Kerry Goulston. Two health reform issues.

Mar 18, 2015

Instead of tinkering around the edges of Health Reform in Australia,and dodging meaningful revision of the Medical Benefits and Pharmaceutical  Benefits Schemes,  all Federal politicians and leading clinicians could be debating two issues which would have significant effects over the next 20 years.  Currently thousands of clinicians (doctors, nurses, allied health and other healthcare providers) are despairing of meaningful healthcare and workforce reform  by our Federal and State politicians.


It appears that, over recent years,  other countries have been looking at widening the choices of remuneration to healthcare providers.  Why is Australia not doing so?

The US Secretary of Health and Human Services wrote an article earlier this month in the New England Journal of Medicine on “ Setting Value-Based Payment Goals “ .  She was building on  health reform initiatives  suggested by clinicians and health economists.   They stressed that the current US system was too expensive and out of date.  She put forward a plan to have 90% of all Medicare  fee-for service  payments  and  50% of Medicare payments tied to quality or value through alternative payment models by the end of 2018.   Suggested alternative payment models included accountable care organizations and bundled-payment arrangements.  She outlined three strategies. First incentives  to reward hospitals and healthcare providers  for delivering high-quality  patient care with  advanced primary care medical-home models and introducing new models of  bundled pay for episodes of care .    Second, greater integration of practices and greater co-ordination among providers with more attention to population health. Third, a greater adoption of electronic health records (EHR)—although she states that in the US  78% of physicians and 94% of hospitals  now use them.  She also stresses a greater commitment to transparency  of data on costs of healthcare services to enable consumers to make  better informed choices when selecting providers.

New Zealand has, for some years, moved away from fee-for-service alone to include universal capitated funding, patient co-payments and targeted fee-for-service for specific items.

The French Minister of Social Affairs and Health writing last year in the Lancet talked of remuneration reform.   She wrote that because of evidence of substantial and increasing health inequalities, the payment system to providers had been reformed, inter-disciplinary team practice fostered  and health information strengthened to help consumer choice. Alternative models to FFS included  capitation and incentives to providers to avoid unnecessary care and higher valued services.

Who would look at these options in Australia?  Our politicians and health bureaucrats  have singularly failed to do so.  Perhaps we need an independent body?

Healthcare Reform Commission

Increasingly there are calls to establish an independent, professional and ongoing body to advise the Australian community  on long- term  issues in healthcare reform.  Such a healthcare reform commission  would need to be completely independent like  the Reserve bank. It could look at  and advise on many major health problems.  John Menadue  suggests a pilot joint Commonwealth/State initiative  to end the dichotomy of funding  between the two administrations which  encourages cost-shifting.

In Australia  we are blessed with outstanding  public health academics, health economists and leading clinicians. They could lead us  into a sustainable future, gaining the support of clinicians and the public.

Kerry Goulston is Emeritus Professor of Medicine at Sydney University.

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