There Are Better Ways To Boost Health Care
Newcastle Herald
Tuesday May 13, 2008
WHILE health-care systems around the world vary, common to almost all are ageing populations, increasing life expectancy, a growing incidence of chronic disease and an increasing ratio of non-working citizens to those working (what economists call the dependency ratio).
Be it a public or private system, eventually you simply run out of enough taxpayers or younger, better-risk people to subsidise older and poorer-risk people and their spending. Nowhere is this pressure more obvious than in the Australian public health system. Almost every day we hear about the scarcity of GPs, horror quality-of-care stories within public hospitals and frustrating, often life-threatening, waiting times. It's not that the hospitals are typically bad most are, in fact, world-class. They just can't cope with the demand and the fiscal belt-tightening.Governments in other countries, and ours, are partly tackling the problem by expecting those who can afford to pay for their health care to take greater responsibility. This encourages private sector investment in expanded health care and frees up public resources for those in need.It's a very simple philosophy that even the most ardent socialist would accept, given the risk of richer people crowding out the poor. It's the same philosophy we've already accepted in regard to other living expenses for later life, through encouraging greater reliance on superannuation, rather than pensions.The Government's announcement of an increase to the threshold for the Medicare Levy Surcharge goes against all this contemporary logic and the Government's other policies designed to take pressure off the public system.There's a good argument that the threshold hadn't been indexed for 10 years, but does that matter? In any case, the Government has gone too far. Essentially, the policy now suggests it is unreasonable to push a young single person on $99,000 per annum to take more responsibility for their health care through private health insurance.About 90 per cent of the population now lives under this threshold.They may as well have disposed of the policy completely.NIB and the industry will overcome this short-sighted decision because, most fundamentally, people are turning to private health insurance because of rising incomes, the crisis of confidence in the public system and other very supportive government policies such as the 30 per cent rebate and lifetime cover. People are increasingly taking out private health insurance because, with the help of the Government, they can, and because they see a value proposition for them and their families. To be sure, the extra tax has been an effective stick, but our research indicates that what the vast majority of policy-holders value most is the peace of mind and convenience associated with having private health cover.If there is a silver lining in the Government's thinking it's that if it doesn't want to force people on modest incomes into the private system with a tax, then it should look at higher-income people free-riding the public system.It should now start to look at means testing one's ability to go to a GP or a public hospital at no cost.It is ridiculous that people who earn high salaries can access world-class care at no expense.It can only mean less public money to support those in need and that they face a longer queue.As a trade-off, the Government can then look to encourage higher-income people to provide for their lifetime health-care costs in the same way as they do with superannuation, with tax breaks. These are the types of sensible changes we need for a more sustainable system, not populist grabs for pre-budget headlines.Mark Fitzgibbon is chief executive officer of NIB health fund. It is ridiculous that people who earn high salaries can access world-class care at no expense.
© 2008 Newcastle Herald