JOHN MENADUE. Health Reform Priorities

Health costs are rising through greater use of technology, ageing, lack of coordination and waste. Doctors provide too many services. Mental , Indigenous and dental health have serious problems. Services are being delivered less equitably. Progress has been made particularly in prevention. 

We need reform, broadly in priority order below.

  1. Primary care – the key reform area. Australia has an obsession with hospitals. They should be the last resort rather than the first. Countries such as the UK and NZ have high quality care in part because of the philosophy underlying their healthcare, but also because they are grounded in primary care which is the most efficient and equitable way to deliver health services. It is where care is best integrated. Fee for service has encouraged ‘turnstile medicine’, excessive treatment and increasingly the corporatisation of general practice. The government should pursue possible contractual arrangements with general practice as an alternative to fee-for-service.
  2. Co-payments. They are a mess, with the level of government subsidies varying enormously. Medical and pharmaceutical co-payments have little in common. The safety nets are unfair and lead to abuse. Persons on high incomes should pay more for health services through efficient and defensible co-payments. A ‘universal service’ does not necessarily mean it should be free. Subject to a means test, there needs to be more discipline by consumers in their use of health services. Most importantly out of pocket costs need to be reformed to ensure equity and efficiency.
  3. Workforce reform. Health is the largest and fastest growing sector of the Australian economy. Its structure and workforce are riddled with 19th Century demarcations and restrictive work practices, e.g. there are several hundred nurse practitioners in Australia when there should be thousands. We must also train assistant physicians. About 10% of normal births in Australia are delivered by midwives. In NZ it is over 90%. We don’t have a shortage of doctors so much as a misallocation of doctors. As taxpayers we fund the training of doctors. We subsidise 80% of their income through Medicare and then issue  new provider numbers for them to practice in areas that are already over supplied. That is absurd.Nurses, allied health workers and ambulance staff are denied opportunities to upgrade and realise their professional potential. Pharmacies should be providing more basic medical services for the community rather than continuing to focus on being shopkeepers rather than professionals. There will never be adequate delivery of service to people, particularly the aged, without radical workforce reform, mainly within primary care.S
  4. Structure of health services. Health services are structured and funded around providers – medical services by doctors, pharmaceuticals through big Pharma and the Pharmacy Guild, and hospitals through State governments and private agencies. The structure of the Department of Health and Ageing reflects this provider focus rather than a focus on consumers. We need to progressively change the focus to serve the community rather than providers. One possible structure would be around types of users – acute, chronic and occasional. It would help reduce the competition between different provider areas for limited resources. The Department of Health and Ageing is not up to the reform tasks. It lacks health reform expertise that John Deeble personified.
  5. Governance. The current traditional Minister/departmental model allows vested interests to dominate the debate and the allocation of resources. The public ‘conversation’ is not about health policy, but how the minister responds to vested interests who set the agenda. The public is excluded. The media is heavily dependent on special interests for stories. The Reserve Bank provides a useful model of the direction in which we need to move – an independent and professional health commission with economic expertise that funds and directs health services subject to government policies and guidelines. The Reserve Bank has proven to be immune from special interests and their pleading. It is respected for being professional and serving the public interest. It effectively informs the public on key issues. This does not happen in the health field. We need a Health Reform Commission to lead an informed debate about health and to implement necessary changes.
  6. Private health insurance. The Commonwealth Government subsidy of about $12 b. p.a. which includes loss to revenue through tax incentives should be progressively means tested and the funds saved used to directly fund other health services, e.g. mental ,indigenous and dental and dental healthcare. The $12 b. annual subsidy favours higher income earners. It penalises country people because there are few private hospitals in the bush. PHI is inefficient with administrative costs about three times higher than Medicare. The subsidy has not taken pressure off public hospitals. Private gap insurance has facilitated enormous increases in specialist fees. Most importantly, the expansion of PHI progressively weakens the ability of Medicare to control costs. The evidence world-wide is clear that countries with significant PHI like the US have very high costs.
  7. Medicare. This great ALP monument needs a review. Medicare has become a passive but efficient funding mechanism rather than the public insurer it was intended to be. After all, it is called the ‘health insurance commission’. It is nothing of the sort. It is not even within the health portfolio. Why can’t Medicare offer policy options beyond a default available to all? Medicare has a remarkable database which should be used to highlight and inform policy concerning over and underutilisation of services across the country. We need transparency to high light waste, abuse and over and under servicing. We are ‘flying blind’ without this information being made available in an understandable form. Medical services should be subject to the same rigorous cost-benefit examination as pharmaceutical services. Medicare is not doing it.
  8. The Blame Game. We need to integrate both hospital and non hospital services. Unfortunately attempts to resolve the Commonwealth/State blame game that hinder integration have been largely unsuccessful. The Commonwealth should offer to set up a Joint Commonwealth/State Health Commission in any state that will agree. That Commission would be jointly funded by the Commonwealth and the State; it would also plan the delivery of health services in the State and so provide more cohesive hospital and non-hospital health services. Delivery of health services would continue through existing health agencies, Commonwealth, State and local government. The new Commission would be jointly appointed by the two governments and with agreed dispute resolution arrangements. In the event of a disagreement, the Commonwealth position should prevail as it would be the chief funder. Tasmania should be an obvious starter given its precarious financial position. Hopefully success in one State would then encourage other states to swallow their pride and improve their health services by cooperating with the Commonwealth. A more modest version of this would be for the Commonwealth and State Governments to pool their health money in regions to fund an agreed health plan for the region.

 

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