Is anyone else dumbfounded by the current dispute between the Federal Department of Health and the ophthalmologists?

Personally, I can’t decide who is being sillier. In this specific case the ophthalmologists have threatened to withdraw their services from the public system, and particularly from those rural and remote areas with the lowest levels of existing services unless the government backs off from its proposed cut to their Medicare rebate for performing cataract surgery.

Since the same professional groups also control the number of eye surgeons available in Australia, and just like all the other doctors training groups they create very high barriers for entry of overseas-trained doctors, the government (and the public) has no real choice.

If they walk out of the public system, your grandmother won’t be having essential eye surgery any time soon. Sadly, this grubby industrial tactic has a long history in Australian medicine (remember the surgeons walking out of public hospitals in the mid-1980s).

Let’s just consider that there are three critical perspectives in play.

The first is that of the Rudd government. It keeps telling us that it is serious about health reform, but keeps letting the department come up with these minor issues instead (see the recent public relations disaster that surrounded proposed changes to the reimbursement of IVF services).

The second is that of Australian specialist doctors, particularly those who perform financially rewarding procedures under the lucrative fee-for-service system. Presumably, all Australian procedural specialists see this kind of threat to cut rebates as the “thin edge of the wedge”. Consequently, they are likely to resist collectively any substantive change.

The third is that of the Australian public. Of course, their real health needs are quickly put aside in the middle of such a fundamental stand-off between government and doctors.

As we all know (because we see it regularly on the TV news) the Rudd government is in the middle of its rather hospital-centric consultation on national health reform.

During this sensitive period, you would think that the minister would be avoiding any unnecessary skirmish with a specialist doctors group until she was ready for the main game. (Of course, we are all assuming that there really is a main game to be played out sometime between 2010 and 2013.)

Perhaps, however, if this were the season for real health reform, then the government might think that this was a great time for a big dispute with a group of procedural specialists, particularly when they are clearly holding us all to ransom.

It has certainly caused me to wonder whether there is there anyone old enough in the PM’s or the health minister’s office to recall the pilots’ strike of 1989? Remember when that old unionist, Bob Hawke, decided to take on the closed shop of Australian pilots (remember when only Australian pilots could make you safe in Australian skies?).

If we now had a government committed to real health reform, then now would be a great time for a workplace reform minister (e.g. Julia Gillard) or someone with real union credibility (e.g. Greg Combet) to take on the toughest closed shop in Australian industry (i.e. the procedural specialists).

Interestingly, while the Hawke government did go on to break the stranglehold the pilots had over Australian skies, it never did break up the monopoly Australian doctors exercise over health services in this country (In 2009, it is still the case that only Australian-recognised doctors can provide safe health care.).

This fundamental and persisting failure in economic reform underpins much of the dysfunction in our health system today.

As long as there is a gross under-supply of specialists, no real competition between the existing providers, big financial rewards for those who perform procedures and an unwillingness to think about big changes to the way governments reimburse doctors services, the general public will remain the big losers (i.e. you pay more for the services you do get, you have less access to the services you need, particularly if you can’t afford private health insurance and nobody develops the really serious health programs for chronic diseases that the system doesn’t provide).

Any real alternative (i.e. Medicare Select or competitive national social insurance schemes) has fast disappeared from the agenda.

The government likes to talk tough about health reform, but as previous governments (and some private companies) have found, if you have no real strategy for breaking up the control that specialist doctors have over the supply of services, and no alternative funding mechanisms to fee-for-service on the table, then its chances of real success are slight.

Ian Hickie is a psychiatrist and executive director of the Brain and Mind Research Institute at the University of Sydney