JOHN DWYER. Health care reform – Part 2.

Jun 20, 2018

Without acceptance of a ten year plan and the creation of an instrument to implement that plan we will not be able to engineer the evidence based structural reforms to our health care system that will improve quality, equity and cost effectiveness.

Before the last Federal election, Labor promised that if elected it would establish an Australian Health Care Reform  Commission (AHCR) to tackle the numerous structural inefficiencies that beset our current health system. That remains Labor policy. We don’t need a commission of enquiry, rather we need a commission that is an instrument capable of implementing obviously needed reforms. As outlined in part one of this argument, there are lessons to be learnt from the Whitlam government’s creation of such an instrument that should guide us as we discuss the terms of Reference for a contemporary commission.

It is universally agreed that the cost effectiveness and the integration of care, essential for a patient-centric ( as opposed to a provider-centric) system, is severely compromised in Australia because of the division of responsibilities that see States responsible for public hospital care and the Federal government responsible for primary and community care. Public hospital admissions increase by about 4% each year with much of that increase involving older and sicker patients with medical problems. Around the country Emergency Departments report annual increases in presentations of between 9 and 11%. In our system the States have no levers to pull to reduce the demand for inpatient services. The federal government’s expenditure on primary care is largely consumed by the need to help patients with established complex diseases and there is no provision of the infrastructure needed to effectively focus on prevention.

Devolving all health care to the States would involve costly duplication and regional boundaries (State borders) would continue to compromise sensible regional planning. The States would still need to struggle with the federal paymaster as they cannot tax to raise the health care dollars needed. A federal takeover of all elements of our health care system would be equally problematic. Canberra has no experience of running hospitals. You may remember the Howard government’s attempt to run a hospital in Tasmania. Within a few weeks responsibility was handed back to the State! To solve this impasse once and for all we need an AHCR, populated with the appropriate expertise, to establish and implement policies and fund all of public health care.

Sounds like “pie in the sky”. Could a Labor Government create such an entity? A few things seem obvious. It would need to be a creature of COAG reporting to the COAG Health Council. All our Health ministers are members of the council and the chair of the group is regularly rotated. In this model the State and Federal governments would be equal partners in the reform process.

Whitlam was able to do it and the history of his commission reminds us that it envisaged, from the outset, that practical difficulties could be overcome by goodwill, mutual respect and experience. Is such an approach too hard to visualise for Australia in 2019?  History tells us that we could expect opposition to a number of reforms from current providers of health care and medicines. Both Labor and Coalition governments have all too frequently given in to pressures from the AMA, Medicines Australia and, particularly, the private health insurance industry as they fight to protect their vested interests. But the times they are a changing and PHI for example is less and less popular with Australians because of its very expensive unsatisfactory product. Encouraging has been the cautious acceptance of the AMA and the Royal Australian College of General Practitioners of the need to embrace the Medical Home (team medicine) approach to primary care and the need to move away from the fee for service payment model. In the early days of the commission, engagement with the public, which I believe would result in widespread enthusiasm for the proposed reforms, and contributions and publicised support from respected health-related organisations would shore up political support for the reform journey.

Some other lessons from the Whitlam experiment and recent structural reform programs in other countries include the philosophy of “bottom up” participation in and acceptance of proposed changes. No imposition of changes from above by caveat. Consultation with stakeholders, a reasonable degree of flexibility and appreciation by all that the reforms needed will require many years to fully implement will be essential strategies.

The AHCR would take us on a journey that I estimate would take at least ten years to complete. With the needed reforms agreed on, the AHCR would logically change to become the Australian Health Care Commission (AHC), firmly established to oversee health care in Australia for the foreseeable future. The “journey” concept can solve a number of political problems. If Bill Shorten said that Labor would withdraw the subsidy for private health insurance if elected,  political outrage  would be unleashed. If he said “Our master plan for health care reform will include the gradual withdrawal of the PH subsidy as other initiatives restore adequate surgical capacity to our public hospitals”, it’s hard to imagine a political attack having much traction.

Journeys need preparations, flexibility re routes taken, timetable adjustments etc but are committed to a specific destination.There is a reasonable consensus re what our reform destination would look like. There you would find a taxpayer-funded health system that ensured that Australians have adequate health literacy, the infrastructure to help them avoid life-style related diseases, integrated care and timely access to quality care based on need not personal financial well-being. The system will be cost effective with total health expenditure kept below 11% of GDP.

In 2029 the AHC funds public health in Australia. It has money and a detailed model of care which it wishes to purchase. After careful analysis Australia has been divided into health regions that make geographical sense. Regional authorities oversee and fund regional care. The resource distribution formula needed for regions is based on need not just population numbers. Rural and indigenous communities greatly benefit from this model. Within regions there are a number of Area Health Services charged with integrating funded services in their area (hospital, primary and community care etc). Funding works on a “funder/provider split” model. Contracts are available to both public and private providers. Regions will look at role delineation for their hospitals to create greater efficiency and quality. No longer are they islands in an ocean of health care.

Primary care has been gradually restructured by a “coalition of the willing” to implement the benefits of team medicine. The favoured “Medical Home” model sees patients enrolling in a “home” populated by teams of health professionals whose services are paid for by the AHC which has replaced Medicare. It’s worth noting that as it is, Medicare is a payment system;  it has no policy, let alone reform, agenda. There is a major emphasis in one’s “home” on improving health literacy and preventing illness. Continuity of care, aided by a number of internet and social media initiatives, allows for early detection of problems that if treated could avoid  the scourge of chronic illness. The teams needed by patients with chronic diseases are largely in house. Homes are funded to provide outreach services to well known patients of the service, a strategy we already know minimises the need for many to be hospitalised. Fee for service payments to participating professionals will have been replaced by salaries or contracted payments. For those interested in more initiatives that I feel are crucial a more detailed description is available from previous contributions on this subject. (P & I 3 June 2016).

There is no hope that we will ever see anything like this evidence-based vision eventuate without the political courage and boldness to take us on a long productive journey facilitated by an authority that can create change. Presenting this vision to Australians in an appropriate form during the election process may generate public enthusiasm and one would hope that in the coming pre-election months Labor would consult with  those who have studied health reform initiatives in other countries and generated models of care that could improve cost-effectiveness, equity and the health of Australians.

John Dwyer, Emeritus Professor of Medicine at UNSW, founded the Australian Health Care Reform Alliance and has long been involved in the promotion of structural reform of Australia’s health system.


Share and Enjoy !

Subscribe to John Menadue's Newsletter
Subscribe to John Menadue's Newsletter


Thank you for subscribing!