View from The Hill

View from The Hill

Co-payment debate complicates the politics for the Liberals in Griffith byelection

The Liberal Party are feeling the heat from the Medicare co-payment in the Griffith byelection.

The Abbott government is dancing along a fine line as it deals with speculation that it might consider a co-payment for GP bulked-billed visits.

Campaigning in the Griffith byelection Wednesday, deputy Liberal leader Julie Bishop said: “I’m in the cabinet. This has never been proposed. This is not before the cabinet.” The idea had been in “a submission made to the Commission of Audit by an entity … We have no plan for a co-payment”.

On the ABC later, Treasurer Joe Hockey wasn’t ruling it out. Asked whether it was a viable option he said: “That is a matter for the Commission of Audit.”

And a close listen to Bishop’s “we have no plan” line isn’t a rule-out either. It was just designed to leave the impression of doing so. Notably she also said “let the Commission of Audit do its work”.

Bill Glasson, the Liberal candidate in Griffith (one-time president of the Australian Medical Association), who a few weeks ago was open to the idea provided there were adequate safeguards, has received a hammering from Labor. On Wednesday he was also pushing the “no plan” line – and pointing out that the one party that had introduced a co-payment was Labor. That was back at the end of Bob Hawke’s prime ministership.

In political terms the co-payment packs quite a punch. Hawke, with left winger Brian Howe as health minister, brought in a modest payment. It became a potent weapon that Paul Keating used in his bid for the leadership. Keating scrapped it when he took over.

Howe today doesn’t regret the 1991 co-payment, saying it was part of a mix of policies on GP reform as well as a budget measure, although at a political level there were problems with touching Medicare.

But he opposes going down that route now, which he argues would be just a savings measure rather than more widely policy-based. “I wouldn’t start with a co-payment, I would start with thinking about what is the key problem – that is the ageing of the population. And you don’t want to discourage older people from going to the doctor.”

From Bishop’s and Glasson’s comments, they obviously think Labor can do some damage with the spectre in Griffith, Kevin Rudd’s old seat, where the contest is said to be tight, the ALP just a nose ahead.

The current debate about a co-payment was sparked by a submission from a health industry think tank, the Australian Centre for Health Research (headed by former state Labor politician Neil Batt) which had Terry Barnes, a former adviser to Tony Abbott when he was health minister, update the Howe co-payment scheme. The Barnes proposal for a $6 co-payment, which would save about $750 million over the forward estimates, was submitted to the Commission of Audit.

The submission said that further research was needed but concluded that “the risks of GP co-payments can be managed by sensible parameters; prudently setting any co-payments at modest levels; and by keeping their operation under continuous expert review to ensure against the unlikely possibility of unintended clinical consequences”.

It would be surprising if the Audit Commission didn’t think very seriously about the proposal. Among other things, it has been asked to report on “savings and appropriate price signals – such as the use of co-payments, user-charging or incentive payments – where such signals will help to ensure optimal targeting of programs and expenditure (including to those most in need), while addressing the rising cost of social and other spending”.

The debate about the co-payment highlights one feature of our politics. Often parties’ stands on policy are determined not so much by objective analysis but by their political need at the time. What the Hawke government thought sensible, the Shorten opposition condemns.

In the past it was the same with the debate that ended with us getting a GST. A broad based tax on consumption went in and out of favour with Labor.

And the Coalition, which on all philosophical grounds should favour targeted welfare, screamed blue murder at some of the Labor government’s means testing.

A modest co-payment, with proper safeguards for low income people, seems a defensible policy when savings are being sought. But it is undoubtedly politically risky.

There is a high attachment to Medicare and any tampering invites a strong reaction. The co-payment would have to be struck at a level where, while sending a price signal, it did not discourage necessary visits to the doctor. But, the argument would run, it can be difficult in marginal cases for the patient to judge when a visit is necessary or at least prudent.

While the co-payment is simple in principle, complications arise in practice – such as the need to extend it to emergency departments, if distortions were not to be introduced into the system. Barnes has subsequently favoured this.

Abbott will be pressed on the co-payment when he campaigns in Griffith. Politics will tell him to put a dampener on it; policy considerations will press him to keep it on the table.

Going down the co-payment road would take political courage and cost political capital. If the Commission of Audit recommends it, will be be one of those litmus test issues for the government.

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