HEALTH ECONOMICS

Health Econ. 14: 869–870 (2005)

Published online in Wiley InterScience (www.interscience.wiley.com).

BOOK REVIEW

Book ReviewThe Politics of Medicare: Who Gets What, When andHow by gwendolyn gray. UNSW Press, Australia,2004. No. of pages: 111. ISBN 0-86840-703-8.

Australian Medicare stands for a universal, tax financedsystem of health care that provides free treatment inpublic hospitals, subsidised fee for service medicine, andprescription drugs at small co-payments. Although thereis no provision to opt out of Medicare cover, 43% ofAustralians are buying private health insurance (for adescription of the carrots and sticks policy on insurancesee Hall et al. [1]. Hall and Savage [2]). The first attemptat universal tax financed health care, Medibank (1975–1976), was dismantled by a Liberal (conservative)Government who continued to oppose Medicare,established in 1984, in favour of voluntary privateinsurance until 1996 when they won the election.However, along with support of Medicare came a seriesof pro-private sector initiatives. How did this happen inan electorate where Medicare has been a major issue atevery election in the last 30 years?Gray describes a perpetual struggle – with the Liberal

Party and the provider groups on one side, and theLabor Party and the people on the other. The book waswritten in the lead-up to the 2004 election. Using thecontext of that time, one chapter is given to bulk-billing;the term Australians use to describe what in many othercountries is called direct billing. It is popular withpatients as the consultation is free at the point ofdelivery; doctors are forbidden to charge any additionalfee. By the end of 2003, GP bulkbilling had fallen to65% of attendances from rates of almost 80% in 1995–1998. Both political parties, the media and consumergroups saw this as a crisis in general practice (for moreon this issue see work by Jones and Savage [3]).Gray’s analysis of political differences is a conflict of

vested interests that is firmly based in the opposingideologies on which each Party was founded. Thus, thefall in bulkbilling she takes to be a symptom ofthe erosion of the foundations of Medicare. The logicof this argument escapes me; bulkbilling was around50% GP attendances when Medicare was establishedand did not reach 75% until the mid-1990s yet no onethought Medicare was being undermined then. Herposition is that the current health system cannotwork, and that it fails the people by delivering benefitsto the few. And she musters various arguments whichsupport this, including the usual critique of US healthcare.

The book was written for a general audience, aimingto inform those who want to evaluate health debates.The description of alternative approaches to financing isrudimentary, but this is not aimed at economists andpolicy makers. There is little recourse to data, andextensive use of selective quotations rather than analysisof argument and counter-argument. So Australians’high use of hospital services is referenced to a newspaperarticle rather than OECD data, and based on acomparison with the US and Canada against which wedo seem high, rather than all OECD countries where wefall in around the average.Since this book was published, there has been another

Federal election (a resounding Liberal win) and anotherFederal Budget (Maynard and Hall give more on this[4]). Rising co-payments have been countered with a newsafety net. Once over the limit of $700 ($300 for lowincome groups) yearly out-of-pocket expenditure onmedical bills, the Government reimburses 80% ofadditional medical bills. Yes, 80% of what the doctorbilled with no constraint on the amount that could bebilled. The Health Minister, Tony Abbott, made this a‘cast-iron’ promise. Costs have been much higher thaninitially predicted, $1b over the four year forecast ofexpenditure. This has more to do with specialistsincreasing fee levels, than general practice where bulk-billing is now up to 74% and co-payments seem steady.So the commitment has been watered down with anincrease in the thresholds to $1000 (and $500 for lowincome groups).But this reneging on a cast iron promise has saved the

budget $100m per year. At a time when there is ahistorically high budget surplus and there are tax cuts allround. All of this has been played out against leadershiptensions with the Treasurer (and would-be PrimeMinister) increasingly impatient while incumbent PrimeMinster Howard shows no inclination to retire. Mean-while, other potential aspirants are rising, including thecurrent Health Minister. It is often said that thosewhom the Liberal Party wishes to destroy, they makeHealth Minister! So there’s a lot more to be written inthis story.

References1. Hall J, de Abreu Lorenco R, Viney R. Carrots and

sticks – the fall and fall of private health insurance inAustralia. Health Econ 1999; 8: 8.

Copyright # 2005 John Wiley & Sons, Ltd.

2. Hall J, Savage E. The role of the private sector in theAustralian health care system. In The Public–PrivateMix for Health, Maynard A (ed.). Nuffield Trust,Radcliffe Publishing: Oxford, UK, 2005.

3. Jones G, Savage E, Hall J. Pricing of generalpractice in Australia: some recent proposals toreform. J Health Serv Res Policy 2004; 9(Suppl 2):63–68.Savage E, Jones G. An analysis of the GeneralPractice Access Scheme on GP incomes, bulk billingand consumer co-payments. Aust Econ Rev 2004; 37:31–40.

4. Hall J, Maynard A. Health care lessons fromAustralia: what can Michael Howard learn fromJohn Howard? Br Med J 2005; 330(7487): 357–359.Hall J. Election 2004: paying for health care. AustRev Public Affairs 2004; http://www.econ.usyd.edu.au/drawingboard/digest/0409/hall.html

Jane Hall

Director, Center of Health EconomicsResearch and Evaluation,

Sydney, Australia

DOI: 10.1002/hec.1017

Copyright # 2005 John Wiley & Sons, Ltd. Health Econ. 14: 869–870 (2005)

Book Review870