Steve Hutchins (NSW, Australian Labor Party) Share this | Hansard source

The previous health minister is interjecting. The Broader Health Cover component of this bill will allow private health insurers to cover out-of-hospital services that substitute for or help to prevent hospital treatment. Labor has continually argued that we need prevention programs for public health issues such as obesity. The Broader Health Cover will in some sense go towards addressing health problems that ultimately become a heavy financial strain on the public system years down the track.

Of course, the commercial imperative for private health insurers to also take part in these preventative programs is to minimise their exposure to similar costs from their own members. This bill will allow insurers to cover hospital treatment, general treatment or a combination of both. The general treatment category includes disease and injury management and can include the provision of goods and services, but only those for which a Medicare benefit is not payable. This will have obvious benefits in broadening access to out-of-hospital treatments for chronic conditions that would otherwise be treated in hospital, and would ultimately have the effect of minimising such conditions and therefore the number of cases needing to be treated in hospitals.

As I indicated earlier, Labor takes no issue with the principles laid out in this bill in terms of Broader Health Cover. But where I and my colleagues on this side do share a great deal of concern is the establishment of a two-tier system. Broader Health Cover would provide an attractive series of benefits for members of private health insurers, but the question ought to be asked: what of those without private insurance? Under the current system, the distinction between private health insurance and the public health system can be a matter of choice of treating doctor or additional levels of comfort as well as support for some things like optical and dental. Essentially, these are all areas where the public health system does provide some cover—except perhaps for dental after this government abolished the national dental health scheme.

This bill proposes to broaden the range of those services to those that have not been traditionally provided universally. This essentially means that access to such services will narrow to either the people who can afford to pay for them outright or those who are covered by private health insurance—and, at current figures, that is far from the majority of Australians. Equity of access to health services should be a top priority of this government, but we all know it is not and, in seeking to improve the scope of private health insurance, the concerns surrounding that equity of access have not been addressed and indeed have been entirely dismissed.

Obviously treatment like dialysis and chemotherapy—two services flagged in this bill as examples of treatments falling within the Broader Health Cover—would still remain available to public patients. But other programs, such as disease prevention, which go to the heart of the thinking behind this legislation, could eventually become a service provided predominantly to only those with insurance. Where does this leave people without private insurance but who are equally, if not more, at risk of the same diseases?

While I am certain those opposite me in the chamber would argue this bill does not represent a shift in that direction, I think the weight of logic would indicate that it does. I challenge them to overcome their ideology and address these issues in committee. I know they do not believe that everyone should have access to health care, but, if they are serious about putting in place measures to reduce the future burden of health costs on the Commonwealth, they must confront the fact that people who cannot afford private health cover are those most likely to be unable to access programs that would prevent them going to hospital for treatment. As Australia ages, we must be looking at ways to reduce the incidences of preventable diseases before they become a serious health problem and subsequently a major cost to the public health system.

This brings me to the point of the affordability of premiums. As I stated earlier, premiums have risen by 40 per cent since 2000-01. It should be recognised that a component of this correlates to the rise in costs of health care, but, nevertheless, premiums rising at a rate of twice that of inflation is a significant cost to families. Under the coalition, health insurance premiums are one of a number of rising costs that families must deal with: childcare fees rising at four times annual inflation; interest rates rising eight times in a row; interest repayments doubling as a proportion of disposable income; HECS debts spiralling upwards; and petrol prices remaining historically high, part of which is motorists paying a tax on a tax to the Commonwealth. Add to all of that a 40 per cent increase in the cost of premiums over the last six years.

Those families have been given no guarantee from the government that premiums will not rise again under this new scheme. The minister has refused to acknowledge that possibility, instead putting faith in the streamlining of the regulatory environment that will come with this legislation placing downward pressure on the costs of private insurers and the follow-on effect that will have on premiums. But I think Australians will be excused for not taking the minister at his word, primarily because they did so in 2000 when the government introduced its Lifetime Health Cover initiative and the 30 per cent rebate, yet they have had to absorb a 40 per cent increase in their premiums since. Is the government serious about keeping premiums down? If it were, it would have given greater consideration to the issue in the drafting of this legislation, which contains no guarantees for consumers despite the rhetoric from the minister. If it were serious, it would not be intent on selling off Medibank Private. The government is not putting its shoulder to the wheel in terms of making sure families do not have to keep paying higher premiums. It would rather spend $50 million of taxpayers’ money funding advertising campaigns for the private health insurance sector instead of directing that money to better uses, such as improving the equity of access I spoke about earlier.

In the time remaining, I would also like to address some concerns that have been raised in submissions to the Senate inquiry into this bill regarding the issue of managed care. This was a much-maligned practice of the early 1990s—particularly in the United States but also, to a lesser extent, here—whereby private health insurers sought to limit costs by directly interfering in the clinical care of patients. More costly treatments usually performed in hospitals were being done on the cheap at home, and a substantial proportion of the cost was then borne by the patient or the patient’s family. While the overt intention of this bill is not for managed care, the AMA argued in its submission to the inquiry that the scope is there in this legislation. Private health insurers are given discretion in what is classed as general treatment and there is no stipulation of default benefits. The insurers can finance and provide the health care, which means they will necessarily want to minimise their costs—a decision directly affecting the level and quality of care.

Managed care has been widely criticised for compromising quality. In an examination of 58 surveys of American physicians from the late 1980s onwards, most had very strong and very negative sentiment towards the managed care system. A majority in most surveys felt that, while costs might be reduced in some circumstances, necessary tests were not being ordered. The nature of managed care is such that physicians contracted to the organisation are pressured to keep costs down and the first sacrifice can be quality of care. This is precisely the situation we want to avoid in Australia, and the warning has been sounded from the AMA and from Labor that the government needs to recognise that under this legislation there is the possibility for these schemes to emerge.

I would like to conclude my remarks by reminding the government that Australia has at its core the principle of equity. Labor support consumers having greater choice and value for money, but we do not want to see it at the expense of the less fortunate. If anything, this government has shown that its legacy after 11 years is one of division, but an incoming Rudd Labor government will restore the notion of equity to the decision-making process so that we do not become a country of haves and have-nots.