Turnbull recently announced that his government, if re-elected, will not change any element of Medicare. It came in response to Labor’s campaigning that Medicare was under threat, that it would be privatised under a Liberal government. The general media response was to take Turnbull at his word and that Labor’s continuing use of the campaign was no more than a ‘scare campaign’ now based on a ‘lie’. But let’s take a closer look, including a careful examination of the words he first used.
First we need to understand Medicare. Although we associate Medicare with medical services, it actually does not deliver a single such service. In essence, it is no different to private health funds insofar as it provides cover for the costs when people purchase medical services — or as it is sometimes described, a ‘universal health insurance scheme’ and we pay the Medicare levy as our insurance policy payment. Of course, it has ‘bulk billing’ which allows that medical services, if provided at a cost stipulated by Medicare, can be provided at no cost to the ‘consumer’. It is basically a payment system. The government controls policy and sets the ‘prices’ it will pay for services and also determines what services are included in the Medicare benefits schedule (which is the other work of Medicare staff, advising on those prices and services). There have been policy decisions over the years that provided additional funding (‘incentives’) to service providers, such as pathology and diagnostic imaging, if they bulk billed.
So it is similar to government provision of pensions. Government sets the policies but provides only a payment and no direct service. By way of comparison, think about the Bureau of Meteorology or the Australian Bureau of Statistics: government again controls policy but its funding of those bodies is for the direct provision of a service.
Back in February it was revealed that a task force had been established within the public service to examine the Medicare payment system
, including the ‘commercial possibilities’. The government described this, however, as only the ‘back office operations’ of Medicare. From the description of Medicare, you will see that the payment system is not a ‘back office operation’ but is the core business of Medicare.
The proposed change was described as:
… part of our commitment to ensuring the government embraces innovation and is agile and responsive to changes in the digital economy.
No doubt you will recognise the words ‘innovation’ and ‘agile’ and their obviously intended link to Turnbull’s previously announced national innovation agenda. The implication being that we should support the proposed changes to Medicare as part of a much broader agenda in the national interest.
Any outsourcing would only apply to back office operations and the administrative actions of making payments to individuals and providers. It doesn’t include setting fees or rebates and it doesn’t have any impact on the cost of health care, other than it may result in services being delivered more efficiently.
The latter are Turnbull’s words in parliament and remember this was only four months ago. He wasn’t denying it then.
Labor attacked then and continued the attack that the Liberal government did not support Medicare. It had plenty of ammunition including the continued freeze of Medicare rebates (now continuing until 30 June 2020) and the cessation of incentive payments for bulk billing to pathology and diagnostic imaging services. For the election, Turnbull announced that stopping the incentive payments had been put off for six months, will be reviewed, and that rents for pathologists will be reduced. How he can achieve the rent reduction is a vexed question — surely a Liberal government would not wish to interfere in the market in that way! All Turnbull has done is remove it temporarily while the election takes place. He has not said it is off the table permanently.
Labor’s attack was obviously gaining traction in the electorate forcing Turnbull to come out and say
It will never, ever be sold. Every element of Medicare services that is being delivered by government today, will be delivered by government in the future. Full stop.
Apparently this was a ‘captain’s call’ by Turnbull but still Labor wasn’t convinced.
And I had to ask myself why did he spell out ‘every element of Medicare services that is being delivered by government’. As far as I can glean the only services not delivered by Medicare, but associated with it, are some registries of diseases kept by non-profit organisations in the medical sector. Or did he mean that payments are not a ‘service’? Or when he referred to ‘government’ was he limiting it to the ministers in his cabinet who govern the country? — in that case, what the government ‘delivers’ is the policy of Medicare. He was so specific in his statement that it hints at obfuscation.
Also he claims that these services ‘will be delivered by the government in the future’. What does that clause actually mean? It doesn’t preclude the possibility that payments could be contracted out: that is still a ‘government service’ but it has simply asked someone else to do it. Consistent with Turnbull’s statement it is not ‘selling’ the provision of Medicare payments, merely hiring someone else to undertake the task. Remember he is a trained lawyer and understands the use of words.
Subsequently Turnbull had to clarify his meaning and spelled out that payments would not be outsourced and upgrading of the payment system would take place 'within government'. The fact he was forced to do so emphasises that his opening explanations were less than clear but more importantly not convincing the electorate.
As Labor initially continued the attack, despite the denial, Turnbull said that Labor was ‘peddling an extraordinary lie, so audacious it defies belief’. Surely it shouldn’t defy belief within the Liberal party: after all they used a similar tactic regarding Gillard’s words about a carbon tax.
Turnbull also made a point of saying that the issue had not gone before cabinet
and, therefore, there was no government decision. However, when Labor made an FoI request on the issue it was denied a number of documents because they involved ‘briefing the minister on a submission which is proposed to be submitted to cabinet’. Clearly the public servants had been preparing briefs and submissions on the issue: that doesn’t happen without someone in cabinet knowing about it and such submissions to cabinet are coordinated by Turnbull’s own Department of Prime Minister and Cabinet. So Turnbull’s nit-picking that the issue did not go to cabinet was a little disingenuous.
Although the task force seems no longer to be operating, Labor also points to a Productivity Commission report requested by Treasurer Scott Morrison
… to review all aspects of human services delivered by government, including community services, social housing, prisons, disability services and Medicare.
The terms of reference include examining ‘private sector providers and overseas examples like the United States’ for alternative service delivery models.
One could ask why the United States is specifically picked out as an overseas example. If the government wished only to improve efficiency but retain services within government, it could have listed a few European countries as examples for study. No, looking to America, with its heavy emphasis on the private sector, is clearly indicating the model the government wants.
I still question Turnbull's stronger dismissal of Labor's argument. If payments by the Department of Human Services are outsourced on an American model, it would become logical in the future to also outsource Medicare payments — we already see Centrelink and Medicare in the same shopfronts and it would make sense for staff to have access to the same payment system on their computer screens. Would such an approach still be 'within government'? — it could, simply by fully moving the Medicare payments system to the Department of Human Services.
Whatever else may be said, Labor achieved its purpose and forced Medicare to front and centre of the election debate. For a while it moved discussion onto its favoured ground forcing the Liberals to respond with border security and turning back boats and revealing information they normally claim is a secret operational matter. Yes, when it comes to an election operational secrecy no longer matters!
Turnbull, as are many politicians, is a trained lawyer and knows how to choose his words carefully. He knows how to avoid outright lies but also how to avoid the truth. He knows how to say only what he wants to say and avoid adding any flourish that may reveal more than he wishes. The fact he was forced to change his words does imply that he was less than truthful in his initial statements or, at the least, was attempting to keep his options open. And perhaps even his stronger denial still has an element of keeping his options open but I leave that for you to think about.