Now according to the ACT Consumer Law Centre more people are being forced into debt because they have to take out loans to cover rising health care costs. Mukesh Haikerwal is President of the Australian Medical Association, and he joins me this morning. Good morning Dr Haikerwal

DR HAIKERWAL: Good morning. How are you?

ROSS SOLLY: I'm well. Does this surprise you?

DR HAIKERWAL: Well the, the way the story has evolved has been that there were products out there for people with a need for cosmetic procedures and things that were not urgent, or not part of normal medical care that was necessary or essential.

ROSS SOLLY: Yeah, has it gone further than that now has it?

DR HAIKERWAL: Yeah, well if it's being used for things that should be provided by the public hospital service, or by the private health insurers through the private health service, and it's not being done, then that's a real worry, and we need to urgently look at and increase the level of capacity within the hospital sector.

ROSS SOLLY: Mm, are you hearing reports that it is for more than just your cosmetic surgery?

DR HAIKERWAL: There are concerns that people who are waiting for many years for something like a hip operation or cataract surgery or some other intervention may well be heading down this path, and that would certainly be a cause for concern.

I think that people need to have access to those important life-threatening or life-improving measures through the health service. That's what it's there for.

ROSS SOLLY: Yeah, what sort of pressure does it put on doctors, if they've got a patient who obviously needs treatment and can't afford it, but is in so much pain?

DR HAIKERWAL: Well it's obviously a significant driver, but if there's no capacity in the public sector and no capacity in the private hospital sector, you know, the financing isn't really the issue.

And I think the other concern about this particular financing product is that if people are, for instance, needing orthodontic surgery, or are needing some sort of cosmetic procedures, the driver to those sorts of interventions always has to be that it's something the patient needs, it will improve the patient's life, it has some benefit attributed to it. And it shouldn't be about the ability to gain finance for those procedures or not.

ROSS SOLLY: Yeah, I think the government has argued that with the Medicare safety net and private insurance rebate and other reimbursement programs, health care is actually more affordable now.

DR HAIKERWAL: Well, in general I think I would agree with that, because Medicare rebates give some degree of protection from costs because there is an amount the government pays. If your out-of-pocket contributions to medically needed interventions exceed the threshold, then you get safety net benefits, which is 80% of the full fee.

And so that's really underpinning it.

And of course the private health rebate is for everybody, no matter how ill they are - the 30 per cent rebate - and obviously up to 40 per cent, depending on age. So, and the (lifetime community) rating makes private insurance more affordable.

So, there is affordability. I suppose the question is, if there's no capacity, despite the affordability, that becomes the problem.

ROSS SOLLY: The ACT Consumer Law Centre is a bit concerned that doctors may be starting to act as brokers in this regard.

DR HAIKERWAL: We'd certainly have concerns about that. And there are two real moral hazards if doctors actually are acting as brokers for some of these finance services. One is the perception - which I think is probably wrong - but there is perception nonetheless that they are really trying to get money out of the system by providing these loans, and therefore the reason for the procedure is not so much the procedure need to be done, but that it's that the loan is available; and that's wrong.

And then the other side of it is that if there's any sort of fee for providing those referrals, then that would also be wrong.

ROSS SOLLY: Ethically it's wrong isn't it?

DR HAIKERWAL: Yeah, that's right. You need to have a very clear definition between the service that is provided and the financing of that. I mean people can go wherever they want for financing - they can go to the bank, the credit card, the loan shark, or indeed to some of these products. But there needs to be an arm's length from the provider of the care...

ROSS SOLLY: Yeah.

DR HAIKERWAL: ...because it almost seems like there are other drivers apart from the patient's best interest at work, and that's not right.

ROSS SOLLY: What does a doctor do though - and my guest is Dr Mukesh Haikerwal; he's President of the Australian Medical Association - maybe you might have a story to tell about this, if you've tried to get medical treatment and been forced to take loans or to get finance from elsewhere; our phone number is 1300 681 666; 1300 681 666, or you can send us an SMS on 1 99 22 66.

Dr Haikerwal, what does a doctor do though when a patient comes to him or her and says look, this hip is, is driving me crazy; I can't sleep; I know that I'm going to have an operation in, you know, two years time, but I need to do it now, and I need to get finance? What does a doctor do?

DR HAIKERWAL: It's a very difficult situation. I mean, certainly the general practitioner would face that problem regularly when the waiting lists to see the specialist to get onto the waiting list are phenomenal, depending on which location you're in.

ROSS SOLLY: Mm.

DR HAIKERWAL: And you may look for a different area to refer somebody to, or for a different hospital, a different specialist; ask for cancellations. But really, we're stuck with a lack of capacity. And in some States, essential for the rest of their life.

ROSS SOLLY: What about cases where people may be, maybe they're dealing with cancer or some other disease, and there are a lot of drugs that are on the PBS scheme, but people who are desperate - we're talking here aren't we Dr Haikerwal about some pretty desperate people sometimes, who are desperate for anything; might need access to a drug that's not on the scheme, and in that regard they're tempted to go down this path.

DR HAIKERWAL: Well that's right, and we don't want to end up with the situation in the US where you have an excellence in health services that only a very few can afford - where 50 to 60 million people are uninsured and have no health cover; and where other people are sort of relying on the State.

We have a very good balanced system, and we've really got to make sure we maintain the balance and the access.

Herceptin, to which access has been widened to include another 3,000 women with breast cancer; that was a classic example. Here was a drug that was very expensive, that was going to be of benefit to these 3,000 women who couldn't get access to it under the previous rules, and who, once it was proven that this would work for them, would reduce their need for the drug in the future and would improve their health and longevity, it was then made available.

So, you know, there are processes to make sure that we actually are getting good value and good value for money, and that we get the drugs when we need them. But sometimes there's a lag.

But at the end of the day we have to have a process; we have to make sure that we maintain access. Things like the PBS are vital, and we shouldn't be talking about cutting it all the time and trimming it back. We should be talking about maintaining it and maybe increasing it as there are more drugs available and there are more things that can be done, and more uses for those drugs.

Similarly, with medical treatment and medical access, there's no point saying the hospital's got to meet a budget. The hospital's got to meet an obligation to the community to provide services.

ROSS SOLLY: Yeah.

DR HAIKERWAL: Not enough services, not enough capacity - well, increase it. That's what you're there for. That's what taxes are there for.

ROSS SOLLY: Well we pay enough; we pay, certainly pay enough taxes towards it.

DR HAIKERWAL: Yeah, exactly. You know, the hospital's not there just to come in on budget and save money. The hospital's there to provide services to the community so the community can continue with the life that they're used to.

ROSS SOLLY: Does the AMA condone loan companies actively touting for business here, or providing this sort of service?

DR HAIKERWAL: We don't condone these sorts of businesses, and we know people will have access to all sorts of avenues of credit, whether it's the bank through a personal loan, or whether it's through increasing the mortgage or whether it's through credit cards or going to your loan shark - god forbid - or going to see, you know, some other provider of finance; and this is another option. And to some people it may well be something that they can live with.

But, you know, we don't want the US system where, if you've got an illness you've then got to go and take a loan to get better. The whole idea of our health system - whether it's Medicare, the private health sector, and the combination which is really excellent, and fair, and has reasonable access - is to make sure we don't need to go off and lose all of our savings to keep well and stable.

ROSS SOLLY: A caller says - we've just had a caller said that her friend has orthopaedic surgery this year, and she had to take out a loan for $6,000 even though she had private health insurance. And she said that even having top-level insurance sometime is not enough. You have things like gap and that sort of thing to pay.

DR HAIKERWAL: Ah, I would be very surprised if there was a gap of $6,000 on orthopaedic surgery. You know, the fees that are charged - we had a look at those actually last week, and there's nothing in that range. Now...

ROSS SOLLY: Would it, could it, is it - is it quite feasible - sorry Dr Haikerwal - it's quite feasible though because private health doesn't cover everything. You quite often are left...

DR HAIKERWAL: Well, let me see - one of the things that we've done recently is this thing called Let's Talk About Fees, talks about informed consent and financial consent. And, you know, the fee is made up of what the doctor charges, but also what the private hospital charges, because your fund may not have a relationship with that hospital, and therefore you're then paying more out of pocket for the hospital service. And then your insurer may not cover all the services in hospital like x-rays or other things. And so that all mounts up.

And what we've said is you've got to be very clear, before you actually go in for a procedure, that you know what you're up for, that you know who's going to be involved in your care, and have a ballpark figure of what to expect.

The figure of $6,000, unless the insurance is at a lowish level or intermediate or something like that, and you're taking top level care, or the hospital hasn't got an agreement; they're the sorts of reasons why the costs might blow out.

But, you know, we don't want to end up in a situation like in the States where either you've got no cover at all, or you're having to mortgage the house just to get better. That's not the way we do things in Australia. We have an excellent balance of private and public. We have good access through the private sector, with affordable insurance that is subsidised with the 30 per cent rebate, and (Medicare, which) means everybody can access health care.

But what we have got is a lack of capacity. And we've got to build that capacity. We've got to make sure we get people working in the system to keep the system afloat, and so people can get access to services when they need them.

ROSS SOLLY: Indeed. Dr Mukesh Haikerwal, thank you for your time this morning.

DR HAIKERWAL: No problem. Good morning.

ENDS