inquiries referred to it under section 82ZTBC or 82ZTBD of the Health Insurance Act 1953.

3  After subsection 95G(3)

Insert:

     (3A)    The Commission may hold such inquiries as one referred to it under section 82ZTBC or 82ZTBD of the Health Insurance Act 1953.