COVID-19 Non-Treatment, American Style Points to the Need to Fix Medicare

10 May 2020

As Australian political parties slowly and steadily dismantle Medicare to move us towards a privatised system American-style, it is worth noting the major feature of the American system. Everyone says it is a hopeless system. It depends what you want it to do. It is the world’s best system at turning sickness into money. That is what it evolved for, and that is what it does. It is based on a simple Darwinian principle; people want to live and will do anything they can not to die, including paying everything they have.
Medicare in Australia is being destroyed by a simple mechanism; the Medicare Rebate (i.e. payment doctors get for seeing you) has gone up at half the inflation rate for 35 years. Initially Bill Hayden set the rebate at 85% of the AMA fee, and when you took away admin costs and bad debts, doctors were almost as well off having Medicare as having the AMA fee. But the governments of both political parties have shown incredibly bad faith to the doctors. They have not raised the Medicare rebate, so it is now 46% of the AMA fee, almost half what it was in real terms. They have allowed doctors to charge a ‘co-payment’, which means to ‘top-up’ to the AMA level (or higher for some situations like CTP green slips or Workers’ Compensation where the red tape and likelihood of reports and litigation increases the workload, or when doctors sensing that have a ‘good name’ and can charge more in a ‘market’ simply charge extra).

To Fix Medicare needs either the rebate to go back to 85% of the AMA fee, or to have an alternative salary structure that doctors will work in. This is likely to be easy for General Practice as GPs are almost broke and the older ones sold their practices to corporations who take up to 50% of what young GPs earn as ‘overheads’. Many General Practices are also subsidised by a very inefficient mechanism. They rent a room to a pathology company at exorbitant rent in exchange for doing lots of pathology tests. So the government in its stupidity pays for unnecessary pathology rather than GP rebates, but hey, the object has been to subtly lessen bulk billing as a percentage of doctors’ incomes.
Amazingly enough, the COVID-19 crisis has flushed out this problem as GPs can keep in touch with their patients by phone, but the patients do not come in for the dubiously necessary pathology tests, and the pathology companies are trying to get GPs to drop their rent, which is the hidden subsidy that keeps the practices going.

Specialists, having had a generation of charging whatever they like will probably not be willing to take 85%of the AMA fee, and the government was so duplicitous last time that the profession will not trust them again.
The AMA, which is effectively the voice of specialists, having made little public effort to maintain Medicare will not do anything to allow the government to let Medicare replace the existing fee structure and system for specialist, though it will cheer from the sidelines if the GP rebate goes up.

The Labor Party is deserving of special mention here. It claims to want to ‘Save Medicare’ and was given 3 seats in Tasmania thanks to a GetUp and Doctors Reform Society 2015 election campaign on Medicare, but still has not committed to do anything to actually Fix Medicare. The lack of rise in the Medicare rebate was as bad under Labor as under the Liberals, so Medicare is really the litmus test for Labor. Are they committed to free universal health care or are they happy to mealy-mouth, save immediate government spending, subsidise the inequality and inefficiency of private health insurance and let Medicare die? To date they have done the latter, and they have not even promised to Fix Medicare.

The end-point of destruction of Medicare and public medicine is what happens in the US, where the first thing examined is your wallet, and where you can pay a fortune for effectively nothing as illustrated below. The ramifications of this are yet to play out. The US health system has been overwhelmed in New York, but this will also happen in the Republican States that are currently demonstrating with guns and demanding and end to the lock-down, (because of course they have a very poor welfare system). When a large number of people start to die of COVID-19 in these Republican strongholds, the political fallout will be considerable. Either today or tomorrow the US will pass the whole of Western Europe, 26 countries, in terms of the number of COVID-19 cases, but the peak in cases and hospital load is yet to come. The private medical model is inadequate; all that will change is how obvious and urgent the problem is. Hopefully the angst generated in the US will allow us to Fix Medicare here, where our problem currently is not being noticed because what is left of the State-funded hospital system has been able to ramp up to take the extra load with a couple of extra GP phone-billing items. The private system has been saved by shutting down, and being paid generously to be an unused overflow resource.

I repeat what Fixing Medicare needs.

Either the Medicare rebate needs to go back to 85% of the AMA fee for all doctor visits or a salaried structure with adequate staffing needs to be created so that people can get the treatment they need. This will be a huge undertaking in both General Practice and public hospitals and will be hugely opposed by specialists. If it is not adequately funded the huge difference in waiting times between the private and public sector will remain as it is.

www.news.com.au/world/north-america/coronavirus-us-hospital-turns-away-sick-aussie-charges-him-us9000/news-story/3a6b7da67e97b6298990f60e6542966a