JOHN DWYER. What a mess! Insurance for health care, both public and private, is increasingly dysfunctional with sensible and equitable solutions held hostage by “vested interests”. PART TWO

Dec 11, 2019

At least 50% of the money private health insurers pay out annually to those insured is absorbed by just 5% off their customers.  Most of these patients have chronic medical problems and have multiple admissions per year .While private hospitals need bottoms on beds to be profitable, public hospitals and private insurers are desperately in need of a  reduction in hospital admissions. Numerous strategies for achieving this are being floated but sensible reforms are difficult as those with vested interests in the status quo have undue control of government initiatives. 

Private Health insurers would like to pay for those insured to have some services, currently delivered in private hospitals, provided in a home or community setting. It is argued that some private hospital admissions are arranged just to save an insured patient money that they would need to pay for the service if given out of hospital. I imagine the number of services involved would be small. Mental health care, chemotherapy and some orthopaedic services are being forwarded  as examples. I am far from, convinced of the practicality of the scheme dubbed by Minister Hunt as “Hospital in the Home”. Then again we have the equity issue. If this is a feasible and desirable way of delivering care it should be available to all of us not just those with PHI.

Once the Hospital in the Home idea was floated the College of General Practitioners responded with a “what about us?”question. GPs, the college insists, are perfectly capable of delivering chemotherapy in homes, caring for wounds and monitoring patients with heart failure and offering a range of others  services in homes if they could be appropriately compensated for this care. However before we discuss how they would be paid, the metaphorical “Elephant in the room” I need to digress to talk about GP services.

GPs are specialists and are certainly trained to look after common problems uncommonly well and its no wonder that many complain bitterly that the current health care culture has patients feeling that there GP must refer them to a specialist for treatment of these conditions. GPs earn far less than other specialists because the are not recognised for the specialist they are. GPs are swamped with required “paper work” to get Medicare payments and the fee for service structure makes it uneconomical to leave their surgeries and make home visits. As a result most don’t. Many tell me they are bored and feel under-utilised. This reality is picked up by medical students exposed to general practice with a survey of career intentions for students graduating this year finding that only 13% have any intention of becoming GPs. While I will argue below that a completely different model of Primary Care paid for by Medicare could solve most of our current problems, this brings us back  to the Elephant. Alarm bells sounded as President of the RACGP, Harry Nespolon publicly backed health funds in their push to be able to fund GP visits to insured patients who might require fewer admissions to a private hospital a result of this initiative. Any introduction of a two tiered system within our Primary care model would herald the end of an equitable universal health insurance model in which the same quality of care is available to all on the basis of need not whether they have PHI.

Many are suggesting that our health system is so dysfunctional that the best strategy would be to ask the Productivity Commission  to look at the whole system, public and private with no caveat that final recommendations must include the retention of private health insurance. This might be better than nothing and would allow our politicians to say they are doing something but “Rome is burning”!  Our public hospitals are full of very sick Australians whose medical problems, which were probably avoidable, are now robbing them of much quality of life. Emergency Departments are experience ever increasing numbers of presentations, our public hospitals can’t perform enough planned surgery to stop the development of unacceptable waiting times, Many older Australians feel they must sacrifice much to pay extraordinarily high premiums for PHI as they don’t trust the public system to be there for them when they need it. Younger Australians don’t think PHI provides value for money meaning ever higher numbers of policy holders are older and likely to use them. Healthcare for rural Australians is inadequate. Without an emphasis on prevention in our Primary Care system and unacceptable levels of health literacy, Australians literally swallow the message from pharmaceutical  companies that you can neutralise an unhealthy life style with some vitamins and supplements.

Truth be told we do not need the Productivity Commission to tell us how to restructure our health care. National and International experience provides reform pathway we can embark on with confidence. Labor policy for the last election supported  the establishment of an Australian Health Care Reform Commission. A creature of COAG to provide State and Federal government “buy in” to the imperative that is a single funder provider of health. Regional authorities would be established that would purchase health care from GPs and hospitals (public and private) and ensure the care offered was fully integrated. A detailed discussion can be found in my contributions to P&I on June 18 and 20, 2018).

To finish I need to return to the question of the moment for public hospitals, PHI providers and, of course all Australians; how are we going to reduce the number of us who need hospital care?

Australians need to have the opportunity to enter into a health contract with a new model of Primary Care; the “Medical Home”. Medical Homes, (MH) recognise the importance of all of us having available access to a range of health professionals who have embraced this model; “Team medicine”. One of the major complaints we have with our health care system is the lack of integration of our care when we need help from a number of professionals. The philosophy involved in the MH initiative is crucially important. Currently we go to see our GP when we have a problem. One goes to one’s Medical Home for advice and monitoring needed to keep one well. Of course the team is there to help you when you are ill. The model has proven to be very successful at improving the health literacy of those enrolled, providing early detection of psychological and physical problems which are better managed by early intervention, better management of chronic disease by the team and monitoring, through outreach services to vulnerable patients,  the need for interventions that can prevent a hospital admission. The concept is being implemented in 11 OECD countries and its time we embraced the initiative which has been shown to reduce hospitalisation rates by 20-40%. Again for those interested, details are provided in my P&I contributions referred to above.

The team would need to be paid for by Medicare. Phasing in the medical home model while phasing put tax-payer subsidies for PHI would provide the funds needed. We would reduce medical admissions to hospitals allowing them to offer more surgery, the current rationing of which provides the only acceptable reason for tax-payers to subsidise PHI.

John Dwyer is an Emeritus Professor of Medicine at UNSW and founder of the Australian Healthcare Reform Alliance


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