"We are now in the world of 'big insurance,' with health funds squarely in the business of providing financial returns to shareholders ... Private health insurers serve their shareholders, meaning they don't necessarily seek to actively protect or advance models of care that result in the best health outcomes for members," chief executive of St Vincents Health Australia Toby Hall, Australia’s largest not-for-profit health-care organisation, wrote in the October 10 Sydney Morning Herald.
In an article titled, "Patients to emerge biggest losers in private Medibank," Hall said: "After all, the last thing we need in Australia is a US-style system of 'managed care.'... Inflicting the American-style insurance model of 'lowest cost wins' dressed up as quality is the wrong path for our community's health."
This follows the federal government's announcement of pre-registration for shares in a privatised Medibank Private in late September, with the release of a prospectus in late October and the planned listing of the company on the stock exchange in December.
Banks have estimated the value of the sell-off of the currently government-owned Medibank Private between $4 and $6 billion.
In preparation for the sale, Medibank Private managing director George Saviddes warned that the company would restrict access to some private hospitals in order to cut costs. Savviddes said that the privatisation of Medibank Private would allow the organisation, with almost 4 million members and a 30% share of the private health market, to "flex its muscle," the October 1 SMH reported.
This is looking dangerously like a move toward the "managed care" system of US private health corporations, where patients are denied treatment and forced to attend particular hospitals and health facilities by the insurance companies. To give an idea, "Medibank Private rival Bupa, which accounts for 27 per cent of the market, recently struck a deal with Healthscope that means it does not have to pay for care if an avoidable mistake occurs," the October 1 Financial Review reported.
Medibank Private made a pre-tax profit of $315 million last year. It is a profit-making operation, the gains of which will be lost to the public purse once the asset is sold. In the past four years, Medibank Private has paid $1.1 billion in total dividends to the treasury.
This means that after about 10 years the profit realised to treasury by the privatisation of Medibank Private will be cancelled out, and the dividends currently paid by the fund to the government will be lost forever.
Moreover, it is likely that private health insurance premiums will also rise once Medibank Private is sold. ALP shadow assistant treasurer Andrew Leigh told ABC radio on September 29, "Labor is certainly concerned about the impact [the sale will have] on consumers."
While the increased reliance of the Australian health system on private insurance is a major problem in itself, the sale of Medibank Private will merely succeed in more fully marketising the system. The result will be an increase in premiums and a worsening of health services to the community overall.
The alternative is to remove all public subsidies and outsourcing from the private health companies, and the strengthening of Medicare as a genuine, universal public health-care system.
Meanwhile, as the government's proposed $7 GP co-payment plan for Medicare remains held up in the Senate, a report by the NSW Health Department has revealed that such a GP co-payment would result in at least 500,000 extra patients flooding the state's public hospital emergency departments each year.
The cost of such an influx of patients to state-run hospitals would be astronomical — more than any income from the co-payment. This only emphasises the ideological, not economic, basis of the co-payment plan.
Health officials from South Australia reportedly estimated that an additional 290,000 patients would attend that state's hospital emergency departments if a GP co-payment were introduced. The ABC reported leading SA health official Steve Archer told a Senate hearing in Adelaide on October 9 that the co-payment would increase hospital waiting times from 20 to 66 minutes.
In short, both the sale of Medibank Private and the GP co-payment plan are a serious attack by the Coalition government on our public health system. We need to continue to mobilise to fight against the Coalition government's threat to our right to affordable, universal quality health care, irrespective of income and capacity to pay.
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