JOHN MENADUE. Health principles and policies for the next parliament.

May 13, 2016

Thanks to Medicare introduced over 40 years ago, despite bitter conservative opposition, we have one of the best health systems in the world. It is sustainable but we waste over $20 b per annum. There are threats and problems that we must face.

What are they?

  1. On both grounds of equity and efficiency general practice, primary care and prevention must be the starting points in a good healthcare system. Too often hospitals and specialist care dominate the debate and the allocation of funds. The urgent invariably displaces the important. In particular, the Australian National Preventive Health Agency should be reinstated to lead the development of policies to combat obesity, alcohol and smoking related illness.
  2. Governments should pursue policies to entrench a single public payer, Medicare. A single public payer is the key to all successful overseas health systems. Like the US we are steadily and dangerously moving down the path of private health insurance. Just one example. Gap Insurance by PHI has underwritten the dramatic increase in specialist fees in recent years. Warren Buffett has described private health insurance as the ‘tape worm’ in the US health system. It is also true in Australia.
  3. It is essential that overtime we abolish the $11 b. cost to taxpayers of the subsidy to private health insurance. If individuals want PHI that is their right but I see no reason why taxpayers should subsidize a system that causes so much waste and unfairness. The $11b annual savings could be used in part to provide reimbursement to private hospital patients through a Hospital Benefit Scheme similar to the way we reimburse patients through the Medical Benefits Scheme. It would be much better for the Commonwealth Government to pay directly to private hospital patients rather than churn money through wasteful and destructive private health insurance funds. Getting the detail right would be very important. See link to an earlier blog on this issue ‘John Menadue Health Reform and cooperative federalism Part 1
  4. There is an urgent need for transparency in healthcare to ensure greater accountability and identify over and under servicing. Fees, particularly by specialists, should be publicly and easily available. Medicare has a treasure trove of data which must be analysed and published in understandable form. Too much is hidden behind the veil of so called ‘doctor/patient ‘relations. Like My School, we need a My Doctor and My Hospital. Providers must be made accountable so that the patient can make an informed choice and the taxpayer gets quality of care and better value for money.
  5. We need to review out-of-pocket expenses which in Australia are amongst the highest in the developed world. The out-of-pocket expenses are unfair and lack any clinical basis. For example, if we are admitted to a public hospital through an emergency department for an appendix operation we will pay nothing. But the out-of-pocket expenses for a modern hearing aid set will be about $9,000. There is no rhyme or reason in the ‘out of pocket’ mess we have at the moment.
  6. To overcome the blame game between the commonwealth and states, the commonwealth government should offer to establish a Joint Commonwealth State Health Commission in any state that will agree. Tasmania could be a good start. A political handover of state hospitals to the commonwealth is politically impossible, but a state by state approach for a joint arrangement is more likely to succeed. In such an arrangement, the state and the commonwealth would pool funds and jointly plan and implement a health plan for that state. An important feature of such a plan must be the integration of hospital and non-hospital care with the important objective to keep people out of hospitals and institutions wherever possible. An agreement between a state and the commonwealth could, as a first step, establish pilot schemes in regions to jointly fund and deliver health services in that region. See link to ‘John Menadue Health Reform and cooperative federalism Part 2
  7. We need to align clinical remuneration with good clinical practice. The present financial incentives are quite perverse. The present fee-for-service financially rewards doctors on the basis of quantity and not quality of care. This type of remuneration is quite inappropriate for treating the chronically ill. We need more general practitioners on contract, salaries or capitation.
  8. The government recently announced ’Medical Home’ trials which could help improve care for the critically ill. It would also be a welcome move away from fee for service. But it needs to focus also on prevention, reduction in hospital admissions and ‘team medicine’.
  9. The Coalition initiated review of the Medical Benefit Schedule should be supported. The review aims to modernise and critically examine the cost effectiveness of many items on the Schedule. This review also addresses the doctor’s remuneration discussed earlier. It will also examine the increasing takeover of general practice by corporations that have a financial incentive to maximise referrals for diagnostic services like blood tests and x rays.
  10. There must be more competition between pharmacies and a much tougher approach to Medicines Australia to secure substantial reductions in wholesale pharmacy prices.
  11. Work practices in our health sector may have been appropriate in the nineteenth century but they now need radical and major overhaul. We must have expanded roles for nurses, allied health, pharmacists and paramedics through judicious use of the Medical Benefits Schedule. There must be sector wide up-skilling and multi-skilling of our health workforce which is the largest and fastest growing in Australia. There are widespread demarcations and restrictive work practices right across our health workforce that must be tackled. Health Workforce Australia should be reestablished to focus on these urgent issues.
  12. To ensure an informed public debate on health reform we should establish a Health Reform Commission. A useful model is the Law Reform Commission whose recommendations have been very largely accepted by governments. A Health Reform Commission is especially necessary to counter the power of vested interests who dominate the health debate in Australia – the AMA, the Australian Pharmacy Guild, the private health insurance industry, Medicines Australia and private hospitals. Seldom do we hear the case for patients or the public interest. Ministers for Health may be in office but they are seldom in power. The providers have the real power and politicians are very frightened of them. As in so many areas of public life, the power of vested interests is doing enormous damage to the public interest and our democratic system. The debate about health in Australia is corrupted by powerful vested interests. We need a well-informed public debate. We will not be having that in the current election campaign.


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