In a 2003 analysis for Medibank Ian Harper generated a fantastic graphic. I hadn’t seen it before this week but it should be widely distributed.
The effect of these policies on the take-up of private health insurance has been mixed—although the proportion of the population with private health cover ceased its historic decline and then rose dramatically following the introduction of the 30 per cent PHI rebate and lifetime community rating. By comparison, public expenditure on hospital treatment has risen more or less consistently in real terms since the mid 1980s but levelled off markedly soon after the introduction of the 30 per cent rebate in 1999 (see Figure 1).
If someone has read the paper, can they state if that is that just fed spending on public hospitals, or total spend?
rcon
19 Feb 12 at 9:31 am
Sinclair Davidson
19 Feb 12 at 9:34 am
Cheers, Sinc.
Didn’t want to make the mistake Lab and the Greens do when discussing public school funding of only counting one level of cash income
rcon
19 Feb 12 at 10:10 am
Typical ALP, it gets rid of things that actually save the public money and increase the things that cause the public to spend more money. It does it because of it’s collectivist, state power ideology. No wonder we are borrowing so much.
John Comnenus
19 Feb 12 at 10:14 am
I used to think that was a whacky Liberal party conspiracy theory John.
Rudd however proved it to be true. He made it difficult for philanthropy to exist.
There is no rational explanation for why he decided to to do this, it did not impact tax revenues in any significant way.
The ALP have lost their core values, mission, base, purpose and their only goal now is to create more and more Government departments and sap the strength of competitive industries.
They need to lose badly and rebuild.
I for one am disgusted and alarmed that PHI went down to 30%.
As long as the same system remains, PHI should be deductible against the TFT, Medicare levy and MLS rather than rebate.
.
19 Feb 12 at 10:22 am
Though with the additional tax if you don’t take out PHI, its opportunity cost is low or zero for many people, so abolishing the 30% rebate should produce significant net savings.
Andrew Norton
19 Feb 12 at 10:41 am
Good graph… but blue and purple? Not best graph colours for colour-blind.
Fleeced
19 Feb 12 at 11:22 am
The other aspect of this is that to control costs this public system is one of a truly massive truly thuggish administration.
Each major city teaching hosppital has a ceo – invariably non-medical – who is paid between $500,000 and $1 million and an army of 5-10 divisional leaders – usu non medical – on $250,000 and $400,000.
Heads of departments – medical/nursing professionals – are on similar levels of remuneration.
Visiting medical specialists are on $110/hour usually for 9 -18 hours/week which propably doesn’t even cover the costs of their rooms during that time. None in the major cities these days are paid fee per service
A major hospital costs $1 billion to build and fit out.
A public hospital has generally become a miserable place to work.
In short, it’s a perverted system with quite bizzare perverse incentives and when it starts breaking down, it may well implode.
The last thing they need is for the ratio of the phi
population to decrease again as it did under the last Hawke-Keating ALP government.
JamesK
19 Feb 12 at 11:24 am
Andrew – it is likely to be more complicated than that. The PHI companies effectively have all clients with incomes over a certain level locked in. There will be less pressure therefore to restrain premiums. This may lead to those on lower incomes to drop out of PHI and fall back on the public hospital system.
Should the higher income earners be the better risks on average – and this is likely to be the case given that earning very high incomes is not consistent with having a chronic disease or significant health problem or being older – the PHI companies could do very well out of this new arrangement.
And the taxpayer could be up for the higher rebate for those who stay in PHI and bear the costs of those on lower incomes who drop out because of the higher premiums. Ironically, the government may just have introduced a form of risk rating into PHI!!
Hard to see this as thought out reform.
Judith Sloan
19 Feb 12 at 11:58 am
I’ve got my thoughts up again at Menzies House. I still need to flesh out my argument as to why vouchers won’t be any better at stopping the government picking up costs in near end of life senerios. Maybe in the next version.
http://www.menzieshouse.com.au/2012/02/medicare-hecs-.html
TerjeP
19 Feb 12 at 12:05 pm
O Great Catallaxy…
using 2002 data to assess 2012 policy.
MaryT
19 Feb 12 at 12:32 pm
It is time series data, you moron.
.
19 Feb 12 at 2:21 pm
Sinc, I am doubtful about the accuracy of that chart, especially the plateau in public hospital expenditure. Ian Harper is not specific about the source of the data, giving it only as AIHW. Looking at AIHW publications suggests a different story. For example, check Table 4.2 in this publication Health expenditure Australia 2008-09
Mother Hubbard's Dog
19 Feb 12 at 2:55 pm
And that won’t be fixed by reinstating the rebate.
ar
19 Feb 12 at 4:58 pm
ALP needs to lose badly and disappear into the ass end of history
Irving J
19 Feb 12 at 6:35 pm
That table doesn’t overlap much.
Sinclair Davidson
19 Feb 12 at 6:58 pm
But it does overlap the period where Harper suggests a plateau occurred, and fails to show it …
Mother Hubbard's Dog
19 Feb 12 at 7:13 pm
Plateau relative to years not in table with a different base year. You can’t tell anything from the subsequent table without the previous years.
Sinclair Davidson
19 Feb 12 at 7:15 pm
Don’t follow your argument Sinc. If expenditure plateaus in real terms on one base, it would plateau in real terms on any other base.
Mother Hubbard's Dog
19 Feb 12 at 7:18 pm
All you can say is the expenditure has risen, without the previous data you can’t see the plateau, if any. And the base has changes so the numbers that do overlao aren’t the same.
Sinclair Davidson
19 Feb 12 at 7:21 pm
I get that. But the plateau from 1988-89 to 2001-02 should still appear in the newer table, regardless of the base.
Might be worth contacting Harper to find out where he did get the data from.
Mother Hubbard's Dog
19 Feb 12 at 7:24 pm
you are missing ten years of data.
On your Marx
19 Feb 12 at 7:46 pm
This seems to be a bedrock of our socialist medicine system, even for the Coalition.
But the effect is to subsidise bad health behaviours, and penalise (or, at best, fail to reward) good health behaviours.
So smokers, who self-inflict a wide range of health problems, are charged the same premium as non-smokers who have made a choice to avoid such problems.
And abusers of substances whether prescription or not, legal or not, are also charged the same premiums as non-abusers (including teetotalers, careful drivers and so on).
What happened to user-pays principles?
John A
19 Feb 12 at 11:09 pm
John
It does not follow that someone with a bad lifestyle will have higher medical costs. I am a smoker and a drinker and I am more likely to just drop dead from heart attack etc. rather than survive in my later years (if I don’t change my ways) so if I do just drop dead I very cheap. Also it is not practical to study every persons behaviour check they eat their veges, don’t have many sexual partners, exercise and are not obese.
kelly liddle
19 Feb 12 at 11:30 pm
Kelly, individual illustrations are not necessarily indicative of the overall picture – there are anomalies everywhere.
But as to the broader lifestyle choices we make, general insurers have been assessing behaviour patterns and charging premiums accordingly for a long time: witness higher property insurance or loss of coverage if you leave your house unlocked, higher premiums for high-risk drivers. And in the life assurance field, certain lifestyle behaviours are already assessed and premium increased to recognise the risk.
My question is, why is health insurance SO different from life assurance that we hold community rating to be such a sacred cow?
John A
20 Feb 12 at 7:50 am