Australian health service plan heading for July crunch By Ron Lord* This year, Australia's still-youthful Labour government will implement the first part of that ideal of socialists and bane of free enterprisers, a "free" gov¬ ernment health service. Medibank is its name, and the government's public relations machine is spending $1.5 million to promote it. (All amounts are given in Australian currency; A$l = C$1.36.) But, with just 3 months before the curtain goes up, the stage is a shambles. The cast is working frantically behind the curtain trying to get the set in some kind of order. From July 1 the government pro¬ poses that every person in Australia Australian citizen or not be em¬ braced within a universal health in¬ surance scheme, free of charge. This would entitle him to free stand¬ ard hospital accommodation and free medical treatment while in hospital

ceive three cards


for each par¬

ent and one for the children.

be¬ An immense computer system lieved to have the greatest input capa¬ city of any in Australia will print the details on the cards. Posting is due to start this month. Names and addresses for the initial cards have been compiled from electoral rolls and child endowment files. Many people will miss the initial mailing because they will not be identi¬ fied from these sources. The mailing will therefore be followed by newspaper advertisements with coupons for those who miss out. It has been estimated that some 15 million cards are needed to cover every¬ one living in Australia. But right now, not even the minister for social security, Bill Hayden, could predict just what he will be unveiling

Commonwealth has promised to main¬ tain the hospital system. The minister for social security has already stated it would be impossible for the hospital scheme to be intro¬ duced July 1 in three of these states New South Wales, Victoria and West¬ ern Australia. These governments can expect to come under tremendous pub¬ lic pressure to join medibank once the free scheme starts operating in South Australia and Tasmania. The fourth non-Labour state, Queensland, already has a free hospital system. . The refusal of the four nonLabour states to sign into medibank is causing tremendous confusion in their .

populations. A $1.5 million Commonwealth ad¬ vertising campaign announcing "free" coverage under medibank from July 1 will induce many people to surrender privately arranged hospital insurance in

on July 1. the belief that free accommodation will Here are some of his problems: including (where medically indicated) a private room or the most sophistibe available to them. . Doctors in private practice are cated medical procedures. The president of the Australian Med¬ A person's enrolment in the scheme bitterly opposed to the scheme and ical Association, Dr. Keith Jones, has would also entitle him to free medical have declared they will not be paid described the promotional campaign as benefits at 85% of a government- by hospitals instead of by patients. "irresponsible, dangerously misleading say they will continue to charge and likely to create chaos in Australian approved fee schedule. In no case They would the difference between the bene¬ what they consider to be the appropri¬ health services." fit and the schedule fee be more than ate fee and this fee must be paid by . Patients will have to claim medi¬ the patient. cal benefits from a Health Insurance $5. . Australia's six states have sovThe whole scheme would be financed Commission. as yet, the commis¬ ereign powers and run their own hos¬ sion has not But, from general revenue. a functional established pital services with the assistance of base in the community to offer the Early in March the new Health In¬ Commonwealth (federal) subsidies. surance Commission announced it had same convenient claims and payment To introduce free hospital care (in branches now provided by the volun¬ begun printing nearly 10 million medi¬ bank cards (carrying each individual's other words, abolish the means test tary health insurance funds whose func¬ personal identity number which will which governs free hospitalization at tions it will take over. The funds have speed up claims processing). present) the Commonwealth must con- refused to act as agents of the commis¬ Initially 7 600 000 individual cards clude financial agreements with each sion while it is establishing itself. and 2 400 000 family cards (containing state. The commission is now frantically the names and health insurance num¬ Four of the states have non-Labour contacting the nation's 6000 retail bers of children up to age 16) will be governments, and these have declared pharmacists, offering to pay each of printed. The average family will re- opposition to medibank. These govern¬ them $200 a year, plus 50# for each ments are objecting to the wider powers claim form that they check and for¬ sought by the Commonwealth and also ward to the commission. Pharmacists *Mr. Lord is a medical journalist resident in want better assurances about the con¬ would not have to handle any cash, Sydney, NSW. His article was specially commissioned by CMAJ. tinuity of adequate funds which the but they could expect a deluge of in-

1128 CMA JOURNAL/MAY 3, 1975/VOL. 112


for information about medi¬


. The commission's huge nation¬ wide computer network must be regarded as unproved. It is still being set up, and the potential for errors, breakdowns and other disasters is fright-


think out the machinery to make it work. That machinery has produced total and implacable opposition to the scheme from almost all who have to work within it: the Australian Medical Association has rejected it as have numerous

Objective agreed




tions, the voluntary health insurance in¬ dustry (whose life expectancy becomes virtually nil) and other providers of

private health care such as private hos¬ Nobody quibbles with the objective pitals and nursing homes. of the government's health scheme: The Australian Medical Association elimination of fear of the high cost of has not wavered in its opposition to

illness. But when the government, then in opposition, started to spell out how it would achieve its objective, it triggered what has probably become the most widespread and sustained political de¬ bate Australia has ever known. It began in 1968 when the Labour Party, after 20 years in the political wilderness, seized upon a thesis written by two economists, Drs. R.B. Scotton and J.S. Deeble. From the bare bones of that document the party had to

Labour's scheme. While it has been criticized for not accepting compromise, it has consist¬ ently pointed out that the government has declared the basic features to be "non-negotiable" and therefore outside discussion. Perhaps the AMA's reluctance to negotiate and its use of every pos¬ sible device to block the scheme's pro¬ was in the hope that the gress Labour government would fail and the scheme be abandoned.

Three methods of billing will be open to private medical practitioners when the government impiements the first stage of its free health scheme (free insurance against medical and hospital costs) on July 1. The methods are: . The doctor may give his patient an account for his services. The patient pays the account and then presents the receipted account to a new government health insurance commission to obtain medical benefits (85% of a government list of fees). . The doctor gives the patient an account and the patient sends it unpaid to the commission, The commission returns a cheque to the patient for the amount of benefit. The cheque is made payable to the doctor. The patient sends the doctor the cheque together with any additional amount required to cover the doctor's fees. . The doctor agrees to accept from the patient assign¬ ment of medical benefit in full settlement of his account and sends his account direct to the commission (bulk billing). The Australian Medical Association is maintainmg strong opposition to the government scheme. In a bid to tbwart government objectives (principally the objective of inducing doctors to bulk bill the commission and thus relieve patiente of any cash outlay), the association has advised members; . Not to bulk bill the commission, because this would make doctors dependent on the state for the whole of their income destroying the contractual relationship between patient and doctor and placing doctors' economic future in .


. To seek cash payment from patients whenever it is reasonable to do so (to embarrass the health insurance com¬ mission by overloadmg it with patients' demands for cash settlement of medical benefit claims). . Not to sign any agreement with the minister for social security or with the federal government. (This refusal would prevent hospitals' reaching agreements with doctors over nonfee-for-service methods of payment and hence frustrate intro¬ duction of the free hospital scheme.) . Not to accept payment for services rendered to patients m "free" hospital beds except under terms agreed between the state branch of the association and the government of the doctor's particular state. . To urge patients to retain membership of voluntary health insurance funds for preferred private hospital accom¬ modation (for which patients must pay).

While the government's early demise real possibility only a month ago, the prospects are now more re¬ mote. The Opposition's leadership worries (Bill Snedden has just been deposed in favour of Malcolm Fraser) and Mr. Fraser's undertaking not to refuse medibank's appropriation in the supply bills in the Upper House which the Op¬ position controls seem to have sunk that hope. The AMA may therefore become more amenable to negotiation, in the knowledge that the longer medibank operates the more reluctant will be any future government to dismantle it. The AMA is concerned that Labour's health scheme amounts to virtual nationalization of medicine. It says the government is seeking to induce doctors to bulk bill a central commission instead of billing patients individually. This would make doctors pieceworkers for the government. And while bulk billing may have some attractions now because of the reason¬ able relationship between medical bene¬ fits, a government-approved list of fees was a


PARAMEDICAL SERVICES $30,000 + RANGE We require a doctor to plan, manage, coordinate and control a physical rehabilitation treatment and care program at The Workmen's Compensation Board's Hospital and Rehabilitation Centre, Downsview, Ontario. This incorporates physical and occupational therapy, remedial gymnastics and other treatment modalities. The applicant must be licensed to practice in Ontario. If you wish to apply for this position, please write in confidence, enclosing a curriculum vitae to: Executive Director, Human Resources Division, The Workmen's Compensation Board, 2 Bloor Street East Toronto, Ontario, M4W 3C3.

The Workmen's

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CMA JOURNAL/MAY 3, 1975/VOL. 112 1129

*pssr! stBPWf^etwaiensfmm^'W, Beme TWfMxwweve GeeEP&WK mmMretm'* This 'joke' is used by AMA to illustrate some of the fears shared by doctors and other health workers about the new health scheme'. It heads a handout called "So wbat's wrong with nationalised health?" which counters some of the government propaganda supporting the service.

and the AMA's list of recommended

and free

outpatient treatment. The pennot extend to private specialist care. The govern¬ ment scheme would not distinguish be¬ tween pensioners and the rest of the community. The AMA says the problem of the uninsured can be overcome by more vigorous promotion of a subsidized health benefits plan for the indigent (which exists already) and by govern¬ ment subsidy of pensioners into volun¬ tary health insurance. Also against the Labour scheme are Australia's private hospitals and religi¬ ous and charitable hospitals which have developed in response to community demand. They see no future for themselves

fees, this relationship will deteriorate sioner medical service does once

the scheme is established.

Similarly, doctors providing free treatment in hospitals would lose their economic independence because they would be paid by the hospital on a sessional, salaried or contract basis. The medical profession has had bitter experience of the difficulties in having government adjust the fees it pays doc¬ tors for other services.

All this, the AMA says, without the

government's incurring compensation costs for direct nationalization of doc¬ tors' offices and equipment, in the absence of any public demand for change and with the certainty of either enormous

cost or rationed services.

The association says the present based on voluntary health system insurance, fee-paying beds and fee-for-

service-treatment of those who can af¬ ford to pay needs only minor ad¬ justment to solve the major criticisms. The two biggest shortcomings of the present scheme are said to be its lack of universality and its "second class" regard for pensioners. According to the Labour govern¬ ment, more than 10% of Australians lack cover for the costs of what may be catastrophic illness. The AMA and the funds say it is only 3%. Pensioners get free medical treat¬ ment from general practitioners (who are paid a discounted fee by the gov¬ ernment), free public ward treatment

once the source of

government becomes the sole

health funds. know there are not

fects of the present scheme could have been remedied with a fraction of the effort and money put into getting a new scheme under way. Mr. Hayden had alienated the majority of the pro¬ fession upon which he must rely for his scheme to work. The principles of Labour's health plan were enunciated and widely publiaware cized in 1968. It was then that the scheme would become part of the Labour Party's platform in the general elections which had to be held that the before the end of 1969 AMA and other health care organiza¬ tions began their campaign of opposi¬ tion which has altered little to the

present day. Reaction

enough They Labour's policies acted as a stimulus public hospitals to meet the expected demand for free treatment. to both the AMA and, separately, the They expect irresistible financial pres¬ then Liberal-Country Party (Conserva¬ sure either to be taken over and "go tive) coalition government to develop new policies to protect people finanpublic" or go to the wall. They warn that Labour's health cially from the high costs of illness. The AMA and the government emscheme will produce a situation in which only the wealthy will be able barked upon a "most common fee" to receive a full range of care. Private scheme which was supposed to relate hospitals may reemerge but will be medical benefits to identifiable fees the fees most doctors were charging available only to the wealthy. The Medical Journal of Australia for individual medical services. The doctors thought this would give has been largely silent on the contro¬ versy. But it broke its silence Mar. 8 them flexibility to increase their fees, as appropriate, from time to time and this year. The journal said, in part, that the de¬ that the government automatically beds in

1130 CMA JOURNAL/MAY 3, 1975/VOL. 112


adjust benefits in step with the in "common fees". The coalition government and its Labour successor, however, both tried to use the list of common fees as a schedule which only it would adjust and to which doctors should adhere. No updating formula could be agreed upon. its The AMA's Federal Assembly annual "parliament" abandoned this scheme in 1973. The immense medicopolitical activity generated by Labour's health policies in 1968 saw the emergence of new medical organizations to protect the in¬ terests of specialist groups. Some af¬ filiated with the AMA; some were hostile. One of the largest of the new groups is the Australian Association of Sur¬ geons which has a membership of 1500 of a total Australian medical popula¬ tion of about 18 000. It is affiliated to the AMA (which itself has about 14500 members) and is bitterly opposed to the Labour scheme. Another new organization is the General Practitioners' Society (about 1500 members) which falls to the ex¬ treme right. It is hostile even to the AMA, which it says is too moderate in its opposition. would move

Reform group Until 1973, it seemed to the public that the organized medical profession was unanimous. But there appeared in the eastern states a Doctors' Reform

Society which, though having only some 400 members, proceeded to reap publicity for its anti-AMA statements and general sympathy for Labour's health scheme. The society draws its members from the young hospital resident and regis¬ trar (intern and resident) population doctors who have never been in private practice and who enjoy the comparative luxuries of regular working hours, paid annual leave, sick leave and the other benefits of salaried practice. The AMA no doubt has noted the views of this younger generation and sees the implications for the future. But

how permanent is the attitude and idealism of these young doctors? Because hospitals and other employ¬ ers of doctors must compete with the private sector for staff, salaried doctors enjoy substantial salaries at present a situation which the AMA warns will quickly reverse if the Labour govern¬ ment succeeds in killing private medi¬ cine. The minister for social security sowed the seeds for public acceptance of medibank by first trying to destroy the credibility of a critical medical


State governments were told the He portrayed the AMA as an or¬ ganization interested only in money. A Commonwealth would share net oper¬ few weeks before the Labour Party ating expenses of hospitals an $80 became government in December 1972, million windfall for their impoverished Mr. Hayden said of the association: systems; benefits for private patients in public hospitals were raised from $10 It wants the taxpayers to pay up even to $16 a day. more generously, if that is conceivable, The sugar coating added to the cost. than has been the case in regular periods of the past few years. The AMA's de¬ Estimated full-year cost of Labour's mands are insatiable and its behaviour health scheme went up $172 million unconscionable. It diminishes and humbles to $1012 million. A proposed tax levy the status and prestige of a great pro¬ on all taxpayers of 1.25% of taxable fession by its display of compulsive greed. income to help pay for the scheme The government set about building rose to 1.35% and what was to have the machinery for its health scheme been a 1:1 matching subsidy from gen¬ by setting up a health insurance plan¬ eral revenue was increased to 1.5:1. The Australian Medical Association ning committee chaired by coarchitect Dr. J.S. Deeble. It published the com- said the government had virtually remittee's report in mid-1973 and invited written the earlier report. The changes demonstrated the justification of the public comment. Coincident with this, the AMA an¬ AMA's campaign, but the scheme still nounced the opening of a $1 million represented a plan to socialize health appeal to doctors for funds to fight care and the basic objectionable fea¬ socialized medicine. It raised less than tures remained. half of this and was disappointed by the response. Parliamentary defeat The government found itself conRegardless... founded by a hostile Upper House But the association pressed on. It when it tried to give legislative effect prepared kits of anti-health scheme to its program in 1973. Two key pieces of legislation the propaganda for distribution to every doctor's office, took time on television and space in newspapers to defend the present scheme, and in May 1973 pub¬ for the first time a full lished list of medical services and recom¬ mended fees. This book had tremendous political significance when the government es¬ tablished, that same year, an independent fees tribunal to produce a list of fair and reasonable fees to which it proposed to relate medical benefits. The government lacks control over doctors' fees and can use a list of fees "for medical benefit purposes only". State governments, however, can regulate doctors' fees by using their powers of price control (a legislative relic of World War II). This measure was adopted for medical services by the Labour state government in South Australia and price control still applies there. From the response to the health in¬ surance planning committee's report, the government saw there was con¬ siderable opposition. It had to broaden the base of community support. On Nov. 8, 1973 Mr. Hayden issued his white paper, "The Australian Health Insurance Program". Gone were some of the undesirable features of the earlier report, including financially coercive measures to force doctors to bulk bill a central commis¬ sion and the threat to refuse to pay medical benefits to patients whose doc¬ tors did not charge a government* approved fee.

Health Commission Bill and the Health Insurance Commission Bill were defeated in the Upper House in De¬ cember 1973 and became two of six defeated bills which the government used as grounds for a dissolution of both Houses of Parliament. So health was one of the major issues in the ensuing general elections in 1974. The Labour government was re¬ turned by a narrow majority and still failed to gain control of the Upper House. This lack of control caused the defeat of a number of enabling bills, but the government managed to get its two main bills through an unprecedented joint sitting of both houses (the prescribed way of dealing with rejected bills after a double dissolution of Parliament). Several of the enabling bills sought to give effect to the tax levy. The de¬ feat of these has forced the govern¬ ment to finance the scheme from







is politically more palatable because it does make the scheme ap¬ pear to be free. On the point of cost, the AMA en¬ gaged a firm of chartered accountants to cost Labour's health proposals. The firm came back with the calculation that the scheme would cost Australia an extra $760 million, taking the total cost of medical and hospital care to around $1680 million in 1975-76. The association says the government would have to increase income tax by 7% to get this extra money.

CMA JOURNAL/MAY 3, 1975/VOL. 112 1131

In March this year, Mr. Hayden released the government's costings. The two costings are difficult to compare because the government excludes the hospital participation of New South Wales, Victoria and Western Australia. According to Mr. Hayden, his scheme would cost an extra $2 million. AMA spokesmen say the estimate of the chartered accountants would not greatly differ from Mr. Hayden's, if Mr. Hayden's costings included all states' participation. A well known Melbourne economist, Professor Richard Downing, has warned that three of the government's welfare proposals - the health scheme, a national compensation and rehabilitation scheme, and a national superannuation scheme - would require a tax increase of 25.5%. Other problems While private medicine is under assault via the government's health scheme, it is also under threat on other fronts. The government's national compensation and rehabilitation scheme, for example, is seen as another backdoor method of nationalizing medicine. This scheme - now under study - would provide compensation for all victims of injury, sickness and congenital disability. Doctors fear that the scheme could cover the whole range of health services and that the government, by noinmating a fee for any medical service performed under the scheme, would effectively nationalize the profession. Also, Feb. 1 saw the Trade Practices Act become fully operative, with immediate effects on the profession. It has thrown a new complexion on the bitter fight between private medical practitioners in the Australian Capital Territory (Canberra) and the Labour government. The government has turned the national capital into a social laboratory. It has assailed private medicine by setting up salaried health centres to provide free medical care and is establishing a free hospital treatment scheme. The government wants private doctors to accept payment from the hospital on a sessional basis. The doctors say they will provide services only on a fee-for-service basis. The government countered by threatening to run the scheme on a wholly salaried basis - depriving most private specialists of their livelihood - and advertised internationally for staff specialists. The AMA rejoined by placing warning notices in a number of overseas medical journals including CMAJ and the British Medical Journal. The no-

tices proved most effective and have greatly hampered the government's efforts to staff a salaried service. Meanwhile, some 140 private doctors had got together in Canberra and signed a declaration of aims and intent which amounts to an agreement to boycott the free hospital and medical schemes by refusing cooperation. Sanction sought With the introduction of the Trade Practices Act, the AMA sought sanction of this arrangement from the Trade Practices Tribunal on the grounds that, though the arrangement was a restraint of trade, it was in the public interest to save the private medical system. The Trade Practices Tribunal disagreed and refused to authorize continuation of the agreement. The AMA is now embroiled in a number of expensive legal actions, one of which is an appeal against the tribunal's decision. In another action which may start this month, the association has asked the Supreme Court to declare that medicine is not "trade or commerce" and therefore falls outside the scope of the Trade Practices Act. If this action were to succeed, the legality of the declaration of aims and intent would not be under challenge, and the boycott could continue. Existence of the Trade Practices Act forced the Australian Medical Association earlier this year to withdraw its fee recommendations to members in the Australian Capital Territory (Canberra) and the Northern Territory. The view was taken that the recommendations could be held to be a price list which restricted competition. (The applicability of the legislation to the AMA's fee recommendations in the six sovereign states is uncertain.) Abomination July 25, 1972 - 5 months before he became prime minister - Gough Whitlam stated: It would be intolerable if a Labour goveminent were to use the alibi of the constitution to excuse failure to achieve its socialist objective - doubly intolerable because it is just not true that it needs to do so. The major act of nationalization in the traditional sense to be undertaken by a Labour government in the next term will be through the establishment of a single health fund administered by a health insurance commission. One way and another, private medicine in Australia has a real fight on its hands.., a fight some people believe it has neither the capacity nor the resources to win. U

1134 CMA JOURNAL/MAY 3, 1975/VOL. 112

new .Stemetil 'Spansule' Capsules 10 mg for continuous, dependable anti-emetic action Indication: nausea and vomiting due to stimulation of the chemoreceptor trigger zone. Dosage: one or two 10 mg 'Spansule' Capsules every twelve hours. This dosage may be increased as required by increments of 10 mg every 2 or 3 days until symptoms are controlled. For maintenance therapy the dosage should be reduced to the minimum effective dose. Because of the lower pediatric dosage requirements, the 'Spansule' Capsules are not intended for use in children. Contraindications: Comatose or deeply depressed states of the CNS due to hypnotics, analgesics, narcotics, alcohol, etc.; hypersensitivity to phenothiazines; blood dyscrasias; bone marrow depression; liver damage. Warnings and precautions: etiology of vomiting should be established before using the drug as its antiemetic action may mask symptoms of Intracranial pressure or intestinal obstruction. Patients with a history of convulsive disorders should be given an appropriate anticonvulsant while on therapy. Tardive dyskinesia may occur in patients on long-term therapy. If used with CNS depressants, the possibility of an additive effect should be considered. Use with great caution in patients with glaucoma or prostatic hypertrophy. The drug may impair the mental and/or physical abilities required for the performance of potentially hazardous tasks such as driving a car or operating machinery, especially during the first few days of therapy. Keep in mind that all medications should be used cautiously in pregnant patients, especially during the first trimester. Side effects: extrapyramidal reactions, disturbed temperature regulation and seizures have been encountered. Other side effects due to phenothiazine derivatives should be borne in mind; for complete list, see product monograph. Overdosage: no specific antidote; symptomatic treatment. If a pressor agent is required, norepinephrine may be given (not epinephrine as It may further depress the blood pressure).

Complete information upon request MEMBER

Australian health service plan heading for July crunch.

Australian health service plan heading for July crunch By Ron Lord* This year, Australia's still-youthful Labour government will implement the first p...
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