Top Official Defends Health Reforms
Sydney Morning Herald
Saturday February 19, 1994
The Federal Department of Health's most senior bureaucrat, Mr Tony Cole, took the unusual step yesterday of publicly defending the planned reform of private health insurance by the Minister for Health, Senator Richardson.
Mr Cole, the secretary of Treasury before he became secretary of the Department of Human Services and Health last year, vigorously attacked the basis of arguments by the Australian Medical Association (AMA) against Senator Richardson's discussion paper.
"The basis of the AMA's response to Senator Richardson's discussion paper is an assertion that his proposals amount to American-style managed care," Mr Cole said.
"Having constructed this straw man, the (AMA) paper then attacks all its perceived shortcomings."
The Reform of Private Health Insurance discussion paper, approved in principle by the Cabinet after protracted debate late last year, is being reviewed by a joint Caucus-ACTU working party.
The reforms involve industry restructuring and the introduction of a radical scheme under which insurance firms would strike deals with private hospitals and doctors so that patients received one bill, fully covered by their policies.
Mr Cole, speaking at a Canberra conference organised by the AMA, ridiculed the doctors' line of attack, saying it was a cheap shot to compare the proposals to the American health system.
The controversy has centred on claims by the AMA that the proposals will result in a decline in the quality of health care and Senator Richardson's counter-claim that doctors are concerned only about protecting incomes.
Mr Cole said: "Of course, the US system is a pretty scary one if you want to find a bogyman ... Bogymen drawn from the USA are not going to be very relevant to this Australian health system."
His spirited defence of Senator Richardson's discussion paper was in stark contrast to the rest of the speakers who, with the sole exception of the insurance industry, rejected the package.
Mr Cole insisted that the claim by the president of the AMA, Dr Brendan Nelson, that the doctor-patient relationship would be destroyed under the proposals was also a "straw man".
"I note that the AMA discussion paper uses the term 'patient sovereignty'. I must say those patients who write to my department complaining about doctors' charges do not feel like sovereigns. They feel more like helpless pawns in the system."
In keeping with his reputation as an economic "dry", Mr Cole said it would not necessarily be a bad thing if patients were discharged more quickly from private hospitals under the new contractual system.
"We all know that quicker does not necessarily mean sicker ... Efficiency is not simply an economic imperative. If a health system is not efficient, access will suffer," he said.
"I personally believe there is scope in the health system for significant productivity gains of the order of those being achieved elsewhere in the economy."
Dr Nelson later defended his depiction of the proposals as an American-style policy, saying the payment mechanism proposed was based on a US model and "opened the way for managed care".
The Democrats' health spokeswoman, Senator Meg Lees, said the proposals were "bad health and bad politics" and accused Senator Richardson of a hidden agenda.
She later predicted that the package would fail to win the support of the Labor Caucus and the Parliament.
The president of the Australian Private Hospitals' Association, Mr Dennis Hogg, said premiums would rise by 13 per cent and contracting with doctors would be "an impossible task".
The director of the Australian Catholic Health Care Association, Mr Francis Sullivan, labelled the proposals the "Brave New World" of rationalist health policy.
© 1994 Sydney Morning Herald
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