19 Jun. 2007

A public-private partnership

Today I got a letter on official letterhead from Penny Shakespeare, the Assistant Secretary of the Australian Government’s Department of Health and Ageing: Private Health Insurance Branch [sic].

Dear Mr M J Beggs

You have recently registered as eligible for Medicare and under Medicare you are entitled to free treatment in a public hospital as a public patient. However, many people in Australia also choose to have private health insurance.

Private health insurance gives you more choice in relation to your healthcare - for example, the doctor who treats you, what hospital you go to and whether to be treated as a public or private patient.

Now is a good time to think about private health insurance. You can take out private health insurance at any age, but as a new migrant to Australia there is a benefit in taking it out now if you are over 30 years old….

I wrote about last week about the welfare-industrial complex, but clearly that kind of thing was pioneered in health and is now an enormous business, even in Australia with a relatively decent public health system.

Private healthcare is a cancerous growth on the health system, entirely malignant. Its proponents like to portray it as an ‘extra’ - extra choice, extra resources - but it grows at the expense of the public system because it competes with it for the most scarce resource, medical staff, and makes what it poaches available only to those who can afford it. A health system that relies on private care and insurance is - at best - regressive taxation and blatantly exclusive, not to mention inefficient.

But private healthcare gives governments a solution to a chronic problem. Healthcare costs rise faster than most prices in large part because healthcare is professional labour intensive. As with education, you can’t raise productivity without decreasing quality. Just keeping the same level of care requires an increasing amount of society’s resources. But governments find it difficult or distasteful to raise taxes and expenditure. So the system is increasingly maintained on an exclusive basis by those who have more of society’s resources to command.

Cross-posted from Scandalum Magnatum.