This piece was first published on 20 March 2019 in Croakey.
Neither the Report of the Ministerial Advisory Committee on Out-of-Pocket Costs (November 2018) nor any of the media commentaries I have found about it include a single reference to the words ‘rural’ or ‘transport’.
It’s a worry if we are so blind or indifferent to the realities of rural living that no consideration is made of how different out-of-pocket costs are in more remote areas, and how different the options for remediation are compared with major urban centres.
Are we surprised? The committee comprised representatives of nine specialist medical colleges and six others – and zero representatives specifically of rural and remote people.
The good, the bad and the hopeless
People with health conditions requiring a consultation with a GP, a dentist or a medical specialist can be divided into three groups: the good, the bad and the hopeless. I reckon that in major urban centres in Australia the proportions in these categories are 60:30:10. In more remote areas I reckon it’s 10:30:60. Let me explain.
In the good category are people who have a working telephone, a car of their own or a train station nearby, and sufficient financial means to phone up, make an appointment and subsequently meet it.
The bad have somewhat compromised access to the required health service for a range of reasons. Some – for technical, financial or personal reasons – have imperfect communications. Some can’t afford a babysitter or time off work, or don’t have the confidence to travel in public. Some can’t afford to pay the out-of-pocket cash costs of the consultation, many of them because they have no private health insurance.
People find themselves in the hopeless category because of the inability to pay the total cost of accessing a service, and a lack of information and poor communications systems, and logistical challenges relating to their workplace and location – and no private health insurance.
The attention being given to this matter is on costs of a particular kind and how to improve the value of private health insurance.
Bias against rural and remote people
The definition of out-of-pocket costs being used is the difference between a fee charged for a health treatment or service, and the combined Medicare and private health insurance benefits for the service. It does not include the amount the patient pays in unavoidable ‘ancillary costs’, chief among which are for transport and accommodation. The whole exercise is therefore biased against people in rural and remote areas.
Given two families of the same size and of the same financial means, in every case it will be the one that lives in a rural area that faces the higher financial hurdle in getting a service.
Rural GPs are a proud and generous lot and will try to bulk bill patients of theirs who they feel warrant it. Rates of bulk billing tend to be a bit lower in regional areas than cities, but a bit higher in very remote areas. But the generosity or compassion of an individual doctor should not be the determining factor in whether or not a patient gets medical care.
It is the rural family that will have to spend the most time away from home when they have an appointment with a specialist, necessitating family back-up for a longer period. Specialist clinics, like more specialised hospitals, still pay little heed to the logistical requirements of people who have travelled from distant areas to keep an appointment with them.
The focus of the report’s terms of reference on private health insurance was pretty unappetising for rural people anyway. About 40% of people in outer regional areas have private health insurance. in inner regional areas it’s 50% and in the major cities 61%.
Subsidies useless where private health not available
Government subsidies related to private health insurance are useless to people living in areas where private health is not available. In major cities there are about 175 separations per 1000 people from private hospitals, compared with 67 per 1000 in very remote areas .
And let’s not forget the skewed premise for private health insurance rebates in any case. The ABS’s Australian Social Trends 2010 reminded its readers that:
‘People living in the most disadvantaged areas reported much lower rates of private health insurance than those living in the least disadvantaged areas (28% compared with 75%). As the relative disadvantage of areas decreased there was a clear increase in the proportion of people who had private health insurance, rising from 43% to 50% to 61% across the three middle quintiles. This pattern is not surprising given the government policy to encourage people who can afford private health insurance to take it out.’
The recent report from the Ministerial Advisory Committee reminds us that ‘consumers can be faced with large and/or unexpected costs; this can cause financial hardship and contribute to a perception that private health insurance provides poor value for money.’ I wonder if there was talk around the table of journeys to health care appointments that began with a barge trip to the mainland followed by two legs of a plane trip to the nearest city in which the service was available.
These extra access difficulties are important. The initial presentation by a rural patient in the course of illness is often later than the standard for a patient living in a major city. This has serious clinical implications for the effectiveness of treatment and care, and thus for patient outcomes.
Answers
What are the answers? Policy remediation can be by four means:
- having private health insurance providers offer additional products designed specifically to appeal to people in rural and remote areas and to meet their circumstances – including their need to travel and the possibility of significant lost income;
- redesigning the system of incentives and penalties relating to families’ decisions about whether or not to take out private health insurance, as the current system of health insurance rebates is another transfer payment from rural to urban populations;
- redesigning the system of rebates through both private health insurance and Medicare benefits to accommodate the fact that some people have unavoidable ancillary costs of access; and
- governments continuing to make special provision for primary care health services in rural and remote areas, including through workforce training and retention programs.
The last of these is hopefully locked in for good. The other three seem to be missing in action.