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Rebate restoration will be a shot in the arm for public health

Rebate restoration will be a shot in the arm for public health

As the vote-vying continues in the lead up to the federal election, Tasmanians will no doubt hear politicians declare just how important healthcare is, and how committed they are to fixing burgeoning wait times.

They should bear in mind that about 10,000 of those Tasmanians are currently stuck on stagnant public hospital elective surgery waiting lists. Many of them will be living with pain. Many will be faced with a reduced quality of life as they continue to wait.

Those patients would be right to wonder why, despite so many promises from successive governments to fix the public health system in Tasmania. Elective surgery waiting lists continue to climb, and health outcomes are poorer compared with other states. This is only set to worsen as we face an aging population with increasingly complex health needs.

This election represents a golden opportunity for all parties to make a health policy decision that would not only drive down waiting lists, but also provide more timely access to health care for every single Tasmanian.

The policy is simple: restore the means-tested private health insurance rebate.

The rebate was initially introduced to cover 30 per cent of the cost of a private health policy. It puts private health within the means of more people, thereby freeing up space for others in the public system. This rebate has not kept step with increasing health service costs, meaning it now covers less than 25 per cent of the cost of a policy for low and middle-income earners.

Restoring the rebate to 30 per cent is the most effective way the Australian Government can help provide surgery and hospital access to all Tasmanians, not just those with private health insurance.

It isn’t well recognised, but Tasmania’s public hospital system relies on a healthy and robust private health system. For every person who can access private health care, more resources are available to treat people in the public system. Conversely, every person forced to leave their private health insurer becomes another person who the public system must find the room, staff and funding to care for. Restoring the rebate can stop it.

While a five per cent erosion of a means-tested rebate may not sound large, in pure dollar terms, it represents $23 million disappearing from the pockets of Tasmanian policy holders every single year.

The next Federal Government needs to step in during its first term to ensure people’s ability to take up and maintain private health cover – and stay out of the public system – is maximised. More private demand will also incentivise more investment into new private hospitals and clinics, increasing capacity further.

This has become more critical than ever as the state continues to battle the impacts of COVID-19, which are far from over.

Just last week the Royal Hobart Hospital was forced to again reduce elective surgery to help manage COVID-19 pressures. A few weeks ago, the pandemic paused elective surgery at every public hospital in the state.

Of the more than 10,000 Tasmanians parked on public hospital surgical waiting lists in January, more than 1,000 of these were classed as category one patients. If you are unlucky enough to be a less-urgent category three patient on a list at either the Launceston General Hospital or the North-West Regional Hospital, you will wait about a year for your surgery.

Tasmanians are rightly worried about the ability of the public system to provide the healthcare they need. The ongoing struggles of the public health system, exacerbated by COVID, has seen increased investment in private health insurance: more than one in two Tasmanians now hold a policy.

Governments must start seeing the health system as a single entity – not merely as a distinct and separate private and public system. It is a point in fact that two out of every three elective surgery procedures in Australia are done in the private system. The systems are critically linked; it is critical that people have every encouragement to remain in the private health system to provide a better access balance for the community.

Cost of living pressures are making this more difficult to achieve. Tasmanians are currently feeling the sting of rapidly increasing property and rental prices, and rising fuel prices both at the bowser and on shop shelves as producers pass on added costs to consumers. This looms as a difficult decision for Tasmanians to make in balancing the need for timely access to health care with other concerns in the family budget. The Federal Government can assist Tasmanians in not having to choose one over the other.

It is time for the Australian Government to act and restore the private health insurance rebate, for the good of every Tasmanian.

Paul Lupo is the CEO of St.LukesHealth – Tasmania’s leading not-for-profit health insurer.