The Abbott Government and the privatzation of Medicare

Shaun Wilson has written an important piece  Could Abbott bring an end to Medicare on the recent re-emergence of the issue of up front co-payments for medical services, suggesting that it is the first step in the Abbott Government's likely path to the privatization of Medicare.

Wilson points to a combination of pressure from the private health industry to create more business opportunities for private health insurance and large corporate health providers and the ideological hostility of the Liberal Party to Medicare, as key drivers of the likely privatization of Medicare and the continued creation of 'quasi markets' in the delivery of health services and programs.

Wilson provides brief history of Medicare:

Medicare is a universal health insurance system much loved by Australians, and it came into being under Labor in 1984 on the insistence of the ACTU in developing its Prices and Incomes Accord with the incoming Hawke government. Actually, Medicare built on the energetic foundations of the Whitlam Government’s Medibank, which had been slowly destroyed by the Fraser government in the late 1970s, a destruction that prompted a general strike in 1976. Medicare also faced from the start, strong opposition from the Coalition, private health insurers and the Australian Medical Association.

The Medicare scheme has been an enduring success on a range of evidence. It has been inexpensive in comparative health-cost terms, contains health expenses, and has massive public support. But the Coalition has never warmed to the scheme, reluctantly accepting the political popularity of Medicare in 1996 when then opposition leader John Howard promised to preserve Labor’s signature reform in his bid for office. 

Wilson links the re-emergence of the co-payments issue to the larger agenda of business and corporate Australia to pressure the Abbott Government to widen business opportunities through large scale mass privatization:

Let’s come to the present discussion of “co-payments”, which will considered by the Coalition’s Commission of Audit, led by Business Council of Australia President, Tony Shepherd. There are good reasons to believe the consideration of co-payments—up-front payments for visiting the GP—are more than just an effort to rein in costs given the Abbott Government’s goal to reach surplus over the next decade. Business and the Coalition see opportunities in the present political situation and climate, one in which Australians have been convinced that the economy is in poor shape with a federal budget in even worse trouble, to reduce social entitlements, weaken the public service, and widen business opportunities in a new round of state and federal mass-privatisation. Most importantly, the Coalition remains wedded to a predominantly private health model for Australia and, whether it happens under the Abbott government or not, the pressure to dismantle Medicare, in substance if not in name, is growing.

Wilson then describes four likely steps to the privatization of Medicare:

1. The introduction of co-payments
2. Introduction of a Medicare Select Scheme
3. Sweeten opting out of Medicare by expanding the health insurance rebate
4. Deregulation of private health insurance premiums