Rural and regional Australians are being treated as ‘second-class citizens’ when it comes to accessing care, says The Australia Institute.
Progressive think tank The Australia Institute recommends the Commonwealth and state governments step in to directly provide primary health services in rural and remote communities, having concluded that Medicare “is not designed for non-urban Australians”.
The new research paper formed the basis of the institute’s submission to the senate inquiry into rural, regional and remote Medicare access, and found that while more than $24 billion in Medicare benefits are spent each year in major cities, a combined $8 billion is spent in the remainder of the country.
Where city-dwellers and those living in regional hubs receive about $1200 in Medicare subsidies per year, people living in remote communities receive about $600 per year and those living in very remote communities receive about $335 per year.
These findings gel with previous analyses commissioned by the National Rural Health Alliance.
“The outcome of this system is that people in rural and remote areas are sicker for longer and die younger,” the report said.
“This is both a tragedy for the individuals involved and a highly inefficient use of public resources. People in these areas are more likely to wait until their condition becomes dire before seeking help.
“This means that when they finally do seek medical help, they often require complex, costly treatment.”
The other key finding from the report was that rural Australians subsidise private healthcare for their urban counterparts.
Less than one in 10 of all private hospitals in Australia are located in rural towns, meaning rural Australians – who are more likely to require hospitalisation at some point – must travel farther to access them.
But despite limited access to private care, the financial pressures to take out private health insurance (the report identifies these as the Lifetime Health Cover and the Medicare Levy Surcharge) is the same.
“Both of these policies assume that buying private cover provides meaningful additional access to care,” the report reads.
“This might be true in urban areas where private hospitals, specialists, and day surgeries operate alongside the public system.
“However, in many non-urban areas, these services are scarce. Residents, therefore, pay higher premiums or tax penalties for a parallel system they cannot realistically use, unless they travel long distances.”
The institute came up with four recommendations: apply a remoteness loading across all Medicare items rather than just the bulk billing incentive items, implement funding models that combine traditional fee-for-service with guaranteed base salaries, have governments directly provide primary health services in thin markets and exempt rural Australians from private health insurance surcharges.
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Because of the way Medicare is structured, the paper said, private healthcare in rural and regional areas may “inevitably lead to market failure”.
“Fully remedying this market failure may require direct government provision of primary health services through government-owned clinics, government-employed GPs and specialists, and other programs,” the report said.
“This direct provision of primary health services is unusual in Australia’s current Medicare system; however, given the extent of market failure in health services in rural and remote communities, it can easily be justified.
“This could be directly run by the Commonwealth Government or in cooperation with the States and Territories.”
This is not the first time that government involvement in primary care has been raised during the course of the parliamentary inquiry.
On Monday, senators heard from a WA rural workforce agency that around 48 local governments – as in councils and shires – were contributing to the running of their local general practice.
During the hearing, a representative from the workforce agency noted that, in some communities, universal bulk billing in only viable because it is supplemented by local government funding.
The senate committee is due to report back by November.
