John Dwyer. Health Policy Reform Commentary – Part 2

Feb 8, 2015

In the first part of my commentary on John Menadue’s Health Policy Reform in his blog, I discussed  the barriers frustrating any reform agenda. In this second part I will comment on John Menadue’s suggestions for “overcoming these obstacles to health reform” and provide my own thoughts on what a reformed health system might look like.


In his blog he commented that “seldom do we stand back and ask the central issue: what do we need and expect from a health system”? For some years now I have presented the following answer to that question to professional and community audiences. We need, deserve and can afford a health system that—-

Is focused on the needs of the individual, is resourced to maximise opportunities for avoiding illness (prevention), is demonstrably equitable, sustainable and provides evidence based quality care in a timely manner available on the basis of need not personal financial wellbeing”.

A few years ago, thanks to an initiative of the Division of Primary Care at the University of Queensland, I had the opportunity to take part in a series of town meetings around Australia where we discussed what citizens wanted from their Health Care system. We dissected the elements of the above definition and each of the elements therein was readily appreciated and endorsed. The concept of a “medical home”, (recently discussed in Pearls and Irritations) as provided by an Integrated Primary Care model was often greeted with a “Why didn’t we introduce that ten years ago” question. I was interested in the acceptance by audiences that we may need to pay more for a better health system and the willingness to do so.

I discussed the above definition and its ramification at a national meeting of the Australian Health Care Reform Alliance to which we had invited Tony Abbott, health minister at the time. He told us that he did not like to hear talk of “reform” when we already had the best health system in the world that only needed “a little tinkering at the margins”. I was reminded of this when reading John Menadue’s comment that reform “will be hard without political leadership and political will”. There are none so “non-reformist” as those who insist there is nothing to reform.

What reforms would provide us with the health system we need and how do we overcome the political inertia? A single funder of our national health scheme remains the “Holy Grail” for most reform commentators. As John Menadue highlights the jurisdictional division of health care such that hospitals are the responsibility of the States while our Federal government funds Primary Care(GP’s and others) is the single largest barrier to both integrated and cost effective (sustainable) care. We are the only OECD country so burdened. Perhaps Federal and State governments think that the cost shifting and “blame game” that follows is politically attractive as the public may be unsure who is responsible for problems. No one is asking the Commonwealth to be the sole provider of health care. Rather we are suggesting that the Federal government fund providers that will, implement the health care model Australians and their government have agreed upon. However while we must not abandon the goal, the current reality is that neither major political party is interested in the single funder model.

Looking at our needed reforms and learning from the experience of other countries that have modernised their health systems it is not difficult to provide a map for a reform journey.  As is true for any journey one must have a definite destination in mind. The journey may have its trials and tribulations but the destination is set. Our destination (the Health Care system we need and can afford) must be determined by in depth discussions with Australians about the need for change. Readily understood models must be put forward for analysis of their benefits as well as the associated ramifications. This is particularly important if more public expenditure is required to fund the new model.

Apart from the old-fashioned “Town Hall” style meeting referred to earlier, there are numerous opportunities for providing information to and receiving feedback from the community.  I was most impressed with the quality of the discussions provided by “citizens juries” moderated by the much-missed Gavin Mooney.  All media outlets including social media would be utilised. I agree with John Menadue that the process of consultation and the formulation of the desired model and the elements it contains (our destination) should be overseen by a Health Reform Commission populated by independent professionals and community representatives so that it is demonstrably apolitical. The model must be “efficient and equitable”, efficient in that it provides the clinical outcomes desired in a cost effective manner and equitable in that its benefits are available to all Australians.

While the longest journey starts with the first step, in this case it is the very first step that is likely to be most difficult. That first step requires us to break through the barrier of political intransigence.  International experience and a study of what I believe we need to do in Australia suggest that our journey will take about a decade to achieve the desired transformation. As John Menadue suggests it cannot be rushed. And there immediately is a political problem as increasingly short-term governments are disinterested in projects without imminent political kudos.

However if we are ever to achieve political support for reforms we must be able to present a clear vision of what we want. Perhaps the most frustrating part of the present Government’s attacks on primary are is that it is devoid of any vision for improving outcomes and cost effectiveness.

What follows is a summary of the initiatives and organisation we might see if the community and government were to want our health system to have the characteristics I described above.

The Health Reform Commission would hand over reform implementation to a new statutory body; say the Australian Health Authority (AHA) and certainly not the Department of Health and Aging. This organisation must take us to our destination. It holds all the health care funds expended by the Commonwealth and States. It replaces nine departments of health. It mangers a series of necessarily central bureaucratic processes, such as the PBS, public health policy and interactions with numerous agencies in order to support the social determinants needed for a healthy community. It establishes a series of Regional Health Authorities (RHAs) dividing Australia into logical and manageable demographic clusters and provides each with funds based on a resource distribution formula that is responsive to local need and not just population numbers.  In this way the current problems created by State boundaries being artificial health boundaries are overcome.

RHAs would seek providers for Hospital, Community and Primary Care services. The States may well seek funds to continue to manage their hospitals but the role delineation for such hospitals would be negotiated with the RHA. A number of Primary Health Care organisations will be funded in a region. (The current model of having a small number of PHOs replacing Medicare locals and responsible for improving care over huge areas but not actually offering direct care is fatally flawed}.

Within RHAs Primary Health Organisations would act as hubs in a hub and spoke model directly offering primary and secondary services (In New Zealand they may run 23 hour wards and treat minor emergencies). PHO’s would offer a range of supportive services to affiliated primary care practices. These would include help via bulk purchasing, continue professional development, drug education, and IT management and, crucially, help with required data collection to document health outcomes.

The preferred model of primary care supported by RHAs would feature the “medical home” model of Integrated Primary Care wherein funding is available to support teams of health professionals (including dentists and dental hygienists) working in the one practice to help enrolled patients with prevention strategies and early diagnosis and management of health problems that could result in chronic illness. In house teams would manage chronic and complex disease and care in the community for many currently sent to hospitals.

In this model “Fee for Service” (FFS) payments would only be applied to “drop ins’ with short term self-limited problems. (John Menadue  accurately pointed out the perverse incentives attached with FFS payments and certainly young doctors contemplating a career as a GP are turned off by the thought of practicing “turnstile” medicine. (Some movement within the AMA to support a move away from FFS heartens me). Chronic disease management is covered by capitation funding with a bonus system for better health outcomes. A consumer controlled electronic health record facilitates integration of the care offered by all providers and hospitals.

Best practice management in community and hospital settings is facilitated by the availability of standardised evidence based clinical pathways for a given problem These would be generated by “craft groups”, specialist doctors, nurses and allied health professionals working in a given field who “think globally for action locally”. Professors Kerry Goulston, Graeme Stewart and I set up such a process with excellent outcomes in NSW. The methodology is now applied more broadly by the Agency for Clinical Innovation. This provides a major weapon in the effort to reduce expensive investigations and procedures of little clinical value described in the first part of my commentary.

In the light of these new directions medical education has to change and inter-professional learning curricula are necessary to prepare the next generation of health professionals for “Team Medicine”. Rural based medical schools with postgraduate specialist training available in rural settings is  necessary to solve the shortage of medical practitioners in rural Australia.

John Menadue’s forecast that 15 billion dollars could be saved by health system reform is too modest. The above “imaginario” if implemented would save much more. Overseas experience suggests that we could expect a 30-40% reduction in hospital admissions over 10 years. Just before Christmas the UK government received a commissioned report indicating that by spending an extra 72 million pounds on improving primary care the health system would save 1.9 billion pounds by 2020.  By spending more on Medicare (now a specific health care program not a doctor’s bill payer) to implement these changes we could save many billions, as hospital care is so expensive. It is quite possible that the elimination of inefficient health spending as outlined in part one of this commentary could fund the changes.

Lessons learnt from change management strategies in other health systems tell us that reform must be community supported and feature “bottom up” modelling. Clinicians would not be forced to adopt change with early implementation of the desired model involving a “coalition of the willing”. The latter should participate in establishing government funded “proof of concept” primary care services as described. How one laments that fact that the Super GP clinic money provided by the previous government could have readily funded a series of “medical homes”.

For two decades John Menadue has championed the idea of a “proof of concept” demonstration of the value of whole of health care integration by creating a State/Commonwealth Health Commission in Tasmania to begin with,  wherein pooled funding would allow many of the above concepts to be trialled. Of course I would strongly support such an initiative for although, if successful, its importation to the mainland would leave us with many problems that could be solved by the re-alignment of health boundaries, patient focused integration and cost effectiveness would certainly be improved.

I suspect that the Abbott government wants to reduce, as much as possible, its health footprint and would be happy to see health care handed over to the private sector. In every country where this has happened health expenditure has increased but not satisfactory health outcomes. The government’s initiation of a review of the benefits or otherwise of federalism may lead to a discussion of the possible assumption by States of all the public health care offered to their citizens. Any discussion that moves us away from the “status quo” is welcome. John Menadue’s three health policy reform blogs are informed and provocative and I hope will revitalise the reform debate.

Medibank/Medicare was launched 40 years ago. It was designed to fund the health delivery system at that time.  We need now to address the basic issues concerning the way health services are delivered.

I am grateful for the opportunity to add my comments.

John Dwyer is Emeritus Professor of Medicine at UNSW.








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