Taking the health industry by way of example, let us consider
more closely the dogma proposed by way of mitigation for
privately funded enterprises.
Direct billing, or "bulk billing" as it is becoming to be known, is that practice
where medical practioners accept as payment in full the State's scheduled rebate
for their services, i.e. no additional charges are made despite the scheduled rebate
being often only a percentage of the medical practitioners' Schedule fees, and bill
the State's public health administration directly. Under this system the patient
bears no "out of pocket" expenses and those who defend this practice often consider
it one of the cornerstones of egalitarian society.
Where available, direct billing has lately dropped to all time lows of late, a
phenomena that co-incides with levels of presentation to general practioners in
general. Circumstantial evidence admittedly and being that as it may, that
people are becoming less concerned with the health of their families borders on
fantastic and i for one am prepared to link declining visits to health
practitioners with rising fears for the associated costs ...
Too poor to afford food and clothes for their children if they
waste money on their own health, citizens least able to afford
to do so are coerced to await a severity of their condition
such that they may present themselves to the publicly funded
emergency services. The cost of such practices represent to
us all greatly raised levels of stress for all concerned,
and all that entails, eg productivity, and the public health system's
resources are strained to such insufficient levels as to increase
the number of people turned away.
Levels of GP presentation bear a direct relationship to levels
of bulk-billing. As these levels drop, that is in fear of the
financial implications of having their condition treated,
those who can least afford it are forced more frequently to
await more severe stages of illness in order to attend
emergency services. Greater costs overall, greater strain
to the public health system and ultimately more people turned
away due to insufficient resources to cover everything.
With none of the dis-integrating costs associated with
the private health insurance industries (such as
premiums collection, advertising and individual
billings), public health administration bears relatively
reduced overall costs when it comes to procesing the claims of
individual patients. The monitoring of health care
providers and patients alike in terms of propriety and
appropriate levels and patterns of health service are
vastly improved under State/public ventured funding.
Uncertainty as to the overlap of responsibilities shared by
varying levels and agency of government and providers of
health insurance and health services creates an environment
where providing the best health care, i.e. the ends, become
subservient to such means as exercises in transfer of
responsibility of payment to other payers.
Universal access to public hospitals, that is, without such
disintegrating effects as means testing and charging,
definitively reduce hospital administration costs.
As a proportion of expenditure, the administrative costs
of private health funds average to about four times those
their state/public ventured counterparts.
The conclusion of international experts in their field is
that use of public funds to service public service provisions
is substantially more efficient than use of those same funds
to subsidise private services.
That private hospitals relieve public hospitals
The leaking of funds to medical gap payments, 'ancilliary' benefits,
administrative and all other disintegrating costs associated with
private health industries saps all but a fraction of the monies
earmarked for private hospitals
and only a fraction of this fraction is employed by private
hospitals on the kind of services that offset demand for those
of public hospitals,
so private health insurance certainly has little effect on
public health in this capacity.
Private hospital practices tend to be more costly than their
equivalents (including those of efficiency, where such comparisons
can be made) in public
hospitals. Rather than relieving, private hospitals drain
funds that could be spent better in public hospitals.
Also worthy of consideration in this context are that
many states have (rarely used) instruments in place to facilitate
contracting private hospitals to care for public patients; and
significant numbers of people patronise private hospitals without
private health insurance.
Admittedly these are not arguments against private health
insurance and nor are they intended to be. Rather, they serve
to highlight the disingenuity of arguments to the effect that
private hospitals prop up public hospitals and private hospitals
depend upon private health insurance.
More to the point, any rise in private health care subsidies must
need be consistantly applied to training
for the best part of a generation before even starting to have
an effect on those scarcest and costliest of health care resources,
nurses and medical practitioners. When it does, the proportion
that is channelled into private health care represents a related
proportion of health care professionals qualifying and choosing
to enter the private health care industry, representing an effective
transfer of health care resources from the public to private health
care sectors. This is the kind of relief most public health care
systems could afford to forgo.
That private health industries reduce the tax burden
I commend as first consideration the very concept of "tax
burden". Enough said. Per hap.
Losses intrinsic to the dis-integrated nature of private health
insurance are such that what remains of these monies to be
spent on actual health care is small enough as to be comparable
to the health insurance subsidies spent propping the system up.
An huge popularity for minor tax increases for the betterment
of public ventures, and in particular public health care, has
been demonstrated in various surveys accross wide demographics.
The achievements of private health care and related industries'
dis-integrated efforts could be effected mostly by completely
scrapping private health insurance subsidies and rechanneling
them into State/public funded health instruments. The difference
could be addressed by a small and politically acceptable rise
in a state's health care levy, need it be addressed at all.
That competition is good for the health insurance industry
Where regulations effectively discourage health professionals
from advertising their prices, restrict their numbers and limit intakes
to specialist colleges, such fragmentation affords these suppliers the
ability to play insurers off against one onother and the more the
merrier with respect to extending beyond reasonable servicing and
A single strong insurer has the "market power" to restrain health
professionals from succumbing to such excesses. To channel public
expenditure into centralised health care funding is to achieve
exactly what is argued as the benefits of competition.
The market itself obligingly demonstrates these principles.
For countries with good health care outcomes, (predominantly high
income countries), health care expenditure as a proportion of their
GDP is significantly related to another proportion, that of public
funding to the same expenditure. The less it is publicly funded,
the more a country pays for its health care overall.
Where the disintegrating practices of private health insurance
"industry" is so extreme as to prohibit cost control so entirely as
to give price of health inflation a life of its own, the "sellers
market" effected reduces the state to a weak purchaser capable of
buying little for the same proportion of GDP when compared to states
investing more strongly through public funding for their health care
That publicly funded health instruments are administratively wastefull
The private health insurance "industry" must bear (translate that
however you will) costs not suffered by public funded methods:
promotion, duplication of services (e.g. collection and point of
sale) and any of the costs one tends to associate with private
enterprise not applicable to publicly funded enterprises.
Those monies lost to the
disintegrating practices required to prop up privately funded health
monies not spent improving the better health care service provided
by public funded health insurance practices.
the situation is understood it is a great pity, but perpetuated in
the knowledge of what is truly going on, it amounts to little more
than deliberately throwing money away. (Or is it? Per hap we need
more closely scrutinise the Political gains afforded by such
channelling of funds.)
The dogmatic expression employed by defenders of private health
insurance to describe this erosion of funds is "administrative
waste", except they use it to describe the outcomes
of publicly funded enterprise, and it is peoples' unthinking
acceptance of this expression such dogmatists rely on, for were
they to attempt to defend such argument, they would inevitably dig
themselves an huge hole indeed.
That private health industries provide ensure insurance equity
The choice to not pay for private health insurance is for many
a decision bourne by financial hardship more often than by any
health related or political concerns. Where a state decides to
those forced into such "choices" they often do so to those who
can ill afford such penalties and all things being relative,
who choose not to share their health care with the community are
rewarded handsomely. In this scenario, a most attractive
difference exists between health insurance premiums and their
associated tax rewards, for the wealthy that is. It is a double
edged sword indeed, no such rewards for the poor who in effect
pay the rich to take out private health insurance. Where any
rewards are expressed as a proportion of health insurance
premiums, the transfer of funds to the wealthy from the poor
is changed only in magnitude. Granting rebates to those rich
enough to be able to afford "ancilliary" services merely
adds injury to insult.
Irony's cup runneth over; for those sufficiently wealthy
and prudent to avoid gap and excess payments, private health
insurance provides a usefull tool for restoring tax
losses, where it's usefullness decidedly ends and is not nearly
so effective in the theatre of it's allegedly intended function.
For actual health care and associated funding, the
state public health instruments still serve their purpose well,
despite their potential being leeched by private health
That states need spend more on pharmeceuticals to contribute to
pharmeceutical research and development
The top 10 pharmeceutical companies spend 150% of their R&D budgets
on marketing their products to health service providers and patrons
and the trend
is for a greater proportion of their total budgets, with rises in
expenditure for marketing:R&D being 4:1. In reality, the peoples
of the world are being coerced into paying more for marketing, that
is, to contribute to the extra-ordinary profits of the pharmaceutical
industry and their associated executives' salaries world wide.
That states need spend more on pharmaceuticals to help create new
Intellectual property rights "protect" a developer's access to profits
from the work they have established. Like many rights, these exist more
in letter than spirit, that is, motive and ability to exploit loopholes
abound. The profitible characteristics of pharmaceutical products can
usually be replicated in similair products, differing only enough to be
legally separate from the fruits of others' research and hence not
represent an infringement of property rights when they provide a
ticket to the gravy train. This still takes a bit of R&D but rarely
involves much by the
way of risk, which may go some way to explain an investment of more
than thrice that in actual innovation being poured into finding new
variations on existing products.
The real R&D, which is quite risky in as much as it
costs a lot of time and money, is being done by the worlds publicly
funded intitutes, such as universities, from who the pharmaceutical
companies will purchase the ideas and invest resources into clinical
trials once the real work has allready been done.
When it comes to
health issues involving mainly less developed countries or where
relatively few patients effected, i.e. less profitable, then forget it.
If there is any
responsiblity for contributions to such research, then surely it is to the
public funded research institutes such monies should be directed, for the
good of public health. Then, if there's any left over, and for some
reason you still want to help pharmaceutical companies make their fortune,
(which you just might if you want to retain political power), then funding
the pharmaceutical companies' tickets to the gravy train should be
To pay what a pharmaceutical is therapeutically worth is a rather radical
stance on the world stage. Australia seemed to have got it right, but
considering recent developments with their relationship with those United
States, and the increasing contributions pharmeceutical companies are making
towards election campaigns, the longevity of this approach is on shaky
That private health industries provide states with greater choice
There is a wealth of data available to draw upon
to refute this claim and a comprehensive rebuttal would
demand more in time than actual energy expended and yet this is
still probably the easiest claim to counter. All you
need do is open your eyes to the sovereignty surrendered
by states and their citizens caught in the
thrall of "free trade" (an expression reminiscient of
"holy roman empire") to see that when states relinquish
their control to the corporate sector, choice is one of
the first casualties.
There's room for an entire thesis here and while many of us can
sort through the wheat and the chaff easily enough there's still
good work to be done highlighting such injustices and worthwhile
alternatives. If you have any such aspirations please make a point
of it - we will gladly host your work.
For now, the
next time you hear any of these dogmatic arguments rehearsed as
shorthand for theoretically established and acceptable facts,
take their proponent to task, get them to explain what they
mean and see how far they get. A longer term and arguably more
rewarding goal would be to help them to understand the truth.
Australia: Defend and Extend Medicare News
Medicare fact sheet 4
Paper for Health Insurance Summit, Sydney, 12-13 June 2003
Ian McAuley, University of Canberra
Public Health Association of Australia - Talking Points
Illustrate the long term investment into nurse and physician
training required for any appreciable effect.
Illustrate the disintegrating effects of "free trade" upon
world's states' sovereignty
2004-03-23: First drafted.
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