Does Catholic Health really want to destroy Medicare? A Catholic Health response by CEO Martin Laverty

May 29, 2013

On May 14, I wrote a blog ‘Does Catholic Health really want to destroy Medicare? Martin Laverty, CEO of Catholic Health, responds as a guest blogger.

Catholic Health Australia (CHA) commissioned the National Centre for Social and Economic Modelling (NATSEM) in 2010 to provide a contemporary assessment of the link between a person’s health and their personal wealth.  NATSEM found 65 per cent of Australians in the lowest income group lived with a long-term health problem, compared with just 15 per cent of those in the highest income group.

In 2012, CHA again tasked NATSEM to calculate the cost of this divide in health outcomes between the wealthy and wealth-less. NATSEM found 60,000 hospital separations costing $2.3 billion, 5.5 million Medicare transactions costing $273 million, and 5.3 million Pharmaceutical Benefit Scheme scripts costing $184.5 million annually could be avoided if Australians had more equal health outcomes.

These NATSEM cost calculations are assumption-based models. The reality would likely stray from the projections of health economists. The point of the exercise was to provoke a debate about the need for action on health inequity, not just for reasons of social justice, but also to promote efficient use of constrained health funding.  The findings of the exercise also raised some doubts about Medicare’s current ability to best meet the health care needs of the poorest within our community.

CHA’s interest in health equity and more efficient use of health funding is rooted in the Church’s reason for being in health care. The Church is in health care to provide healing to the sick but with a specific focus to address the needs of the poor, and to advocate for health system improvement to that end.

When the Bennett report of the Kevin Rudd-established Health and Hospitals Reform Commission was released, it floated the idea of Medicare Select. The report suggested health care plans could be developed to better coordinate interaction of individuals with health care services. The term the commission’s report used for this proposal was Medicare Select.

In pursuit of better access to health care services for the most socioeconomically disadvantaged within our community, CHA flagged interest in being involved in designing specific health care plans built around the needs of the most underserved Australians. We suggested if Government proceeded in this direction, we’d consider ourselves setting up a health care plan designed specifically for low-income Australians to get better access to health care than Medicare currently affords.

With the Health and Hospitals Reform Commission report now fading in people’s memories, CHA has taken regular opportunities over recent years to re-float this idea of tailored health care plans for the most disadvantaged Australians. We’ve done so because we see low-income Australians often missing out on health and dental care access, and living with the adverse consequences that entails.

The most recent re-floating of our interest in Medicare Select came when CHA appeared before the Senate Inquiry into the $1.6 billion cut in Commonwealth funding to public hospitals.

In pointing out to the Inquiry what the cuts would mean for the 2,700 public beds operated by Catholic hospitals nationally, CHA reminded the Senate committee of the need for further health reform. CHA promoted the role of a single funder of health services to end cost-shifting between governments. CHA also pointed to the potential for Medicare Select health care plans to again be considered for the new discipline they would bring to health expenditure management.

In response to the promotion of further policy reform, CHA copped a bit of flak (including Does Catholic Health really want to destroy Medicare?). The flak was not unexpected, as many have lined up to reject Medicare Select as too radical a departure, without fully exploring its good and bad points.

Rather than having multiple layers of government competing to offload responsibility for funding a patient’s treatment to another tier of government, Australia would benefit from adopting a single funding system.

In our 2013 Health Policy Blueprint , CHA proposed two possible mechanisms to achieve single national responsibility for funding of health services.

The first option is regional health authorities, publicly funded on a population basis and responsible for purchasing care for people in their regions and for reducing health inequalities. The second possible option would be to further develop Medicare Select, which has many similarities to the system currently operating successfully in the Netherlands.

Both models were briefly considered in the Bennett report of the National Health and Hospitals Reform Commission. They’ve since disappeared from public discourse.

While Australia continues to have unacceptable gaps in health outcomes and with the blame-game between Commonwealth and state governments on hospital funding raging once more, the next steps of health reform need to find the way back into national debate. Health policy experts should in fact be welcoming debate about what comes next in health reform, rather than seeking to shut it down.

Martin Laverty is the CEO of Catholic Health Australia. This blog is his response to “Does Catholic Health really want to destroy Medicare?” published on May 14.

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