Alan Eggleston (WA, Liberal Party) Share this | Hansard source

When I spoke on 15 September 2008 on the fairer health insurance legislation I mentioned that Australia was said to have the best worst health system in the world. I was quoting Jim Hoggett, from the IPA Review. Everybody in the world thinks their health system is the worst in the world because everybody has a story about someone’s grandmother who did not get treated quickly in a casualty department or a child who was not seen immediately by a doctor or something like that. In reality, when you look around the world, the Australian health system really is very good.

If we look at the two extremes, we see that the United Kingdom—which has a national health service, a socialist health service—has its problems. There are long waiting lists, overcrowded hospitals and the buildings are old. The services are often very good, but the people work under very difficult circumstances. A key problem with national health services is that governments never spend enough money on health. For some reason they are prepared to provide some facilities but are not really prepared to put in the kind of money that is necessary to make those services very good. In the United States they have a private health system, and if you do not have private health coverage in the United States, if you turn up to the hospital gasping for air with a pain in your chest and you do not have your Blue Cross card, then you will be told to go somewhere else. It is a very tough system.

In Australia, no matter who you are and no matter what your income level is, no matter what is wrong with you, whether you need a toenail removed or a heart transplant, you can get it done in either the private system or the public system, and no Australian is disadvantaged because of health matters. That is why Australia has the best worst health system in the world. What are the twin pillars of our health system? The first of the twin pillars is something called community rating, which is a system under which our private health insurance system works so that the people who draw on the private health insurance system, the elderly and the people who have illnesses that require hospitalisation towards the end of their lives, are cross-subsidised by younger people who join private health funds and do not necessarily need to call on the services very often, except for sports injuries and car accidents and having babies and looking after children. This system of community rating which we have in Australia is very good and works very well.

The other important feature of the Australian health system is the duality of the balance between the private and public health services. I quote what the Australian Medical Association put to the Senate inquiry that was done in 2008 on that matter. The AMA said:

Australia’s health system is a delicate balance between the public and private sectors. The effectiveness and efficiency of the public system relies on a strong private sector. A high rate of private health insurance membership is a key part of the private sector.

In Australia we have this duality whereby people who can afford it get treated quickly in private hospitals, which do most of the acute surgery in this country, while the public hospital system looks after people on lower incomes, and provides them with very good service, and with more chronic sorts of problems. You have to look into the reasons why this health insurance rebate was introduced. It was introduced because in the 1990s the level of membership of private health insurance funds had dropped dramatically and the balance between the private sector and the public sector was tipping so that more and more pressure was placed on the public sector. The public sector could not cope and there were long waiting lists to get into hospital and long waiting lists for surgery and people were left in the corridors of the public hospitals while nearby there would be a private hospital which was empty and full of good facilities but had no patients. For that reason the Howard government decided to introduce this rebate on private health insurance premiums to encourage people to get back into private health insurance. That, with the Medicare rebate and lifetime cover, had a very good effect and the level of private health insurance has risen, going up into the 40 per cent range, so that now we again have a balanced system which is working very well.

I personally find it very difficult to understand why the Rudd government is bringing this legislation back. It certainly cannot be on the grounds that reducing the number of people holding private health insurance is good public policy—because that will be the certain outcome of this legislation were it ever to be passed. That in turn would mean more pressure would be put on the public hospitals and again we would have a situation whereby people would have to wait a long time to get seen by a doctor, a long time to have surgery and a long time to be treated.

I think it is very important to remember that we did conduct a Senate inquiry into this matter a couple of years ago. It is interesting to look at some of the findings of the Senate inquiry. First of all, one of the principal findings was that there would be a very severe impact on low- and fixed-income earners. This was because of the overcrowding of public hospitals which would result from the drop in the numbers of people able to attend private hospitals as they dropped their private health insurance. There would be adverse impacts on regional health services, which both Senators Nash and Adams have referred to. There would be massive increases in costs for the public hospital system as the system sought to make up for the deficit of a lost private sector hospital system with their patients coming into the public sector.

Most importantly, there would be an end to community rating as a consequence of younger people dropping their private health insurance. As I said, community rating is a uniquely Australian system under which younger people are encouraged to take health insurance. They do not often claim against the insurance and they in turn subsidise the older people who do claim on health insurance as they have more illnesses towards the end of their lives. Incidentally, this system of community rating includes the fact that no-one is penalised for an adverse medical history. Say you were a diabetic and you had a past history of heart disease and a family history of cancer of the bowel. If you were to try to get health insurance in the United States, they would laugh at you and tell you that you were a bad risk and you were not entitled to health insurance. In Australia there is no penalty on premium for an adverse medical history. That is an integral part of community rating. Everybody pays the same premium regardless of their medical history and that is an element of our uniquely Australian system which does not apply anywhere else in the world. Health insurance providers in other parts of the world find that quite extraordinary, but nevertheless it is our system and it has worked very well in this country.

Given all these bad effects and these adverse outcomes that are likely to follow from the passage of this legislation were it to be passed, one wonders why the government is putting this measure up again. It was thrown out in 2008 for very good reasons because it was bad public policy. Clearly, the reason why the government is putting up this legislation again is a mixture of ideology and, I suppose one has to say, the poor financial management of the Rudd government. The ideological position of most people on the left of politics in Australia is that health services should be only provided by the public sector and that private medicine is bad and it is only for the rich. In fact, when you look at the demographics of the people who have private health insurance in Australia, you see that is far from the truth. It would seem that, because of this 1930s socialist ideology, the extremely successful and efficient Australian health system is to be sacrificed to satisfy those on the left of the Labor Party. I think that is a pretty weak reason for destroying an excellent system.

The other reason, we are told, is finance—that ending this system will provide money to the government and help balance the budget. But in fact the amount of money provided is going to be quite small. It is a net $300 million. That is not a lot of money when you start talking in government terms, so you have to ask whether giving the government an extra $300 million for the budget is really going to be worth all the problems that it will cause when in fact they will have to spend many thousands of billions of dollars, if this goes through, on upgrading the public hospital system. So, as far as I can see, there is no net gain to the government from this measure financially but there is a huge net loss because nobody seems to have thought about the fact that if the private health sector is not providing services the public health sector will have to be upgraded at enormous cost.

We are told that this legislation is going to be a double dissolution trigger. As other people have said, this is not a subject on which the government would get much joy if they were to go to an election and ask the Australian people to return them to government. It is very easy to remind people that their child, their grandmother or their wife would go on a three-month waiting list for something that they could have treated in a private hospital the next day. I do not think that would win any votes for the Labor government.

All Australians have the certainty of knowing that they will always have access to good health care while the current system is maintained. I do not believe the Rudd government should be permitted to destroy our unique health system and the fine service it provides to the Australian people. For that reason, I will be voting against this legislation, as will the coalition. I hope that will be the last we hear of the very bad public policy proposal that this legislation embodies.