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An unhealthy approach to health

By David Leyonhjelm - posted Tuesday, 26 August 2014


Popular thinking about the role of government is all over the place. Nothing exemplifies the muddle more than the widespread support for massively increased government spending on medical research, and the noisy opposition to the proposed reduction in Medicare rebates to doctors.

Everyone supports medical research. What's not to love? But that fact is the very reason governments shouldn't fund it. People give freely and generously to medical research charities every day. They direct their money to the fields of research they care most about. They give when they know where the money is going. And they give to organisations that they trust.

According to research by the National Australia Bank, nearly a third of Australian tax-deductible donations last year went to cancer charities (like the National Breast Cancer Foundation), health and disability charities (like Diabetes Australia) and medical research charities (like the Heart Research Institute). This suggests that Australians freely donate more than $700 million dollars to these organisations every year.

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The proposed Medical Research Future Fund aims to add a billion dollars to annual government funding of medical research in a decade's time. But as government funding for good causes goes up, private donations go down. One study estimates that for every $100 of government funding, private donations fall by $73.

We should not ask the government to do what we can do ourselves. It robs us of our direct connection with those we want to help and makes politicians believe they are angels when being generous with other people's money. It also generates public sector jobs in which bureaucrats serve as unnecessary middlemen rather than working in the private or not-for-profit sectors where they could add real value to people's lives.

It is no secret that the Government's Medical Research Future Fund was supposed to be a Trojan horse that would allow the Government to sneak in a reduction in Medicare rebates. But a reduction in Medicare rebates is not something the Government should be ashamed of, or something that could be snuck in anyway.

A reduction in Medicare rebates, and the associated increase in the prices doctors will charge patients, is good policy. The Government should be proud of it and ought to directly argue in support.

We pay mechanics to service and fix our cars, and we pay tradespeople to maintain and repair our homes. This arrangement works. Many mechanics and tradespeople compete for our custom by developing a reputation for good work, honesty, and good value. Those that don't, risk going out of business.

Our bodies are more valuable than our cars and homes, and the services provided by doctors, based on at least a decade of training, are more valuable than the services of mechanics and tradespeople. As such, there is no more important place to encourage good work, honesty and good value than the doctor's surgery.

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Various arguments are made to oppose the introduction of charges for a visit to the doctor. Rather than hide behind the Medical Research Future Fund, the Government should rebut each of them.

It is said the introduction of charges will hurt the poor and chronically ill. But there is a generous cap; concessional patients and children under 16 years will only have to pay $7 for the first 10 services each calendar year, a total of $70. Opposing the Government's proposal in its entirety will only maintain a situation where the well-off and healthy receive the same level of medical support as the poor and chronically ill, a level that is inadequate for those most in need.

It is said the introduction of charges will discourage people from visiting the doctor. But some visits to the doctor should be discouraged. We cannot afford to waste the limited and valuable services of our doctors on consultations that are more social than medical. Over-servicing can worsen health outcomes.

And the mindset that good health hinges on the services of doctors rather than exercise, nutrition, sleep, social networks and low stress is a harmful mindset of dependency that free consultations only serve to reinforce.

In an ideal world we would shop for health services based on quality and price, protected from unaffordable costs by insurance. The government's role would be limited to ensuring that the poor and chronically ill are insured, and collecting and publishing information about the providers to help us make better choices.

In that world the most needy would receive all the support they required, and private support for medical research would not be discouraged.

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This article was first published in the Australian Financial Review.



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About the Author

David Leyonhjelm is the Liberal Democrat Senator for NSW.

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