How You'll Be Treated In 'private' Hospitals
The Sun Herald
Saturday April 11, 1992
ONE day in July last year, in the US State of Ohio, a 27-year-old man contracted pneumonia. He urgently needed medical attention. Going to a GP was out of the question. He couldn't afford it.
At the first hospital he went to, he was asked for cash or an insurance certificate. He had neither. He was turned away. By the time he arrived at a second hospital, he was dead.
American taxpayers will not be left the bill of having to look after his widow and four young children.
The US health system failed this young family - as it has failed the country's people.
The Greiner Government's privatisation plans will import these failures to Australia. Greiner plans to boost the private sector at the expense of public hospitals. This is a direct copy of the US experience. And the Americans are only now realising the enormity of the mistakes they have made.
Health issues have become the top agenda item in the coming Presidential election. There is no ignoring front page newspaper stories, like this one, detailing needless deaths as the uninsured are turned away from hospitals.
THE US system is the most expensive in the world. The $800 billion price tag represents more than 13 per cent of Gross National Product, compared with 8pc in Australia. The US health bill is expected to blow out to $1,616 billion by the year 2000 - a huge 16pc of GNP.
In the US, 34 million citizens do not have health insurance. They simply cannot afford it. If they get sick the user-pay hospital system rejects them as a poor investment.
Corporate leaders have become vociferous in their condemnation of the current system. Lee Iacocca, of Chrysler, has been quoted as saying that health insurance costs put $US700 on the price of each new car.
"Other countries put employee health costs into their taxes. We put them into the price of our products. That's not a very healthy way to compete in the world market," said the auto boss.
If industry cannot cope, what hope for the family? Newspaper stories of people destroyed by skyrocketing premiums are legion. One Californian family found its premium soared to $US16,000 a year after a daughter was diagnosed as having a slightly incapacitated kidney.
No wonder a recent public opinion poll recorded a staggeringly low 10pc of Americans answering Yes when asked whether their health system worked.
In its pro-privatisation propaganda the Greiner Government says the push for the free market at home does not mean that NSW will be heading down the US route. It argues the key difference is America's lack of universal health insurance.
This is a deliberate attempt to mislead.
T HE simple fact of America's over-exposure to the private sector has destroyed its health system. And privatisation is the centrepiece of Liberal Party policy here in NSW and Federally.
If the conservatives had their way, patients would be squeezed between the vice of Greiner's privatisation on the one side and Hewson's dismantling of Medicare on the other.
This would mean the US system would be imported in its entirety to Australia.
Greiner has already begun the privatisation of Port Macquarie Hospital. He is bent on this course against the wishes of the local community. According to a newspaper opinion poll, 70pc were against the project. It is also against the expressed view of the Parliament.
The Opposition and the non-aligned Independents have twice successfully passed a resolution calling for an inquiry into the Port Macquarie contract.
Labor has no difficulty with the existing private sector in health. Indeed, I support short-term contracts for hospital services to reduce waiting lists and relieve equipment shortages in public hospitals.
A natural disaster is a good example: when the public sector is over-stretched, there is no argument against contracting with a private hospital to ease some of the patient load. But letting companies take over public hospitals is not on. In the first place, it does not make economic sense. Government officials have privately admitted the Port Macquarie deal, as far as the company is concerned, is "a generous one".
The Government will be paying at least $50 to $290 more for each bed every day than if it were a public hospital. It will also be paying between $2 to $4 million a year to the company for what it calls "availability of fees", which are a type of rent. This taxpayer subsidy to a private company is not acceptable.
Taken over the length of the contract-20 years-the Government will be paying at least $2 million a year more for this project than if it built and ran a new public hospital. This includes the construction and yearly operating costs.
And how will the Government resist pressure from the company for an even more generous deal, when the product is health-care, the time is the eve of an election and the location is a marginal seat?
It is no wonder this Government has kept this contract such a secret.
Privatisation is unnecessary, as well as inadvisable. The Premier says there is a backlog of health capital works in NSW amounting to $2 billion over the next 10 years. All these hospitals could be built by maintaining the present capital expenditure of $300 million a year.
Labor will increase the capital works budget with revenue from the proposed casino - about $100 million a year.
The Greiner Government has the same financial opportunity, yet it shows no sign of giving up its push to privatisation. Health facilities at Hawkesbury, Maitland, Albury, Moruya and Coffs Harbour are on Greiner's privatisation list.
The Premier has backed away from the privatisation of the maternity unit at Sutherland. The hospital is, after all, in the electorate of the Minister for Health Services Management, Mr Ron Phillips.
PERHAPS the most damaging side-effect of the rush to privatisation is the loss of public control over health planning. Government regulations covering private hospitals are weak and the Government is seeking to relax them further.
When the incentive is profit, planning is geared to the dollar not the quality of service nor to medical need. Looking at the US experience is a valuable exercise.
As a direct result of lack of public accountability, US hospitals in the 70s and 80s went on a massive spending spree on whizz-bang medical technology. Hospital companies invested in the departments with the highest return, such as coronary care units. The less glamorous disciplines, such as maternity care and casualty units, missed out.
But the investment didn't pay. US hospitals are now funded from debt and financiers have almost as much say as administrators in the running of the hospitals.
The market is invading the American GP's practice. A growing number have started investing in profit-making services such as diagnostic laboratories. There is nothing wrong with that. The problem is they often refer their patients to services they own.
These facts cannot be dismissed as being a peculiarly American phenomenon. Privatisation here would see the same developments. Privatisation necessarily means control by the market. And in health care that means investment in the high-tech disciplines, at the expense of the "people-focused" areas.
It means planning geared to profit, not patient care, and over-exposure to debt. What would happen to your local hospital if the company went bankrupt?
There is no argument that market forces should influence your groceries. But your hospital is not a supermarket.
How many people just diagnosed with a brain tumour will research the death rate of their local hospitals? The infection rate? The bed-day cost? Each surgeon's waiting list? And even if they wanted to, where would they get that information?
There is a large imbalance between doctors and patients regarding their knowledge of health. An unfettered market cannot work with this imbalance. It has not worked in the US and will not work in Australia.
© 1992 The Sun Herald