JOHN MENADUE. Saving Medicare.

Jun 28, 2016


In an earlier article in this blog, I outlined how Medicare is under threat but not for the reasons outlined by Bill Shorten. The threat is the erosion of Medicare from within by the power of vested interests and in this case, private health insurance. This vested interests wants to bend Medicare to its own ends and take us down the disastrous US private health insurance path. That would destroy Medicare.

Importantly the ALP has proposed a permanent Australian Healthcare Reform Commission which if established and well led and staffed could break the power of vested interests that frustrate reform. These powerful and unrepresentative vested include the AMA, PHI companies, Medicines Australia and the Pharmacy Guild. With great lobbying power, exercised in secret they are corrupting our democratic processes

The proposed Commission would be created through the consolidation of the Australian Commission on Safety and Quality in Health Care, the National Health Funding Body and functions formerly associated with the Australian National Preventive Health Agency, the independent Hospital Pricing Authority, the National Health Performance Authority and Health Workforce Australia. Many of their functions were dispersed to other agencies or the agency abolished by the Abbott Government.

The over-arching aim of the Commission would be to investigate, develop and evaluate proposed changes in Australia’s health system and advise all governments on these changes. It would also have a strong implementation capacity and be responsible for rolling out agreed structural reforms to Australia’s healthcare system, including funding agreements and payment systems. The new body would also include a Centre for Medicare and Healthcare System Innovation, to develop, trial, evaluate and implement new payment and service delivery models that aim to reduce health expenditure while improving the quality and safety of care. The Centre would also take over the responsibilities of the MBS review.

I envisage the most important function of this Commission would be to lead an informed debate on healthcare reform. Too often public discussion about healthcare is between the Minister and vested interests. The public is scarcely consulted at all. In recent years, the department of Health and Ageing has seen its role, not to help to develop good health policy but to manage relations with vested interests to keep the Minister out of political trouble. The department has failed in its responsibilities.

In the Policy Series in this blog on 2 June 2015, I set out the case for a Health Reform Commission.
‘One possibility is to establish a Health Reform Commission composed of independent and professional people to inform and lead public discussion and advise on important health reform issues. Clinicians should be included, but none of the vested interests.

The Law Reform Commission established by the Whitlam Government in 1975 is an example of how enquiries and consultations can be conducted with the community in order to make recommendations to government that are well-informed. The Law Reform Commission estimates that over 85% of its reports have been either substantially or partially implemented making it an effective and influential agent for reform.

The Reserve Bank is another example of how a respected, professional and independent body can be a leader in public discussion of important issues.

A major objective of a Health Reform Commission would be to outflank the vested interests and carry an informed discussion with the community, particularly of the key principles that should drive health care. Ahead of establishing such a commission in government it would be useful to establish an interim group of professional and independent people who can facilitate informed public discussion and provide advice.

A general remit to the HRC would be to encourage service cost discovery, price discovery and quality discovery, integrity (fraud and abuse) and fairness (access to care regardless of means or location)

In addition to these general responsibilities there could be specific referrals to the HRC or the interim body, e.g.

  • Ways to phase out the PHI subsidy and(use the $ 11 b savings to) introduce a dental/oral health scheme within Medicare.
  • How to establish ‘medical homes’ in primary care which include both private and public clinics that provide a range of services.
  • Remove perverse incentives for the remuneration of doctors.
  • Reshape the health workforce to the needs of the 21st

There are various ways to deal with public participation but the basic approach and method is that communities should be consulted to find what they want, and in successive rounds experts should analyse and report back on the costs and consequences of their proposals. For example, explaining that a completely free system would involve higher taxes and may involve greater waiting times.

One other model to ensure community input is through “citizens’ jury” – so named because the citizens to be consulted are selected on a random basis, and are informed by professional and independent experts. They could be asked to provide their advice back to government on such key issues as: to what extent do we want to share the costs of healthcare and how co-payments should be reformed. End of life issues could also be canvassed as well as many expensive interventions that have limited effectiveness. These citizens’ juries in health could be important vehicles for an informed national conversation on health, a conversation that we do not have at present.

(We must put the debate) … on health reform onto a more constructive and pragmatic path. Unless we get our processes working more effectively and particularly how to bypass vested interests, reform will continue to be very difficult. When we improve our processes we can be more confident of addressing particular policy issues.

Unless we address the issue of power and how and who exercises that power in the health sector we will not achieve worthwhile reform. Inertia will continue.

Power is in the hands of providers. It is not in the hands of the community, patients or even governments. We need leadership, institutions and processes to focus on how we overcome the way reform is frustrated.

Ministers of Health may be in office but they are seldom in power.’

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