In May 1996 the Hon Dr. Michael Wooldridge, the new Australian Minister of Health addressed the AMA describing his plans to reform health care using competitive marketplace principles. Dr. Weedon, the president of the AMA introduced Wooldridge and in doing so expressed his strong reservations about what was proposed. Weedon has written other articles critical of economic rationalism.
It gives me great pleasure to welcome you to this meeting today. I'd like to start off by making a few introductory remarks. For those of you who are not familiar with the AMA's rules and regulations, the President can talk whenever he or she wishes, and we're working under AMA rules of debate today.
I will just make some opening remarks and in doing so, I'd like to make it clear, don't be swept away by the emotive zeal which is characterising the debate about competition policy. Please consider the social consequences at what is happening. Do not forget that this is going to effect people and it is already affecting people. Do not forget that the street is littered with failed economic models. Models, not fact, not theory, not things that live up to the same proof that is required in science, in general. I think we tend to forget that economic models are just that.
I always become worried when a debate is one sided and it becomes filled with zeal, almost a religious fervour.
I'd say from the outset that I'm not frightened of competition personally. There aren't too many cars on the road when I go to work at 4.30 in the morning. So I'll assume that there won't be too many problems for me in this regard.
Now competition is sold by lowering prices and increasing productivity, improving efficiency. But we should analyse the mechanisms involved.
How does it actually lower the price of a hamburger or a cake of soap or a motor car. Firstly, you have to reduce staff. You have to get rid of middle-management, as Telstra and Grace Bros are showing and you put them on the scrapheap. You call it down-sizing, you call it increasing efficiency, but you're actually getting rid of people. You make those who remain work harder and you increase their stress levels, but that doesn't matter, because when they go off on stress leave, they come under WorkCover or under State Government and they're not a Commonwealth government responsibility.
While you're getting these people to work harder, you're getting the other people who can't work, or you have no jobs. It seems to me to be a strange set of rules. You get reduced profits for those people who have actually put up the money in the first place. You skimp on quality, you pay lower wages. That's the only way you can bring about a reduction in price, it's the only way that competition will work.
I say competition is great if you have the upper hand already. Competition is great if you don't think of the mechanisms and social consequences of it. Competition appears good if you're not actually competing yourself. If you've got a paid position, if you've got a tenured academic position, competition looks great.
I believe it is a sign of our intellectual and moral bankruptcy as a society that we can only concentrate on growth, on competition and on greed. When are we going to concentrate on the social fabric of our society? Personally, I'd rather pay 10 or 20 cents more for a cake of soap to live in a society where people have the opportunity to work, where governments contributed to an orderly and structured society and where economic theories were regarded as just that - theories.
CLICK HERE --- to read Dr. Wooldridge's speech
AMA Summit Proceedings :::: Competition in
Health: "A Brave New World"
A 1 Day National Information Briefing on The Trade Practices Act & Competition in Health
Friday 10 May 1996
Dr. Peter C Arnold, the chairman of the Federal Council of the AMA published an article in the Medical Journal of Australia 4 months later in which he explained in some detail what the consequences of this policy would be and why. I quote from this article.
"The government should not assume the professions resolute adherence to ethics in the face of economic loss." ----- "Such competition is lethal for standards; it is not in the public interest. It is this message that the medical profession must clearly convey to patients." ------ "With the price of services as the sole determinant of health care, ethics will fail and standards will fall. Governments will establish standards bureaucracies, despite inadequate methods for assessing quality. Money will be diverted from patient care to the ever increasing bureaucracies, while professionalism declines."
Dr. Peter C Arnold, Chairman, Federal Council, AMA (MJA 2/9/96 page 272)
Government introduced its policies in 1996. In 1999 we had the Scan scam and then the Riverside scandal in aged care. The care of patients in public hospitals and prisoners in the countries goals have been lumped with electricity and contracted to private "providers". Both have been surrounded by controversies and failures. If the US Health System is a guide to the future then we can expect much more.