Howard government faced many health challenges in 2003

From wrestling to contain private health insurance premium increases, to throwing cash at a struggling Health Insurance Commission, the government faced many 2003 health challenges.

Senator Kay Patterson in 2003.

From wrestling to contain private health insurance premium increases, to throwing cash at a struggling Health Insurance Commission riddled with “inherent, structural problems”, the Howard government faced many challenges in the health portfolio in 2003.

Before submitting reforms for a “Fairer Medicare”, then health and ageing minister Kay Patterson in February 2003 sought cabinet agreement on a suite of measures to reduce premium increases.

Her submission focused on prostheses benefits, reinsurance arrangements and default and ­ancillary benefits, where she acknowledged there were “political sensitivities relating to the extent of premium increases”.

She conceded that while her department sought to reduce pressure for increases and spending under the 30 per cent private health insurance rebate, “it is probable that funds will continue to seek PHI premium increases above the Consumer Price Index in the foreseeable future”.

Another key issue in the health portfolio was the weak financial position of the Health Insurance Commission, when on April 15 it was acknowledged that if no action was taken, the HIC would incur a loss of $33.7m in 2003-04.

Ms Patterson put forward three options, including one whereby the government provides solvency and break-even in 2003-04 – which was the option she had preferred – or to break even from 2003-04 and over forward estimates, or finally have a full restitution from 2003-04.

The last option would mean the commission received a total revenue of $77.4m and total equity injections of $27.2m.

The cabinet ultimately agreed to give the minimum level of resources required to maintain the commission’s solvency and break-even position and order a benchmarking and costings analysis to determine appropriate funding in the future.

While efficiency measures such as closing Medicare offices were put forward, there was no support for this.

Prime Minister John Howard in 2003.

“PM&C is concerned that the underlying cause of the current problems may be due to inherent structural problems with the purchaser-provider arrangements between the Department of Health and Ageing and the HIC,” John Howard said at the time.

In the same year, the government was presented with the opportunity to sign and indicate their intention to ratify the WHO Framework Convention on Tobacco Control by the health department. The commitment was seen as a way to reinforce Australia’s “global leadership role”.

“We support recognition on the grounds it would … maintain Australia’s reputation as a global leader in tobacco-related public health initiatives,” the Department of Prime Minister and Cabinet noted.

The win in its tobacco commitment also came during a national increase in HIV infections for the first time in a decade.

Ms Patterson said while she welcomed some recommendations in various reports, there were some statements “which criticise the government’s illicit drugs policy” that she did not agree with.

“The proposed Australian government response rejects those measures and affirms there will be no change to government response on illicit drug use,” she put forward in her submission.