Health, Wealth And Public Hospitals
Sydney Morning Herald
Wednesday December 31, 2008
THE economist Milton Friedman once argued that licensing of medical practitioners was unnecessary. The patients of good doctors would live, while those of bad ones would die. The market would weed out incompetent physicians. The Howard government never ventured that far down the ideological track on health, but it did use the tax system to force many Australians into private health insurance. The revelation that private hospitals now undertake most of the surgery performed in Australia is a testament to the Coalition's determination to alter the balance between public and private health care. It also draws attention to a ticking time bomb that threatens the future financing of public hospitals.
The rise in operations being performed in private hospitals, including a jump in high-end surgery costing $100,000-plus per case, means bigger claims payouts by private health funds. Australia's largest health fund, Medibank Private, has already paid at least one claim above $350,000. That means higher premiums, which translate into increased costs to the taxpayer via the Federal Government's private health insurance rebate. Superficially one might argue that the tax dollar is simply following the taxpayer into the private sector. But as the Australian Healthcare and Hospitals Association points out, the trend threatens to bleed resources away from public hospitals battling chronic understaffing and resource constraints. The Australian Medical Association claims effective public hospital bed numbers for elderly patients have fallen by two-thirds in the past 20 years. Before the public health system gets sicker, remedial action is needed to prevent the private tail wagging the dog. Allowing affluent Australians to fund their own hospital care may reduce pressure on public hospitals, but the private system's share of the health budget should not outstrip the proportion of people it serves. Earlier this year, the Prime Minister, Kevin Rudd, promised to maintain the private health insurance rebate at current levels. Nobody wants to see government playing God over who receives what health care. But as economic times worsen and government revenues decline, hard decisions about spending will be necessary. The Federal Government should come clean with the public about whether the $3.6 billion private health insurance rebate and big increases in private health fund premiums are sustainable. Australians have a right to choice, but the health of our hospitals is an issue that transcends hoary ideological arguments and political vote-buying. We may not satisfy free market economists such as the late Milton Friedman, but we may get a health system that we can afford.
© 2008 Sydney Morning Herald
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