Doctors warn Australia's private health sector is heading towards a US-style system
"Universal healthcare without private insurance is a loser. Democrats pushing for it should get off that boat. Private healthcare should be seen as a life-jacket, as cost to society without a private mix would make for very rough seas."
By political reporter Stephanie Dalzell
Updated about 2 hours ago
Photo: The AMA president said insurers should not determine the provision of treatment. (Pixabay, CC0)
* AMA president Dr Tony Bartone said increasing corporatisation of private health has given insurers unprecedented power
* Consequences of a shift towards a US-style system could include increased complications, delayed care, delayed pain relief, and longer hospital stays
* Australia's mental health system and aged care services will also be examined at the AMA conference
It is one of the first questions any patient is asked when they walk into an emergency room in the United States, no matter how sick they are.
And now Australian doctors are warning our own health system is shifting towards a similar US managed care model — a patchwork of private and public systems, where health insurers hold an increasing amount of power.
The president of the Australian Medical Association (AMA), Dr Tony Bartone, made the comments as he addressed the group's national conference in Brisbane on Friday.
He called for further private health reforms, telling doctors the increasing corporatisation of the private health system had given insurers unprecedented power within the health sector.
Dr Bartone warned that could lead to a system similar to the model in the US, where patients experience significant variations in care depending on their insurance cover.
"Insurers should not determine the provision of treatment in Australia, they should not interfere with the clinical judgement of qualified and experienced doctors," he said.
"Australians do not support a US-style managed care health system, and neither does the AMA."
'Our public health system should be better than this'
"Let me be clear. Public hospital capacity is determined by funding," he said.
"The consequences are significant. They can include increased complications, delayed care, delayed pain relief, and longer length of stay for admitted patients."
Dr Bartone said the system was "stretched so tight" elective surgeries were being cancelled.
"Our public health system should be better than this. It is unacceptable our public hospitals have been reduced to this," he said.
"Our public hospitals are struggling and require new funding to be better tomorrow than they are tomorrow.
"Demand for public hospitals is not going away."
In a statement, a spokeswoman for the Health Minister Greg Hunt said the Coalition had increased funding for public hospitals by almost $7 billion in six years.
"The new national hospitals agreement will provide an additional $31 billion in public hospital funding from 2020-21 to 2024-25, taking overall funding during this period to $131 billion," she said.
The spokeswoman said private health insurance was "an integral part of our world class health system" and that the Coalition was currently implementing reforms to make it more affordable.
"The Liberal National Government has worked closely with the AMA on all fronts and will continue to do so," she said.
Doctors 'scapegoats' for out-of-pocket costs problem
The AMA declared it had "heavy lifting" to do in terms of reducing out-of-pocket costs for Australians.
Photo: Dr Bartone said public hospitals need new funding to improve health services. (AAP: Mick Tsikas)
And while the Morrison Government is always keen to point out bulk-billing rates are at a record high, Australians are still being slugged with $3 billion in non-hospital out-of-pocket expenses each year.
Dr Bartone told the conference "we must be honest" about the reasons why out-of-pocket costs arise, saying the conversation was not limited to the fees doctors charge.
He instead blamed the five-year freeze on the MBS rebate, which left patients paying more to offset rising practice costs.
"We must do better," he said.
"We cannot scapegoat one group and expect the problem to be resolved."
The AMA Conference runs until Sunday, and will also examine Australia's mental health system and ways to improve aged care services.
Are American businesses looking to ditch the current health insurance system?
"Universal healthcare without private insurance is a loser. Democrats pushing for it should get off that boat. Private healthcare should be seen as a life-jacket, as cost to society without a private mix would make for very rough seas."
By Trudy Lieberman August 06, 2019
(Photo by Molly Adams via Flickr/Creative Commons)
The conversation surrounding the latest drive to change America’s health insurance arrangements is different from the last one. Sure, the usual opponents are there —the U.S Chamber of Commerce, the National Association of Manufacturers, big pharma, and the American Medical Association. The media are there, too, covering this year’s conversation much as they’ve covered others — passing along spin and counter-spin — and leaving the public confused as ever.
There’s one big difference, however. A growing group of businesses, albeit small and medium-size ones, have signed on to changing how the nation’s health insurance system works. They are fed up with constant rate hikes that saddle their workers with ever-increasing deductibles and other out-of-pocket costs long before insurance pays a dime.
“If the best you can do is give your workers a $6,000 deductible and a $10,000 out of pocket maximum, you as the employer can’t feel good about that,” said Dan Wolf, CEO of Cape Air, a regional airline with about 850 employees. “We need to switch the conversation from what’s best for employers to what’s best for our citizens.”
Wolf and other small business executives are aiming to do that through a new group, now renamed Business for Medicare for All. It was started in 2017 by Richard Master, the CEO of MCS Frames, a leading supplier of picture frames and decorative mirrors, who began researching how other nations provide medical care and liked what he saw. The group is dedicated to “articulating the business and economic case” for universal health care and notes that the U.S. is the only developed country with an employer-based system and no guaranteed universal health care.
Its president, Wendell Potter, a former Cigna PR executive who also runs Tarbell, a journalistic website I’ve written for, said, “There has not been any concerted effort by advocates in the past to reach this community. We know what business is facing and we bring a new voice that speaks the language.” He told me the group has several hundred members, and the goal is to have a single business member in every Congressional district by next year, and 10,000 business owners as members by January 2021.
I’ve long believed significant change won’t happen to the U.S. health system unless it comes from the business community, a position echoed by other corporate executives working with Potter’s group.
“If we don’t get the business community behind it, it isn’t going to happen,” said David Steil, the president and CEO of Micro Trap Corp. in Bristol, Pennsylvania. Steil, who served for 16 years in the Pennsylvania legislature, says when he was a legislator, his office could solve every problem for constituents looking for services except health care. “I don’t understand why any business would want to continue providing health care.”
“We’re beyond the tipping point,” said Master who heads the group’s board of directors. “The cost of health insurance is so high, it’s becoming a challenge to overall compensation for employees,” he told me, noting that some businesses say their health care costs now amount to upwards of 40% of payroll. He believes a Medicare for all-style plan would provide relief. “The savings for our company would be half of what we are paying now,” he said. “For employees it would be enormous.”
“If the best you can do is give your workers a $6,000 deductible and a $10,000 out of pocket maximum, you as the employer can’t feel good about that,” says Dan Wolf, CEO of Cape Air. “We need to switch the conversation from what’s best for employers to what’s best for our citizens.”
Potter argues that small and medium-size businesses “understand the current system is not sustainable and not repairable, and they understand a new system would be publicly financed and privately delivered.”
Potter’s latter point is crucial, and one that has been lost or deliberately omitted in the current public discussion of a national health insurance system. The discourse so far has focused largely on the nomenclature for a new plan — what is Medicare for all; the in-the-weeds details of Bernie Sanders’ plan; the notion that Americans like their employer coverage and are loathe to give it up; and of course, that perennial bogeyman, socialized medicine.
The bogeyman did come up in my conversations with small business executives. Steil told me many business owners can’t shake the notion that a national health care system means socialized medicine. Joe Sanberg, the California co-founder of Aspiration, a mass-market financial services company, said, “Opponents have been very effective at shaping a false narrative. We should be designing a health care system for patients, not anyone else.”
Recall that socialized medicine means the government owns and operates health care facilities, employs health care professionals, and pays for the services given. No proposals I’ve seen have advanced the idea of government ownership of hospitals and physicians practices, and no one is talking about it now, a point obscured in the media cacophony.
Many foreign systems use a mix of public and private insurance, and in many countries such as Canada and Germany, provision of care is in the hands of private doctors. All citizens are covered, though, and governments use global budgets — an arrangement where a government agency determines the total amount of money available to reimburse for care for a given population — to control what the country spends on medical services. Under the current system, health care spending is approaching nearly 20% of GDP, much more than other countries spend.
Global budgeting allows policymakers to allocate resources to areas of greatest need such as mental health or long-term care instead of duplicating expensive technology and procedures such as pediatric heart surgeries, where hospitals compete for business and volume. Often the volume is insufficient for good outcomes. If a hospital has a limited pool of money in their share of the global budget, they might choose to invest in what they’re uniquely suited to do rather than compete on low-volume procedures.
When the rhetoric and false narratives are stripped away, the prospect of lower incomes and less profit is what hospitals, doctors, drug companies, and of course insurers, who make oodles of money in the current system, really fear.
Small businesses understand health insurance companies can’t control costs because the power to raise them ultimately comes from medical providers, Potter says. The doctors, hospitals, and drug companies can pretty much charge what they want, as Bob Herman of Axios has pointed out.
“Even the very biggest insurers are not able to negotiate and bring down the cost of care,” Potter said. “The only alternative businesses have is to change the benefit design to make workers pay more in higher deductibles, and they hate it.”
If the small business community is beginning to embrace a universal health insurance system, most of the business giants still prefer to stay in the insurance game. “Employers are very unhappy with increases in expenditures,” said Steve Wojcik, vice president for public policy at the National Business Group on Health, which represents 425 large employers. “They are puzzled why costs are still going up and rising faster than in other sectors in which an environment of cost discipline and cost reduction prevails.”
He told me the group’s members “recognize there is a lot of room for improvement,” especially in the area of transforming the delivery system, and he pointed to two members, General Motors and Intel, which are experimenting with direct contracting with hospital systems in areas where they have a large concentration of workers. Both companies declined to talk to me about their programs.
Wojcik said if his members had confidence a fundamental change to employer-sponsored health insurance would bring a better system, “they’d be happy to turn it over to someone else,” adding “the fear they have is where would the drive for innovation come from.” He said his members have no confidence the government can do it.
But Don Berwick, the former head of the Centers for Medicare and Medicaid Services, who also works with the new Business for Medicare for All group, told me the private sector can’t deal with the cost of care or tackle major problems like opioid addiction. It can’t form effective partnerships and shift resources in a community to address the needs of people. “We’d have better care and more responsive care in a way that a fragmented system can’t,” Berwick told me.
If big business moves out of the health insurance business, it may be that Americans who tell pollsters they are afraid to give up their employer coverage will experience large changes in their coveted coverage anyway, as employers, big and small, grapple with the uncontrolled cost of health care.
A Wall Street Journal story with an ominous headline, “Your Employee Health Plan Could Soon Look Like Your 401(k),” detailed how a new ruling from the Trump administration will allow businesses of all sizes to give employees tax-free dollars to buy an individual insurance plan rather than offer traditional group insurance. These health reimbursement accounts, or HRAs, were available until the Obama administration banned them. After 2016 they returned but only for very small businesses.
Under the new rule, businesses will be able to give their workers money to buy their own coverage through an HRA. In that way, they are similar to 401(k) plans that displaced defined benefit pension plans. Under this arrangement, workers save for their own retirement and generally choose their own investment vehicles. One result: Experts believe balances in 401(k) accounts fall far short of what workers will need in retirement.
There’s a danger HRAs could become like 401(k) plans. “They are a way of shifting the burden to workers,” Potter said. “Over time they are woefully inadequate and expose people to financial ruin if they get sick or injured.”
So far, the push for guaranteed lifetime health coverage is being spurred on by small and medium-sized businesses. How soon before big business gets on board?
Veteran health care journalist Trudy Lieberman is a contributing editor at the Center for Health Journalism Digital and a regular contributor to the Remaking Health Care column.
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