There are upsides and downsides to health care in Australia. The upside is that we all have access to health care through public hospitals and the universal health care system, Medicare. When you have private health care insurance, the upside is you have more choices. With private health care insurance waiting times for elective surgery and access to other medical specialist care is reduced. The downside is that you pay for health insurance and sometimes for health care services, not covered by your policy. The other downside is that Medicare is under pressure as health care costs increase. The system cannot keep up with demand and that is a big downside, just plain “bad news” for all Australians.
The 2014 Report by the Grattan Institute tells us that “every year public hospitals spend one billion dollars with little or no benefit”. That is a particularly big downside. Spending one billion on health care in Australia with little or no benefit!
HEALTH CARE COSTS GROW
Each year health expenditure is growing. Spending on health in Australia was $161.6 billion in 2014–15. Expenditure was $4.4 billion (2.8%) higher than in 2013–14. The health care share from the economy, that is the amount from Gross Domestic Product (GDP) for the period was 10%. We are told that health care costs are too high, yet the USA spent 17.5% of GDP in 2014.
The cost of the Medicare levy to consumers is 2% of taxable income. In 2015-16 you did not pay the levy if your taxable income is less than $21,335 ($33,738 for seniors and pensioners). Now 30 years on from when Medicare commenced are we better off? Not so. It seems the system is on a downhill slide as we are not getting the benefit that was forecast. The intention was that we would receive 75% or 85% of the expended cost to see a doctor or medical specialist. Over time the gap has widened and out-of-pocket expenses for the consumer increases.
GOVERNMENT FREEZE ON MEDICARE REBATES
The government Medicare rebate freeze has an impact on the services provided by general practitioners (GP’s) and medical specialists. The rebate freeze is not helping the doctors, nor the consumers. By 2020, unless something changes, medical practitioners will be getting the same amount for a service they provided in 2014. They must increase their costs, as overhead and operating costs grow.
If the government will not lift the rebate freeze then the consumer will pay. It has been argued that bulk-billing practices, in such an environment, will reduce over time. Already, GP’s in New South Wales are charging aged pensioners $55 for a consultation. Similarly, in Queensland, medical practices are raising their fees so that they can continue to offer bulk-billing to low income earners and age pensioners.
CONSUMER COSTS INCREASE
The refund for a medical visit has fallen over time. For example, I saw an eye specialist three times in the past 12 months. The refund back from Medicare is 36% and 37% of the total cost, depending on the item number. But no more than 37%. Each time I paid $266 of the $360 fee. That is a big out-of-pocket expense to pay. Even if you have private health insurance this does not extend to picking up the gap between a medical fee and the Medicare refund. The downside is that the system is very unwell.
Take another example, a situation whereby a parent needs specialist care for their child, such as a paediatrician. They firstly need a GP referral, as without this they cannot claim the Medicare benefit. The following is just one scenario. In 2015 a parent asks online “my paediatrician visit for my child will cost $250, how much will I get back from Medicare”? A comment is “I only paid $165 and I got back $60 from Medicare”. The gap for this parent is $100. This is a considerable gap, if a parent needs paediatric care for their child and cannot line-up in the public system. No private health insurer covers this type of expense, it is out-of-the pocket for the parent.
OLDER AUSTRALIANS PLACE PRESSURE ON MEDICARE
Let us go to the other end of the spectrum, older Australians. The Australian Medical Association (AMA) has a position statement for Older Australians access to Medicare. On 13 August, 2012 they stated “between 2010 and 2050, the number of older people (65-84 years) will more than double, from 2.6 million to 6.3 million, and the number of very old (85 and over) will more than quadruple from 0.4 million to 1.8 million.” Note: the “very old”. My mother at 90 years is now in the “very old” age group. It is not enough to be “older” the aim now is to be “very older”. I will never understand such an approach. Just “older” for whatever age group over 65 years would suffice. But then again, it gives “older” people a new goal in life – to reach the age of “very older”!
The AMA has called for urgent policy development, given the increased demands for medical services. They bring attention to the fact that older Australians are not being valued as the medical infrastructure needed is not in place. The restructure of Medicare is urgently needed before it fails more and more people. The AMA state that the cost of providing bulk-billed services to older people is unsustainable. What does this mean then for older Australians? It means that we will may have to pay, and pay dearly, for our medical costs. This is already happening as I mentioned earlier. The downside is that everyone will be paying more and some older Australians will die. When people can’t afford to pay, they delay seeking specialist medical care. If they delay too long, the cost is very high – a life! But it seems that all politicians focus on are numbers, not people!
THE COST OF PRIVATE HEALTH CARE INSURANCE INCREASES
Last week there was the announcement that private health care will go up by 4.84% in April, 2017. Almost 50% of Australians have private health care. However, that is about to decrease as many are now opting out of private health care insurance, the cost is too high.
If you are not one to abandon private health care you can seek help regarding your options through an Australian Government website. I decided to compare policies and find out what would be the yearly cost for two people, with an excess of $500 for Top Hospital and Comprehensive General Cover. Of the eight recommended policies, the lowest cost was $5,880 per year and the highest cost was $7,758 per year. Both are higher than our current yearly private health insurance cost of $4,548, with the government rebate. An increase of 5% will take our cost to $4,775. For some time, we have been thinking about our general cover which includes, podiatry, psychology, acupuncture, naturopathy, remedial massage etc. We have paid the general cover premiums for decades but only access optometry and dental services. Do we need this? Will we need this? Should we like others, take the risk and jump ship when it comes to general cover?
OLDER AUSTRALIANS AND PRIVATE HEALTH CARE INSURANCE
A retired couple living a modest lifestyle requires $35,000 per year; a comfortable retirement will cost $60,000 per year. For a couple living a modest lifestyle their health care costs, based on our cover would be 14% of their yearly budget. For a couple living a comfortable lifestyle the cost reduces to just over 8% of the budget. Whatever way you look at it, all around there are downsides.
WHAT IS THE SOLUTION?
The solution is not in the hands of consumers. It is in the hands of the Federal and State Governments to work together with medical providers in order to improve health care options for Australians of all ages. The health care system is sick and needs urgent attention. While we all wait for politicians to restructure the system and not just tinker around the edges, what do we do? The best answer I can come up is diet and exercise and have a regular health check with your GP if you are older! Making sure we don’t fall into the category whereby we are being over-serviced. Over-servicing does happen therefore it is always a good idea to question the doctor about the treatment plan. All older Australians who can access bulk-billing can easily become one of the group of “worried well” seeing their GP, just in case! Also, what about the cost of going to the doctor’s every time just to get a repeat prescription. That is something that could be addressed and potentially save millions, if not billions.
In the meantime, we eat healthy foods, no cakes, no chocolates, limit alcohol and no sugary drinks. Reduce portion sizes, that is, only eat enough to be satisfied and drink lots of water. What – no chocolates! My 90-year-old mother loves chocolates and at her age it is one pleasure she should keep enjoying. What about you? What are you doing to keep healthy to reduce your health care costs? Are there any other upsides that come to your mind?
P.S. I have great admiration for the dedicated and hard-working doctors, nurses and allied health professionals across the country. This is a great upside, during so many downsides!