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ASHLYNNE:

From Schwartz Media, I’m Ashlynne McGhee. This is 7am.

The wait for elective surgery in our public hospitals is longer than ever…

But it seems there’s a way to jump the queue.

If you can afford to pay for private care in a public hospital… you might find yourself being offered more perks than just a free bathrobe and some slippers.

Today, Lawyer and contributor to The Monthly Russell Marks on how fair our public health system is and what happens when your own child’s health is on the line.

It’s Thursday, April 25.

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ASHLYNNE:

Russell, you've been speaking with the parents who were really young children, this kid called Sam. Tell me about Sam's story.

RUSSELL:

Sam was about 18 months old when I spoke to his father, Steve. Now Sam goes to childcare. And as all parents know, childcare centres tend to be a bit like petri dishes for all kinds of viruses.

Sam is affected by the viruses he encountered at childcare, perhaps slightly more than other kids, because he had particularly large adenoids. So Sam's parents took him to their GP, who referred him to an ear, nose and throat specialist who did some tests, told them that Sam had more or less permanent fluid in his ear canals, which meant that Sam was apparently only hearing at about 40% of normal capacity, like being permanently under a pillow, is how Steve said the specialist put it.

Hearing loss is one of the myriad sources of anxiety for 21st century parents, and in the worst cases, children experience hearing delays and developmental difficulties because of it. So the specialist recommended that Sam's adenoids be removed. The specialist told him that waiting too long can lead to permanent hearing loss, and that the best time to do the surgery was before Sam turned two.

Now here's where things got a bit strange, Steve told me. Sam’s Specialist told him that Sam could be waiting perhaps as long as three years or even longer, on a public hospital waiting list. And of course, that would have risked Sam's hearing.

He asked the specialist whether there were any other options, given that they didn't have private insurance. And it turns out that they were. Steve was told that he could sign Sam up as a once off private patient. The clincher was that if they went down that path, Sam only had to wait 3 or 4 months for his surgery. Steve confided to me that he still isn't sure what happened to the other kids on the waiting list because Sam got his surgery faster than usual.

For a parent, it's a no brainer decision. Steve and his partner, they made the decision that was in their child's best interests. Is that in every child's best interests? Who knows?

ASHLYNNE:

It is such an incredibly tough decision to have to make there. Talk to me about how this actually works in practice. So when people are admitted as private patients to the public system, like how does that actually work?

RUSSELL:

There's not much that gets reported on this issue. So I'd spoken to Steven and then I relayed Steve's story to Doctor Rachel David, who is the CEO of Private Health Australia. Private Health Australia is the peak body of the, for the private health industry, including the health insurance funds and the private hospitals.

And Doctor David, had a pretty visceral response. She said, that's outrageous and probably illegal. The extent to which it's possibly illegal, I think it's pretty murky. There's a series of agreements that state and territory governments have signed up to, but basically public hospitals are under an obligation to treat people according to clinical need. There's relatively minor perks that a promise to patients who sign up as private patients. Those perks might include different forms of television, like foxtail or bathrobes or, you know, relatively minor things like that. They certainly don't promise shorter waiting lists, but shorter waiting list seems to be exactly what's happening.

So the Australian Institute of Health and Welfare, which is the independent statutory government agency responsible for collecting and publishing data that kind of shows the health of our health systems, reports that for the most common surgical procedures conducted in public hospitals, public patients of waiting more than twice as long as private health insurance patients, which seems pretty irrefutable.

ASHLYNNE:

If a patient does decide to use their private health insurance to pay for treatment in a public hospital, is that necessarily a bad thing? Because aren’t they then helping to pay for that public hospital – taking the burden away from taxpayers?

RUSSELL:

Absolutely. And you can see a clear public benefit, at least from the hospital's point of view.

If we're talking about clinical need, if there is queue jumping going on, then that would seem to be a pretty huge issue. So the figures are that between 10, 15, 20% of patients in public hospitals are being treated from sources other than the public hospital budget. So it's not as if a majority or even a significant minority of patients are being treated in this way in public hospitals.

But one of the concerns that Rachel David spoke to me about was that the numbers of patients who are being treated this way in public hospitals has crept up over recent years and decades.

ASHLYNNE:

Coming up after the break… how we ended up in this position with a two speed health care system…

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ASHLYNNE:

Russell, how did we get to this point where there's so much overlap between our public and private health systems?

RUSSELL:

It's a difficult and potted history. Medicare is 40 years old this year.

Audio excerpt – Medicare promo:

“Any day now you’ll receive this envelope. It’s vitally important that you read what is inside. Because inside is your Medicare enrollment form and a brochure explaining how Medicare will provide every permanent resident with basic health insurance.”

RUSSELL:

Before Medicare, there was basically private health insurance and charities and of course, public hospitals. And Medicare was itself a compromised arrangement. It was started abortively by the Whitlam government in the 70s. And then Fraser got rid of it and then it returned under Hawke.

Audio excerpt – Bob Hawke:

“Every Australian from new born babe to prime minister can share in the cheapest, simplest and fairest health insurance scheme that Australia’s ever had - Medicare.”

RUSSELL:

But the big impact of Medicare was that the private health insurance industry suffered. Private health insurance statistics or coverage of the funds went from about 67% in the pre Medicare era to about 45% immediately afterwards.

Audio excerpt – John Howard:

“You have the introduction of a 30% tax rebate for private health insurance.”

RUSSELL:

Subsidies were introduced under the Howard government in the 90s. They include Medicare levy surcharge on high income earners who aren't privately insured. They include the private health insurance rebate, which is a revived pre Medicare policy through which taxpayers contribute to the cost of middle income earners premiums. And it includes a lifetime health cover, which penalises people over 30 with higher premiums for each year they are insured.

But even with all those subsidies, only 45% of us are taking out private health insurance which is one of the factors that cause private health insurance premiums to continue to rise.

The way we've done it in Australia is pretty unique. We've sort of bolted Medicare on to the existing private health insurance arrangements, so that each is kind of dependent on the other. We've got this sort of co-dependent dual system, which ends up being really complicated for people like journalists or politicians who want to sort of figure out what exactly is going on and who's paying for what. The question that is probably relevant for patients, is whether this balance, the balance between the public system and the private system is in the public interest. And there's a perennial debate over that question.

ASHLYNNE:

Can you imagine for a moment in Australia without a private health care sector? Like what? What would that actually look like? And, I guess could the public system survive? Like essentially does the private health system prop up the public system?

RUSSELL:

So the federal government firmly believes that the balance is correct. And happily for the private industry, the federal government tends to believe what the private industry believes. So there was a really interesting study that was funded last year by the federal health Department, which found that each person who takes out private health insurance saves the public budget about $550, which is a really good finding for both the private industry and the federal government, which spends nearly $10 billion a year on the various forms of subsidies that are propping up the private health insurance industry.

Another really interesting study last year by three University of Melbourne health economists and their study looked at admission and waiting lists data from Victorian hospitals, both public and private, between 2014 and 2018. Now, they did find a statistically significant waitlist reduction of about a third of a day for each 1% increase in the health insurance uptake.

However, they concluded that the practical significance of that effect is limited, if not negligible. So, in other words, even if the proportion of insured Australians were to increase from the current 45%, say to the pre Medicare 67%, which is, I'd have to say, absurdly unlikely. Public hospital waiting lists would only be about a week shorter than they currently are.

We've certainly got an enmeshed system which seems really entrenched. And there must be questions about, you know, who benefits from this system continuing and why doesn't it change? Why are there enormous waiting lists that much longer than what we should expect in Australia for one of the wealthiest nations on the planet? And yet we still give $10 billion as a community to to the private industry. That only makes sense if, as is firmly believed by both the private industry and the federal government, that the private industry takes the pressure off the public system. I'm just not sure that the evidence bears that out.

ASHLYNNE:

It’s such a tricky thing isn’t it, because there are these huge ethical questions and yet when you’re sitting there in the doctor’s room facing that long wait list that, in all reality is not going to get any shorter any time soon, what do you actually do in that situation? I mean if you’re lucky enough to be able to pay should we? Or do you just wait your turn and trust that the public system will treat you as urgently as your medical condition requires? What do you actually do there?

RUSSELL:

While I was researching this story, our own son was diagnosed with large adenoids. He needed an adenoidectomy. We were told very similar things to the way what Steve was told. We could wait a long time, or we could pay a bit more to have the surgery and very quickly. Prince of any principles that we might think underlies our decision to not have private health insurance and yet pay a few hundred dollars, as it turns out. And and our son had his surgery. We only had to wait a couple of months, and he's now fine. But really, really big questions as to whether he pushed somebody else out of the surgical waiting list on the day that he had his surgery.

So they're really, really big and deep ethical questions here that I would say, and particularly after the experience that my partner and I have had, probably shouldn't be left to individuals. It would be better to have everybody treated according to clinical need rather than their ability to pay.

ASHLYNNE:

Did you feel bad making that decision?

RUSSELL:

Of course. On one level. But on the other level as a parent. Not at all.

ASHLYNNE:

Russell, thanks so much for the chat today.

RUSSELL:

My pleasure.

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ASHLYNNE:

Also in the news today

Inflation figures have come in higher than expected, dampening the expectations of an interest rate cut this year.

According to Consumer Price Index data from the Bureau of Statistics, prices rose by 1 percent during the March quarter, leaving the annual inflation rate at 3.6 percent.

And…

The New South Wales joint counter terrorism team has arrested Seven people following a series of raids across south west Sydney as part of the ongoing investigation into last week’s stabbing of a Bishop.

Australian federal police commissioner, Reece Kershaw, confirmed the raids were in relation to the alleged attack by a 16-year-old boy at an Assyrian church in the Sydney suburb of Wakely.

That’s all from the team today. See you again tomorrow.

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