If you had a problem that required an operation and the doctor
offered a procedure with a 90 per cent success rate or one with a 10 per
cent failure rate, which would you pick? Most people say they prefer
the one with the high success rate but, of course, they're equally
risky. Point is, we can react quite differently to the same information
depending on how it has been "framed", as the psychologists say.
When
politicians engage in "spin" they're framing a problem or a solution in
a way they hope will maximise the public's sympathy, a way that
highlights those aspects the pollies want to draw attention to and draws
attention away from aspects they don't want us to think about.
As
Tony Abbott and Joe Hockey soften us up for an especially tough budget
in May, we'll be subjected to much spin. Already the idea of imposing a
$6 patient co-payment on GP visits has been floated, to which federal
Health Minister Peter Dutton added the comment that the growth in the
cost of Medicare was "unsustainable".
Spending on healthcare is
highly germane to Treasury's projections that, if no changes are made to
policies, the federal budget is likely to stay in annual deficit for
the next 10, even 40 years.
But let me frame the projected growth
in spending on healthcare in a way you won't hear from the pollies. It's
a safe prediction that the real incomes of workers and households will
continue growing by a per cent or two each year in the coming 10 or 40
years, just as they have in the past 40.
So, as each year passes
our incomes will grow a little faster than the prices we're paying for
the things we buy, leaving us to decide how to spend that extra "real"
income. Every income earner and family will make their own decisions,
but our past behaviour gives us a fair idea of what we'll decide.
We
won't be devoting our additional real income to spending more on food,
clothing and other basics. Their share of our total spending is likely
to continue falling. We will be spending a higher proportion of our
incomes on housing - hopefully on better-quality housing rather than
just keeping up with rising prices - and on improvements in household
electronics such as television, home computers and the like. We'll
probably spend more on educating ourselves and our children.
And
it's a safe bet we'll want to spend more on healthcare. It's hardly
surprising that, as we become more prosperous, we're prepared to devote a
higher share of our income to staving off death and ensuring those
extra years are as free from pain and disability as possible.
Can
you think of a higher priority? And the good news is that medical
science is forever coming up with better pills and prosthetics, as well
as better and less invasive surgery. The bad news is that the new stuff
is invariably much more expensive than the technology it replaces.
And,
as surgeons get better at doing particular operations, they're able to
perform them on a wider range of patients, particularly the elderly.
After
I started suffering angina about the time of the Sydney Olympics, and
ended up having open-heart surgery, my GP told me that until this
operation was developed, all the medicos could have done was give me
pills that didn't work. I would just have had to keep tottering about
until a heart attack carried me off. By now I'd be long dead.
If
healthcare was something we bought in the marketplace, like most things
we buy, that would be the end of the story. We'd go on spending a
growing proportion of our increasing real incomes on healthcare and
there isn't an economist or politician in the country who would see a
problem.
In fact, most of the nation's spending on healthcare is
done by governments, federal and state. Public hospitals are "free",
visits to doctors are subsidised by the federal government and
pharmaceuticals - and chemists - are subsidised by the feds.
We do it
this way because, like people in almost every rich country, we believe
healthcare shouldn't be denied to those who can't afford it. That's
fine. But doing it this way introduces a host of additional problems:
scope for greater inefficiency in the delivery of care, ideological
responses from those who believe government spending is wasteful and
excessive by definition and cognitive dissonance by all those punters
who want ever more healthcare available to them, but don't want to pay
more tax to cover the cost.
We know from successive Treasury
studies that the ever-rising cost of healthcare - caused not so much by
the ageing of the population as by the ever-rising cost of advances in
medical technology - is by far the greatest reason for the projected
increase in budget deficits. It's rarely made clear, however, that all
these studies assume a limit on the growth in taxation.
Contrary
to politicians' framing of the matter, the growing cost of healthcare is
sustainable for the simple reason the electorate's demands leave them
with no choice but to sustain it. What's unsustainable is the
politicians' pretence that taxes won't have to rise.
