Private Health Insurance gets a foothold in primary care.
Imagine the following scenario. You are checking in with your GP’s receptionist for your scheduled appointment and are asked to produce your Medicare Card and, if you have one, your private health insurance membership card. If you have both you move into the waiting room on the right reserved for patients with private health insurance for whom the practice will provide a range of additional services not available to those in the waiting room on the left. Health outcomes are resource dependent so patients who can expect more quality time with their doctor and a range of services from other health professionals because private health dollars make it possible will, in many cases, have better outcomes. This is particularly likely if they are troubled by chronic and complex conditions. In such circumstances it’s also not hard to imagine practices over time, deciding to accept only patients with private insurance, as is commonplace in the US.
Unlikely scenarios for Australia? I hope so but certainly don’t know so and recent developments convince me that both health professionals and consumers need to be pro-active in making it clear to our politicians that such discrimination would be totally unacceptable. There is already much in our health system that is unfair and expensive. Unfair in that increasingly timely access to quality care is often determined by personal financial wellbeing rather than need, and expensive in that inferior care to socio-economically less privileged Australians results in much chronic disease that eventually costs the taxpayer dearly. As we struggle to reverse that situation we have, for the first time, an Australian government encouraging private health insurers (PHIs) to become involved in our primary care space. Four of the successful tenders for the operation of the 31 new Primary Health Networks (PHNs) will utilise consortia involving for profit and not for profit private health insurers.
Labor’s “Medicare locals’ have morphed into the Coalition’s Primary Health Networks. The health minister has explained that this new initiative will see PHN’s co-ordinating care offered by local hospitals districts (of which there are more than 150 in Australia) and local GPs. The networks are not to provide health services directly but use their 900 million dollars to “improve front line services”. Currently private health insurers are not allowed to offer additional insurance for any services funded by Medicare. However there is every chance that Insurers involvement in PHNs, which will include input into GP training, and workforce planning, could be the start of an ever-larger role for private insurance in primary care. At the time of the PHN announcement a spokesman for the peak body for insurers, “Private Health Care Australia”, said, “the best way to improve Australia’s health system is to increase the role it (PHI) plays in GP care”.
While the new initiative is unlikely to be any more successful than its predecessor given the vagueness of the terms if reference and the small number of networks covering a huge country yet asked to act locally, the conflict of interest that is inherent in having PHIs involved is very real. PHIs primarily exist to benefit their members, by and large better off Australians while PHNs to be successful must target better services for less advantaged Australians.
Global experience tells us that these networks should indeed be subdivided to become locally relevant and offer model Integrated Primary Care and secondary services. They should play a “hub” role for affiliated practices helping with IT, documenting health outcomes, continuing education, bulk purchasing, in house drug education, research etc. etc. About as different from what is on offer as is possible to imagine.
Why are PHIs so keen to get involved in Primary Care? While business models involving large numbers of Australians buying primary care insurance may be attractive the main reason for PHIs interest in primary care is their need to have fewer members admitted to hospital. This is particularly important for those admitted frequently as a result of advanced disease. Our larger PHIs tell us that 5-10% of their members who are frequently admitted to hospital generate 50 -60 % of their costs. Better-resourced primary and community care for these members might reduce admissions and save them large amounts of money. The political and public relations dilemma is easy to understand. How can they provide their member’s primary care team with the needed resources without creating a two-tiered system?
Of course the exact same problem, though on a much larger scale is troubling, or perhaps more accurately, should be troubling Australia’s national insurer. As has often been discussed in these blogs it is public hospital care and associated costs that are consuming most of our health care dollars, not Medicare. With our State/Federal divide in health care responsibilities it is State budgets that are in the same boat as the PHIs, ever increasing numbers of older and sicker patients requiring hospitalisation. A number of studies have found that as many as 600,000 admissions to public hospitals could be avoided annually if our primary carers were resourced to offer better community care.
We hospital doctors know only too well that many of the patients who return to hospital frequently have such advanced disease that little can be done in the community to manage their recurring crises . We certainly know that many such patients will die in hospital when a better death with more dignity at much less expense is not available at home. But the real challenge is to develop a primary care system that reduces the tsunami of Australians who are at risk of developing Chronic and Complex conditions and do so.
Is there a role for PHI in the creation of such a system? Certainly PHIs can and often do help their members with resources to improve their health literacy and their understanding of how they can best help themselves to manage their problems. Many in the private health industry are enthusiastic about the “Medical Home” model of care that I, and others, have described enthusiastically in detail herein the following link. http://johnmenadue.com/blog/?p=3192 Some insurers have expressed interest in funding “proof of concept” practices resourced to offer the Integrated Primary Care (IPC) that is at the heart of the Medical Home model. There is proof from many countries that this model does very significantly reduce hospital admissions. Our federal government should be even more interested in this model as the majority of hospital admissions involve people without private health insurance. Canberra not the PHIs should be establishing Medical Home practices to demonstrate the benefits of the model in Australia. Some in the private health insurance industry have called on government to join them in supplying our primary care system with resources that emphasise prevention, early diagnosis and management of potentially chronic problems and care in the community for many currently sent to hospital. It is hard however to envisage a mechanism for such cooperation.
International experience warns us of the many problems associated with a mix of public and privately funded primary care. We do not want insurers (be the private or public) interfering with decisions about treatment programs for individual patients. We do not want a two-tiered system. On balance we should be urging government to maintain the current restrictions on PHI supplementing Medicare funded services. In so saying we should immediately add that Medicare does need a major structural overhaul to become a funder of a primary health care system not a fee payer for doctors.
The health minister has indeed just announced a review of many aspects of Medicare. The review will be led by two good people, Dean Bruce Robinson from Sydney University and Dr Steve Hambleton a former head of the AMA. The minister’s statements suggest that she feels that our current model of primary care would be fine if over servicing, rorting doctors and low value test and procedures were contained. The reviews will take 18 months and to encourage GPs to participate the current freeze on cost of living adjustments to Medicare rebates will remain until efficiencies are providing extra dollars. No talk of PHI involvement and no talk of Integrated Primary Care!
In reality we don’t need more reviews asking, “what should we do?” but rather a health care reform commission to drive changes (“how do we do it?) that are evidence based providing us with a cost sustainable and fairer health system detailed in these columns on any number of occasions.. The result would be a generation of healthier Australians with government and PHIs spending far less on expensive hospital care. A real “win, win” situation.
John Dwyer is Emeritus Professor of Medicine at UNSW.