Untangling The Knotted Mess Of The Safety Net

Sydney Morning Herald

Thursday April 12, 2007

Mark Metherell is a Herald journalist.

When Tony Abbott released the latest Medicare safety net figures, he made the mischievous claim that Labor-held electorates received the largest benefits per recipient.

True. But the federal Health Minister glossed over the fact that wealthy Liberal electorates were showered with much more cash from the taxpayer to help meet their specialists' bills.

So, while 14,827 denizens of the electorate of Wentworth in Sydney's east collected $7.78 million last year, just 1899 in Fowler, 20 kilometres west, picked up $1.08 million. That means each of the far fewer recipients in Fowler, based around Liverpool, got about twice what Wentworth people received individually.

People in affluent electorates are more likely to claim the safety net's 80 per cent subsidy on medical bills that exceed $1000 a year than are low- and middle-income families, even though these become eligible when their bills pass the $500 mark.

Ten of the richest electorates account for a quarter of the $257 million taxpayers contributed last year to help defray heavy medical fees. This is not because the well-off are sicker, since health status tends to decline with income.

The figures suggest that lower use of the safety net by those on low incomes is not because they enjoy better health, but rather a combination of a paucity of local specialists and the fact that people on tight incomes can't afford the admission price: the heavy initial cost of private specialist and diagnostic services before reaching the eligibility threshold.

In fact the battlers seem to have more worries about their health, if their much higher rate of visits to general practitioners is a guide. In Fowler, there were 60 per cent more GP services last year than in Wentworth, for example.

In Fowler as in most of Sydney's western suburbs, GPs bulk bill virtually all their patients, while their colleagues in Wentworth charge more than 25 per cent of their patients an extra fee.

The absence of a patient charge drives some of this higher GP usage in the west. It is also likely to be demand from patients with chronic illness who do not seek the potentially more effective attention of a specialist and instead rely on repeat patch-up visits to their GP.

The growing inequality in access to specialist health care has been underlined by recent analysis showing private hospitals have eclipsed public hospitals in NSW over the past 20 years in many areas, including eye and ear operations and cancer treatment.

Other research has found the relative gap in death rates from avoidable causes such as heart disease between the well-off and those on low incomes has widened over the same period.

If Abbott is concerned about these trends, he is not showing it. He says he would like to see continued growth in private health insurance, and blames state governments for ailing public hospitals.

At the same time, federal Labor is moving towards greater acceptance of private health care and insurance.

Labor has yet to spell out whether or how it might close the gap in access to care between those with insurance and the majority without, given its limited powers over state services.

When it comes to the Medicare safety net, there is a simple solution: increase the eligibility threshold for high-income earners and reduce it for those on low and middle incomes. Given the safety net is for those in need, a redistribution would align political and equity principles.

© 2007 Sydney Morning Herald

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