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A compromise policy on health care reform

October 4, 2014

In the budget earlier this year the government proposed reducing their subsidy to doctors by $5/visit, which would mean that doctors would then charge their customers a co-payment. The suggested amount for the co-payment was $7/visit, with a maximum payment of $70/year for concession card holders and children.

This policy has been widely opposed, with Labor, Greens, and Palmer all condemning the spending cuts, a large outcry from the medical industry and the left-wing chatterati, and a negative reaction from a majority of the public. If nothing changes, then it looks likely that the reform will fail in the Senate and nothing will change.

Here is an alternative (more moderate) reform proposal that achieves many of the same goals but might be more popular…

1) The suggested copayment should be dropped to $5/visit instead of $7/visit.

2) The GP subsidy should not be reduced for children, so we would still have the same bulk-billing system for children that exists today.

3) There is currently a financial incentive paid to doctor who bulk-bill for concession card holders and children. The government wants to provide this incentive only to doctors who charge the copayment. This should be changed so that the incentive is paid to any doctor who charges the $5/visit copayment or less… which means that doctors can choose to charge a lower copayment or continue bulk-billing. 

4) The maximum payment for concession card holders should be $50/year.

5) And here’s the kicker… concession card holders should have their welfare increased by $50/year. This means that in total, concession card holders cannot be worse off, and they will actually be better off if they visit a doctor fewer than ten times in a year. 

6) Since the savings from a lower GP subsidy will now be used to pay for higher welfare payments to concession card holders, there is no money available for the “research fund” which was an unnecessary last minute attempt at buying public support that has clearly failed. The research fund should be scrapped. 

These combined policies would succeed in introducing more price signals into the healthcare sector, and would decrease the amount of health subsidy paid to middle and high income earners (reducing tax-welfare churn), but it would not be the end of bulk-billing and it would not financially hurt the poorest segment of society. Indeed, the above changes would actually be better for disadvantaged people compared with the status quo, and it gives them the dignity of receiving the $50 directly and being able to make their own life decisions.

It is understandable that the government wants to reform the health sector, and it is understandable that many people are worried about their proposed reforms. But this isn’t an “all or nothing” situation. The above proposal shows how we can have some moderate reform without the fear.

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Categories: Uncategorized
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  1. October 4, 2014 at 11:19 pm
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