PM's sincerely busy faking it
Michael Costello
The Australian, 2 May 2003

John Howard, with his Medicare reform package, is well on the way to achieving a goal he has supported for more than a quarter of a century: the destruction of Medicare.

The Howard who returned to the Liberal leadership in 1995 was very different to the "Honest John", "tell it like it is even if it is politically disadvantageous to me", overtly ideological Howard of the 1970s and '80s.

No more of that for him. Politics reigned supreme. Pragmatism was his watchword. He gave a series of speeches dumping the political baggage of his past. He took to heart the words of French dramatist and diplomat Jean Giraudoux: "The secret of success is sincerity. Once you can fake that you've got it made."

And fake it he did. No more problems with Asian immigration. No more union bashing or cutting wages. No more GST ­ never ever. He faked it well enough to roll through the 1996 election.

Since then he has continued always to put politics and pragmatism first. In the middle of 2001, when he was in deep political trouble, he dumped a whole series of policies he had said he was wedded to and began to spend like a drunken sailor.

It helped him politically, but not enough to win. He needed the combination of the Tampa asylum-seeker stand-off and the New York World Trade Centre attacks to do that ­ but it did help him, and he did it unabashedly.

However, to really understand Howard you have to realise he has never given up on his hardline ideology. He has succeeded in his tilt away from Asia. He has implemented his GST courtesy of Meg Lees's Australian Democrats. He has implemented tough industrial relations legislation courtesy of Cheryl Kernot's Democrats.

And, more subtly, he has implemented other changes through the technique of starving public institutions of funds and when, inevitably, they start to falter, by claiming they are fundamentally flawed and that the private sector must take over. The former Commonwealth Employment Service is one example, which is now outsourced to the private sector. Education, particularly higher education, is slowly but surely being pushed towards the private sector.

Now it's the turn of health.

What did the '70s and '80s Howard have to say about Medicare? That is was a "miserable cruel fraud", a "scandal", a "total and complete failure", a "quagmire", a "total disaster", a "financial monster" and a "human nightmare". He would "pull Medicare right apart" and "get rid of the bulk-billing system", which was an "absolute rort". He said he was going to confine bulk-billing to pensioners and to the disadvantaged, with doctors free to charge whatever fees they chose. Sound familiar? He said only pensioners and the disadvantaged should be entitled to free hospital care.

What did the new, 1995 Howard have to say? "We are going to keep Medicare lock, stock and barrel" and "unequivocally retain bulk-billing". Sincerity oozed from every pore.

Now it's Medicare's turn to go the way of other fake undertakings from 1995. Medicare, both in the form of support for bulk-billing and health funds for the states, has been starved of cash. At the same time a huge $2.3 billion annual subsidy has been given to the private health system through the health insurance funds.

As a consequence, the public health system is under tremendous pressure. Howard, having deliberately created the problem, says ­ sincerely, of course ­ that it needs to be reformed. But his reforms are, in fact, designed to hasten the decline of public health services. Here's how.

First, the reduction in the real value of the Medicare rebate has made bulk-billing, the cornerstone of Medicare, less and less acceptable to doctors. This will not change under the reforms. This is no accident but deliberate government policy. There is no more effective way to reduce bulk-billing than this.

Second, one of the attractions of bulk-billing is its relative administrative simplicity for doctors. Under the new proposal, it will be just as administratively simple for doctors to charge more than the scheduled fee ­ another strike against bulk-billing.

Third, by allowing gap insurance for amounts higher than $1000, there will be substantial inflationary pressure on doctors' fees, and where specialists are involved $1000 a year is easily exceeded.

Fourth, the new payment system for non-bulk-billed patients is more convenient for patients but will also make opaque the $25 rebate part of the cost. It will be much easier for doctors to appear to raise their fees from only $10 to $15, say, than from $35 to $40.

Fifth, if the declared incentives in Howard's plan work, then eventually only one-third of Australians will be bulk-billed. That is the end of Medicare and cost containment.

Opposition health spokesman Stephen Smith has already struck some shrewd blows, notably that in future forget your Medicare card ­ you'll need your credit card.

All in all, the changes are classic Howard. He is destroying Medicare, but in a politically cautious and pragmatic way, denying with all that wonderful sincerity of which he is capable that he's doing any such thing. How proud Giraudoux would be of him.

Michael Costello, former secretary of the Department of Foreign Affairs and Trade and Department of Industrial Relations, was chief-of-staff to former Opposition leader Kim Beazley.

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