Doctors’ fees after freeze

Press, 21 January 1984, Page 14

Doctors’ fees after freeze

If the freeze on incomes and prices is to have a lasting restraint on the rate of inflation, it has to be treated as something more than a temporary interruption to the systems of wage and price increases that applied before June, 1982. The levels of incomes and prices when the thaw begins on March 1 should, ideally, be treated as a new base line against which future increases can be tested and justified. Many people in the community — probably the majority — believe they have some unsatisfied grievance brought about either by the freeze itself, or by the timing of its imposition. Where real hardship has been caused, such grievances might be worth considering. Otherwise, they would be best ignored and left to cancel each other out. After all, if all the increases in incomes and prices that people believe they should have had were applied, these, too, would cancel each other out. Few would be better off. Inflation would have another boost.

Among the more startling increases so far proposed is the statement from the New Zealand Medical Association that an increase of 22.5 per cent in general practitioners’ fees would be justified. Doctors’ fees used to be adjusted between June and September each year in the light of their accounts for the year to the previous March. Because of the timing of the freeze, only a few doctors had raised fees in June, 1982, to take account of the high inflation in the previous year. If doctors alone had been caught by the timing of the freeze, some sympathy might be had for their plight. As it is, very many people were stopped from making or seeking what they regarded as fair increases in charges or incomes.

Most industrial organisations for instance, used to go to collective bargaining in the latter part of the year. Most wage increases that might have been sought on the ground of inflation in the months before June, 1982, were blocked by the freeze. If professional fees, for doctors or other groups, are allowed to catch up what is said to have been lost because of the freeze on incomes, everyone else will have a strengthened case for substantial claims. Taken to its logical conclusion, such a policy would mean that all wages and prices must leap forward in 1984 as though the freeze had never been. No-one would be better off. Doctors, like many other people, have had to absorb increases in their costs caused by increased prices for imports during the freeze. Almost everyone might claim that a degree of catching up is justified — something of the order of 5 per cent, perhaps. The cost in New Zealand of imported drugs and medical

equipment has been rising, and the rules can be used to take care of these rises. Important costs — rent and labour — have been frozen. They may increase after February 29, and such increases will undoubtedly be passed on to patients in due course. The essence of the matter raised by the medical profession, but not by the profession alone, is whether it is acceptable to achieve all the increases in prices that were forbidden while the freeze lasted. One of the results of the freeze, and a painful result for some, is that adjustments have been made to real incomes, and to bear with some higher costs, during the period of the freeze. If all these adjustments are to be repaired, the freeze might as well not have been borne at all.