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Look beyond the hype to see what’s really wrong with Medicare

One of the problems with Medicare is that it has become locked in place. AAP

The debate about Medicare has received a new focus with comments from Dr Tony Webber, the former director of the Professional Services Review – the body that regulates success to Medicare and Pharmaceutical Benefits Scheme benefits by health professionals.

Dr Webber’s opinion piece in the Medical Journal of Australia (MJA) criticises the medical profession’s treatment of the Medical Benefits Schedule, arguing that there has been considerable misuse of Medicare through overpayments. Dr Webber estimates that as much as $3 billion is being lost.

There was a quick response from the Australian Medical Association (AMA), which accepted that there were some instances of abuse but argued that it was a matter of a few bad apples, common in every occupation, and not a systematic problem that runs through medical practice. The debate quickly turned into a tit-for-tat, at least in the general media.

But the points Dr Webber raised go more deeply into how we practise medicine. Many of the abuses he identifies stem from deeper structural problems of the system, not from a sudden outbreak of evildoing among doctors.

Medicare was designed in the 1960s and 1970s to meet the problems of that period. There has been no major review of the way it operates since then. What we have had is a series of patches – knee-jerk responses as problems become major political embarrassments for government.

In some cases, these have been band aids to hold the system together, such as the addition of Chronic Disease Management Medicare items to the Medicare Benefits Schedule, or interventions to remove political criticism, such as the Howard government’s financial support for bulk billing. Neither has resolved core problems that have been growing for several decades.

It’s important to remember that when the Medicare system was designed, we were a much younger society and the problems in the health system revolved around very short episodes of disease. You went to a general practitioner if you had a sniffle or some other minor complaint. And the fee-for-service system works very well with such occasional contacts. Hospitals worked on an entirely separate system that dealt with very serious illness.

We are now living healthier, longer lives, but an ageing society brings with it a greater burden of chronic disease. Instead of short episodes of illness, ending in death or cure, this growing burden comes from serious and continuing illnesses, such as diabetes, chronic heart disease, and respiratory illnesses. These need continuity of care and management, rather than an expectation of complete cure.

But the Medicare system wasn’t designed to encourage continuity of care. Instead, it uses fee-for-service to fragment care into short episodes. A major criticism of the current system is that it doesn’t provide optimal care because it’s episodic and as a result, it may be creating incentives for abuse of the system as doctors’ incomes are generated by multiplying episodes of care.

And these problems have been compounded by some of the changes in the way medicine is practiced. The lone GP or small partnership – characteristic of the business of medicine in the 1960s – has been increasingly displaced by a growing corporatisation of medical practice at the expense of more traditional forms of practice organisation.

But we know little about these new forms of organization, not being able to answer questions such as what types of demand do they generate within Medicare?

There are anecdotes about abuse of the system, but real evidence is thin. The demand – and supply – for better evidence has been the driving force of reform of clinical practice. The evidence base for improving the organization and funding of health services needs equal attention.

But ultimately the Australian health system has proved very hard to reform. This hardly makes us unique in the world, but there are some very specific barriers to change. The complexities of our Federal system, with divided responsibility and control of primary care (largely Commonwealth) and hospitals (largely the states) were at the foreground in the Rudd and Gillard governments’ reform projects.

And the reform of Medicare raises some deeper ideological sores. Universal health cover – whether Medicare or its Whitlam government predecessor, Medibank – faced a wall of hostility from most sections of organised medicine and the Coalition parties.

Medibank was introduced in 1975; by 1982 it had been dismantled by the Fraser coalition government. Its reintroduction by the Hawke government in 1984 as Medicare provoked similar levels of fury from the Coalition parties, virtually up to the eve of the 1996 election.

Now both sides of politics have become locked into set positions. For supporters of the system, any suggestion of a need for substantial reform is still greeted with apprehension, a possible opening for yet another attempt to undermine universal health coverage.

Even John Howard’s timid acceptance of Medicare in 1996 did little to remove these fears. It can be argued that Howard came to accept that hostility to Medicare had been a principal issue that kept the Coalition in the wilderness from 1983 to 1996, a mistake he was not going to repeat. His health minister, Tony Abbott, repeated a mantra – “the Coalition is the best friend that Medicare ever had”.

A broad consensus (if still grudging in some quarters) runs across Australian politics in support of the main elements of universal insurance. But we need to move beyond the frozen politics of the 1980s and 1990s and recognise that there are major structural faults within the system and that reform needs to start with a fundamental rethink of Medicare.

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