Monday, July 4, 2016
Some thoughts on the Medicare scare campaign
Australia has a socialised medical system (called Medicare) that by most objective measures works well. Health outcomes are good. Health expenditure as a percentage of GDP is not outrageous (but is on the high end of the non-USA OECD).
Medicare it is very popular.
Indeed if you polled conservative voters in Australia they would resoundingly vote for socialised medicine.
Medicare has been so well run and is so accepted that it has become a sacred cow in Australia. A politician who even tinkers with it takes considerable risk.
That said, it does not work perfectly.
Many years ago when I was a public servant the then Labor Government introduced a copayment for pharmaceuticals for pensioners. Up until then pensioners could get their scripts filled for free. After that there was a very small (two dollar) copayment introduced.
The then government had an estimate how much money this would save. And they were wrong. It saved more, much more.
It turns out that there were a surprising number of elderly women (and they were mostly women) whose idea of a social life was to go to a different doctor every day, get a different script filled every day and go to a different pharmacist. After all those young doctors really are handsome men.
Adding a trivial copayment drastically reduced these behaviors. It saved money and improved heath outcomes.
To get more rational use of healthcare you did not need to hit these people with the full marginal cost of their services. Just a little bit of market did most the work that market does.
And the lesson was learned, socialised medicine works better with just a little bit of market in it - just to make sure the incentives are lined up. Its a lesson I have held ever since.
I disliked the Abbott (conservative) government in Australia a great deal. But they did try to introduce a general copayment (five dollars) for visiting a doctor in Australia. It was howled down in political protest. Like a lot of Abbott policies it was a bit ham-fisted. The welfare effects could have been ameliorated by introducing for example a maximum number of copayments. But none of that was tried.
Most importantly the government did not sell the policy well. The discussion above was not part of the discourse.
And it also gave the (conservative) government in Australia a reputation for tinkering with Medicare. That reputation for tinkering came back to haunt them.
We just had an election on the weekend. The conservatives were not beaten - but the swing against them and to minor (sometimes extremist) parties was strong.
One element of that result was a the scare campaign about Medicare. That is a great pity because there really are tweaks around the edges that will make it work better.
Some of those involve small copayments. But others are very left-field. For example teaching elderly people to use Facebook and smart-phones probably saves Medicare money. People are just less lonely with Facebook.
I don't know how we have a bipartisan debate on this stuff in Australia. A "Medicare taskforce" requires "scare quotes".
But I think it is also a good idea. Indeed demographic trends for socialised medicine are not pretty - and this sort of tinkering might be necessary to protect the system.
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