Don't Get Sick
Sun Herald
Sunday March 2, 1997
With the AMA telling people they could be better off without private health insurance it's time to weigh up the risks. JOHN SYNNOTT and TERRY SMYTH report.
BRUCE and Carol Bailey are part of the growing army of Australian families caught in the crossfire of an increasingly bitter war over the nation's health care system.
The Newcastle couple dropped private insurance a few months ago, joining hundreds who believe it just doesn't add up anymore.
They acted before last week's bombshell from the Australian Medical Association's economics committee, which advised privately insured patients to quit their health funds.
But their case neatly illustrates a stark truth about health care in the 90s: unless the private sector can tempt the Baileys back, the industry will stay on the critical list and the public sector will remain in intensive care.
There can be only one safe course if that happens: don't get sick.
Insurance loyalists, The Baileys paid up to $130 a month to cover themselves and their children Sarah, 13, James, 11, and Thomas, 7, for 16 years.
"When we did our sums, we found we had paid in almost $10,000, enough for a family trip to Disneyland, and had claimed back about $1,100," Mrs Bailey said. "So we pulled out and put the same amount into a separate bank account. Now, the money is there if we need it, and it's growing."
The family has dipped into the account for dental, physiotherapy and pharmaceutical needs, but still has more in the kitty than ever before.
"It was a very traumatic move because you tend to think that as soon as you drop out someone will get sick," Mrs Bailey said. Then one of their children was hospitalised.
"We were told that if he was admitted as a health fund member we'd be out of pocket, whereas if he was admitted as a public patient we would pay nothing. Now, if any of the kids, say, need their tonsils removed and there is a 12-month waiting list, we have enough money banked to get it done straight away."
The Australian Medical Association delivered a lethal injection to the Government's $600 million bid to prop up the ailing private health insurance industry on Friday.
Prime Minister John Howard had planned to force middle income families to take out policies or face an extra $1,200 on their tax bills this year.
The nation needs public and private health care. One without the other would either send Medicare and policy charges through the roof, or bring about a collapse. But when the AMA announced its economics committee had evidence patients would be better off cancelling insurance and paying for private treatment when they were ill, it sent every taxpayer back to the calculator.
Private health is already hemorrhaging policy holders at the rate of more than 800 a day. Such statements could accelerate that rate.
A State Health Department briefing paper has predicted that the tax incentives will at best result in a slight increase in health insurance payers.
At worst, numbers of private health insured in NSW will decline to the Queensland level of 28 per cent of the population, costing the public an extra $180 million annually. NSW private insurance coverage fell from 42.3 per cent to 34pc in the last three years. Every percentage drop costs $30 million - equal to $246 million a year.
The battle between public and private health sectors is just one front in the war over funding for public hospitals, according to Stephen Leeder, professor of public health and community medicine at Westmead Hospital and Sydney University.
State-funded public hospitals were the big issue and have received only between 0 and 2pc extra over the past decade, he estimates.
"They are in real trouble - the waiting lists are a symptom. There's a lack of morale, questions about quality of care and patient satisfaction."
The fight over money is causing idiocies in the system, according to former Liberal NSW Health Minister Ron Phillips. It encourages, for instance, GPs to increase the volume of patients coming to their surgery instead of keeping them healthy and out.
It makes privately insured patients pay three times: the Medicare levy, private insurance and the gap in refunds. It creates cost-shifting and patient-dumping games between the State (hospitals) and Commonwealth (GPs).
With a renegotiation of the five-year Medicare agreement looming, the State and Federal governments are taking up opposing positions.
NSW Health Minister Andrew Refshauge criticises the Federal Government for "throwing good money after bad in propping up the private health insurance industry".
For his State, the problems are particularly acute. There are rising costs from:
* Increased demand from an ageing population;
* Increased admissions due to new technology and changing disease patterns - heart patient admissions have doubled in 15 years;
* Need for seven more linear accelerators by 2000 to treat cancer, at a capital cost of $21 million and an annual recurrent cost of $8 million;
* Increasing renal failure, from 1077 patients in 1987 to 1583 in 1994, at a cost of $35,000 each a year.;
* Increase in Hepatitis C - about 10,000 new infections annually among drug users alone costs $14 million;
* Expected rise in dementia sufferers by 30pc.
Says Dr Refshauge: "The reality is that public hospitals need public funds - that is where taxpayers' money should be spent."
The States are furious at Commonwealth cuts - to the dental health scheme, and a $34 million cost-shifting "penalty" for NSW, which has poured an extra $600 million into health in the past two years. "There is a limit," said Dr Refshauge.
Meanwhile, the Baileys will continue to shun private care and order brochures on Disneyland.
© 1997 Sun Herald
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