Don’t walk away from the GP co-payment – fix it

Simply sailing away from the Senate iceberg is not going to solve the Prime Minister’s political and electoral problems, writes Terry Barnes, the architect of the GP co-payment proposal.

When the Titanic sank on her maiden voyage in April 1912, her designer Thomas Andrews went down with the ship. As the Titanic was about to make her final plunge, a steward saw him in the first class lounge, staring into space.

“Aren’t you going to have a try for it Mr Andrews?”, the steward asked, and got no reply. The designer had lost hope, and the urge to save himself.

If media reports about the future of the $7 co-payment on GP, pathology and radiology services are correct, it appears that the Abbott Government has decided that the co-payment package it took to the May budget could be dumped as one of the “barnacles” that needs to be removed from the Coalition ship as it is unlikely to pass a hostile Senate.

Employment Minister Eric Abetz has hinted that the GP copayment is not dead but only resting. In the interests of good politics and policy, let’s hope this is the case.

If earlier media reports are correct, Prime Minister Tony Abbott may be contemplating doing a Thomas Andrews. The difference between the two is that in this case, the co-payment ship could be abandoned even though it hasn’t yet struck the iceberg.

It’s understandable if Government hardheads want to cut their losses over the GP co-payment mess. What the Government put together is an exceedingly tough sell. Persuading Australians to accept that a previously free service (putting aside the Medicare levy) should carry a nominal charge was never going to be easy in the teeth of fierce opposition from the Australian Medical Association and almost the entire healthcare establishment, and the political view that Medicare is virtually untouchable.

But the budget package was not the simple measure I advocated, which updated what the Hawke government actually implemented back in 1991. By extending it to pathology and radiology services – however over-ordered and misused these may be – and by cutting Medicare rebates by $5 to drive GPs to charge the co-payment, the Government and its advisers tried too hard to maximise the savings for the budget bottom line ahead of making Medicare more sustainable for the long term. Linking co-payment-generated savings to the proposed Medical Research Future Fund, instead of direct reinvestment in health professionals and infrastructure, was a noble idea but hasn’t deterred the opponents.

Politically, the Government’s package is dead in the water. But since the budget, no enabling legislation has yet been introduced to be debated and voted on. The bluster and blarney of the Opposition, Greens, crossbenchers and especially Palmer United Leader Clive Palmer and his dwindling band of not-so-merry men has not been tested on the floor of the Senate.

Some will say that steering the co-payment ship away from the Senate iceberg is a prudent thing. The problem for the Government, and for future honest debate of policy in the highly sensitive health portfolio, is that to avoid a Senate confrontation on co-payments may cut the Government’s immediate losses, but helps ensure that this political iceberg will never melt.

If the Government does walk away, it will become a hell of a lot harder for it to advocate and pursue meaningful structural reform not only in health and Medicare, but in any area of electorally contentious policy. And not pursuing necessary change, even though unpopular, may reduce the Government’s short-term political pain but risk cancelling out long-term policy gain.

If they need a salutary example, the PM and his team should look to Victoria, where a fellow Coalition government could well go down this Saturday because it wasted half its term by treading water. Even former Victorian premier Jeff Kennett in Wednesday’s Herald-Sun shared his frustrations with the lack of vision and purpose of both Labor and Coalition campaigns. Whether or not Premier Denis Napthine holds on, the only reason he is still in the game is that he showed determination and purpose after taking over from Ted Baillieu in 2013. Napthine’s dire political predicament should be a message to the Abbott government that it is better to fight and risk defeat than to withdraw and never know.

People may not like the medicine a government prescribes, but they will accept it is they understand why it is needed. In the case of the GP co-payment, a big part of the political problem is that its implacable opponents and populist crossbenchers have framed the argument, not the Government.

The PM and the Coalition therefore should not ditch the co-payment principle. It is far better to recast the package, make it more palatable and then defend it to the hilt. They should then explain continually to voters why their plan balances Medicare sustainability with sending modest and affordable price signals that will not prevent Australians from seeing the doctor when they need to.

Finance Minister Matthias Cormann, in his dogged ongoing defence of an unpopular budget, has shown his colleagues what can be done, and the Government can go as far as May in pursuing legislation to meet the budget’s July 1, 2015, start date for the co-payment itself.

If a back-up plan is then defeated by a hostile Senate, Abbott can say we accept the criticism, we tried a fair and reasonable compromise, but it was rejected by our bloody-minded political opponents. Furthermore, having taken a stand for an unpopular but what they see as a necessary principle would win the PM and the Government grudging respect from a jaded electorate.

A plausible Plan B is reducing the co-payment to $5; not cut doctors’ Medicare rebates; strip it back to GP services only as per the Hawke model; and ensure the necessary safety net adequately protects people facing large numbers of visits to the doctor over a year. This is simpler and cleaner than what the budget proposed.

But whether it’s that plan or something else, the Government needs to regroup and pursue a Plan B on the GP co-payment before admitting defeat. Simply sailing away from the Senate iceberg is not going to solve the PM’s political and electoral problems. If anything, it will make an encounter with a future electoral iceberg that much more damaging.

Terry Barnes wrote the 2013 Australian Centre for Health Research proposal advocating a $6 GP co-payment. Follow him on Twitter: @TerryBarnes5. View his full profile here.