The health debate in Australia has several shortcomings.

First, it focuses on managerialism without establishing the values that should underpin and drive a national health service. Fragmentation, inefficiency and waste are important issues, but do we want a well-managed and efficient system that lacks guiding values? What is the health service for?

Secondly, the debate reflects the interests of provider groups who reluctantly concede incremental reform but oppose necessary structural reform.

Thirdly, the debate is about funding the demand for health services through Medicare, when after forty years of Medicare we need to address the supply side – how health services are delivered.
It is hard to find any coherent set of principles that guide health policy in Australia. So much is ad hoc, short term and born out of political compromise, designed to placate vested interests.There is no ‘system’, only relatively unconnected parts. Some services are provided free, while others like dental receive little government support. Some services are covered by tax-funded insurance through Medicare, but at the same time there are large incentives for mainly high income people to opt out of sharing and into private insurance. Politicians talk of “universalism” and a “commitment to Medicare” while encouraging the development of a two-tier hospital system. Governments, particularly Coalition governments speak vaguely about the importance of markets, but only in a few areas of health care is there market competition. What about auctioning provider numbers by postcode? Labor politicians sing the praises of bulk-billing while supporting high co-payments for pharmaceuticals and maintaining the Medicare safety net which mainly advantages the wealthy. (See A Health Policy for Australia – reclaiming universal health care, Doggett 2007, p.10)

I believe that there are some key principles that should guide health policy design.A universal single public-payer system accessible to all. Poor and rich should have access to the same high quality health services. That does not require subsidising inefficient private health insurance companies. A single payer like Medicare or Veterans’ Affairs funds both public and private providers. A universal system does not also imply a ‘free’ system. (For me, universality and a single public-payer are fundamental. They must be the bedrock of a fair and efficient national health service. But the federal government doesn’t discuss universalism and a single public-payer. In fact, it is retreating from both. We are approaching a tilting point in health care, as we have passed in education in establishing a two-tier health system that the United States is trying desperately to undo.)

• Promotion of private and public health delivery to ensure efficiency and effectiveness particularly in hospital services.
• Services designed around patients’ needs and not historic provider interests.
• Fairness through universal taxpayer funding.
• Priority given to disease prevention and keeping people healthy.
• The community actively involved in setting priorities eg indigenous health and mental health.
• Efficiency so that we obtain the maximum benefit from our limited health dollars. Why is it that we have a caesarean section rate three times the WHO guideline and only 10% of normal births delivered by midwives, whereas in New Zealand it is 90%?
• Subsidiarity whereby health care is delivered by the most local health unit (e.g. primary care) subject to national policies, national funding and national standards. (Opcit p.11)

This is not to say that we should be unsympathetic to governments which have to make pragmatic decisions on the basis of perceived or actual public concerns and the self-interest of health providers. Governments can only build on what we have at the moment. But in health as in so many areas, we need some clear principles which provide guidance and discipline in the development of health care.

I suspect that there is widespread agreement particularly on the principles of universality and equity, but in a democracy the only acceptable way to establish and assert principles is serious and continuing community engagement. Political leadership is important in articulating and shaping principles, but in the end, it is the community’s values and principles that matter.

In Canada, a decade ago, the federal government established a Royal Commission to conduct a dialogue with citizens and to make recommendations to the government on an ideal health service for Canadians. In ‘Renewing the Foundations’ of Canadian health, the Commissioner, Dr Roy Romanow, proposed, "A Canadian Health Covenant that expresses Canadians’ collective vision for health care and that outlines the responsibilities and entitlements of individual citizens, health providers and governments in regard to the system. We need consensus on why the system exists, what it is intended to achieve and how its component parts should fit together. This is vital to restoring the public’s confidence in the system".’  (Statement by Romanow QC, Ottawa, November 28, 2002, p.4)

In referring to ‘consensus on why the system exists (and) what it is intended to achieve’, Romanow was in effect saying that Canadians needed to agree on the principles that should guide the design of the Canadian health system. His report underlined the wide support amongst Canadians for the principle of universalism.

The Australian government has not spelt out why the Australian health system exists and what it is intended to achieve. Principles must come before managerialism. Why spend more money when we are not clear what we want our health service to achieve? What is the health service for?

Assuming we can establish the values and principles that should guide policy design of our health service, the real task then only begins. For, policy is easy, implementation is hard.

Policy is easy, implementation is hard

Implementation is hard because serious redesign of health runs immediately into the power of vested interests. I personally witnessed this at the birth of Medicare in the 1970s when I was Head of the Department of Prime Minister and Cabinet. The self-interested opposition of the medical profession was appalling.

Government archives, both Commonwealth and State, are full of health reform proposals that have never been effectively implemented because of the power of these vested interests.

The exercise of power in health is reflected in many ways.

• Vested interests like the Australian Medical Association (AMA), Medicines Australia and the Private Health Insurance companies and their lobbying activities put union power in the shade.
• The public debate is invariably between the minister and vested interest groups, with the community excluded.
• Inertia of health bureaucracies that are inward looking and work very closely with provider interests.
• Health is complex and some ministers, particularly state ministers, are easily captured by their departments.
• Ministers will never publicly admit that we cannot have all that we want in health, so the system is always under pressure and in crisis mode which makes planning for long term change difficult.
• Many vested interests are congregated around hospitals and as a result we have very hospital-centric health care.
• States’ rights get in the way of the community’s rights.

It is the lack of political will to contest vested interests which is the major cause of failed reform. Australia is not unique. Just ask Hillary Clinton and witness the debacle in US health today. Let me illustrate also from the Canadian experience. In Ontario in 1996, the provincial government set up a Health Services Restructuring Commission to not only advise on restructure in health but also to implement the restructuring. Ministers recognised that they were too subject to pressure by vested interests in the health sector and that a more arms length and independent commission could achieve outcomes that eluded ministers. Ministers had shown that they were unwilling or unable to address necessary closure or rationalisation of hospital and clinical services. The Commission made significant progress and after a period handed back its powers to ministers. A key in the Commission’s success was public education so that the public could better understand and accept the necessary changes. The public had more confidence in officials on the Restructuring Commission than they had in ministers.

In light of the way power is exercised in the health sector, what can be done in implementation?

• The Minister should stand back from day to day issues and crisis management of health and focus on the longer-term redesign of health services, including population health and a whole-of-government approach that embraces the social determinants of health. The main cause of poor health is poverty. The Minister should, wherever possible, be prepared to devolve and delegate greater responsibility and decision making to professional and independent organizations and people (eg Medicare, PBAC) and let them explain and defend what they are doing on behalf of the Minister.  The Minister should avoid the media loop in which vested interests dominate with their own agenda.
• The Minister should have a clear role in government in all decisions affecting health eg housing, jobs, transport, education. She is the Minister for Health – and not only health services.
• Re-shape the Commonwealth Department of Health and Ageing as a priority to enhance its economic expertise and ensure that it focuses on the community’s interests. Programs should be output rather than input focused as they are now around inputs of hospitals, pharmaceuticals and medical services. The department is not presently equipped to be the administrative driver of reform. Why has the introduction of an Australia-wide e-health system been so glacial?
• The government should elicit from the Australian community, as the Romonow Commission did in Canada, the principles that should drive health reform and establish thereby a constitution or covenant for health care.
• Establish a small, external, professional and independent Australian Health Commission to monitor and advise the minister on the implementation of its health principles and its health plan following decisions made in response to the Australian Health and Hospital Reform Commission Report and the National Preventative Health Task Force. The AHC should report twice a year to Parliament. An important role of this Commission would be public education to contest the views of vested interests and hopefully to persuade the community on the case for reform. A supportive community will make political decisions easier. The case for health reform must be won in the community.
• Establish a Joint Commonwealth State Health Commission in any state where the Commonwealth and that State can agree. The Commission would jointly fund and plan the delivery of health services in that state. Implementation would be relatively easy if there is the political will. (See ‘Breaking the Commonwealth/State Impasse in Health, Menadue, 2007). The Rudd Government has said that it will propose to the Australian people in a referendum that it will take over state hospitals unless the states improve their performance and cooperation. Given the history of incrementalism in health and the lack of political will at both federal and state levels to contest the vested interests congregated around state governments, I remain to be persuaded that this is a serious proposal. I hope I am wrong.
• Wind back the $6billion per annum taxpayer subsidy to private health insurance companies and pay the money directly to public and private hospitals.
• Expand the role of Treasury, Finance and Prime Minister & Cabinet in the health reform process. They can bring greater rigour, an ‘outsider’s view’ and a whole-of-government approach.
• There should be no more money without reform, e.g. the increased funding of state hospitals should be based on outputs and performance and conditional on significant governance and workforce reforms.
• The priority area for implementation and funding should be primary care with the rollout of 200 multi-disciplinary primary health care clinics across Australia. (See A New Approach to Primary Care for Australia, Doggett, June 2007).
• Clinicians, but not the AMA, must be heavily involved in the reform process.
• Urgently recruit and train good health managers.

The major issue in implementation is political will to break the paralysis that is cultivated by vested interests. Other issues are much easier to resolve. Good health policy and good health politics require the Commonwealth Government to skilfully and resolutely manage down the power of vested interests in favour of community interests.
In addition to political will, what is also lacking is a clear health strategy for structural change. There is a lot of activity and a lot of enquiries, but how does it all fit together within an overall framework. Reviews can inform governments but strategy based on community values must come from government leadership. And the two most important values or principles that should guide a health strategy are in my view universality and a single public-payer. And the most important driver of change must be primary care.

But none of this is possible unless there is political will.

The issues outlined in the above were discussed in two papers in the Medical Journal of Australia in September and October 2008.

Click below to read the full submission to the NHHRC.

Primary care, which places an emphasis on the multi-disciplinary, preventative and well-managed care of a patient, may not result in as many newspaper headlines as hospital emergency departments but there is good international evidence that it does more for the health of our community than even the best run and
most well-resourced hospital.

Professor Barbara Starfield from Johns Hopkins University has done extensive cross-national studies of how different countries spend their health dollars. Overall her research shows that countries that invest more into primary care have better
health outcomes, lower rates of all causes of mortality (including heart disease and cancer) for a lower overall cost than comparable countries that put resources into other areas of health care such as hospitals and specialist treatment.

While the details of these types of studies can be challenged – there are always issues of data compatibility between countries that make comparisons difficult – what should be taken away from this impressive body of research are the clear general
trends she has identified across multiple studies. These clearly demonstrate that independent of the wealth of the country, health determinants (such as smoking rates), and amount spent on health care, countries will do better by focussing more on
primary care.

Given that we have a choice about where and how we allocate our health resources, the smart choice is to put funding into the areas that deliver us the greatest benefit. The case for primary care seems clear.

What are the specific problems with the Australian health system that can be addressed through an increased focus on primary care?

First is the issue of the lack of planning and coordination of health care, both across and within different health care sectors, and a subsequent inadequate approach to the prevention and management of chronic disease. For example, people with chronic conditions in the early stages do not receive appropriate care in the community and so go on to develop more serious health problems which require hospitalisation. This makes no health, social or economic sense.

For many common conditions, such as diabetes, arthritis and respiratory diseases, we know what care needs to be provided to
keep people in optimum health. Yet instead of making this care easily accessible, we force people with these conditions to negotiate a maze of different administrative, funding and service delivery arrangements to receive the treatment they require. Of course the end result of this is that many people miss out on the best care for their condition – even when this care is
not complex or expensive to provide – and so end up requiring more expensive care when their condition deteriorates.

This is why over half a million Australians end up in hospital unnecessarily every year, according to research conducted by the Australian Institute of Health and Welfare. Most of these admissions could have been prevented through better management of chronic disease in the community.

Strengthening our primary care system would take pressure off our over-stretched hospitals, allowing them
to concentrate on caring for those who really need hospital treatment.

So how should this be done? In a previous paper for the Centre for Policy Development I argued for multidisciplinary primary care centres to be established to provide coordinated and preventive primary care. Labor’s pre-election policy included a proposal for GP Super Clinics, very similar to the model published by the CPD.

These clinics aim to deliver a range of primary health care services, including general practice and allied health, and will be supported with infrastructure funding from the Government. A key feature of the Super Clinics, highlighted in Labor’s pre-election policy platform, was that they will focus on delivering more integrated and coordinated care to patients. This should
assist in the prevention and early management of chronic disease and reduce unnecessary hospital admissions.

For example, under the current model of general practice, a GP seeing a patient presenting with the early symptoms of Type 2 diabetes has to either manage the complex issues involved with this condition on their own or refer the patient to other care providers (such as a dietician or a diabetes educator) with whom he or she has little contact. From the patient’s perspective, this can often involve making additional appointments and travelling to separate locations to see other care providers who do not
know the patient’s history or original presentation and who treat the patient in isolation from the other care being provided. The aim of a coordinated primary health care service is for patients to be able to receive the care they require from a range of different health professionals working as a team in the one location.

The locations for the first round of the GP Super Clinics have already been determined, with an emphasis on areas with current GP shortages and a low socio-economic status.

These clinics will address some of the problems inherent in our current health system and provide the community with better health care only if they achieve two things: they need to provide both new care and better care, compared to what is currently being delivered.

If they provide the same care as is being provided elsewhere (just in a different setting) or different (but not better) care, then we cannot expect them to result in improvements in health outcomes. They will simply be shifting demand from one
area of the health system to another.

Of course access to GP services is a problem for many communities but it is not the only problem. The context in which GP services are delivered is also important.

We have a GP workforce shortage – at least according to estimates based on the way GPs currently practise. This will not
change overnight and even recent increases in medical school intakes and GP training programs will not meet the community’s needs for health care under our current model.

A better approach is to change the way in which we use our GP workforce. We need to start supporting GPs to work more
closely with other health care providers as part of a multi-disciplinary team. Many services currently provided by GPs can be safely and appropriately provided by other health care providers. For example, practice nurses can administer vaccines, dress wounds, perform pap smears and undertake medication reviews. These services would be provided under the direction of a GP and in consultation with the patient. Practice nurses already provide some of these services in some settings in Australia
but only to a limited extent – partly because of our current health financing system and the way in which general practices are organised.

Other examples of potential collaboration between primary health care providers include pharmacists assisting medical practitioners with prescribing, counsellors and psychologists working with GPs to treat people with mental health problems and
physiotherapists providing manipulative treatment to people with minor injuries.

Increasing support for a team-based approach to primary care should be a major focus of any primary care policies. Using other
health care providers to support GPs is not about providing second rate care. In fact, care provided by multi-disciplinary teams can often be of a higher quality and can better meet consumers’ needs for increased access to services than care provided by a
single practitioner.

The proposed GP Super Clinics should support a multi-disciplinary approach to primary care through co-locating a number of practitioners in the one setting. Often the barriers to greater collaboration between health care providers are simply physical – they don’t work close to each other. Changes which enabled Medicare to fund services provided by a greater range of health care
providers could further support this approach.

Another positive of the Super Clinics is that they should promote a more preventive focus for primary health care. Currently, GPs have little incentive to provide preventive health services to their practice populations. Medicare is designed to support individual episodic care, rather than population-wide preventive health services. To maximise the benefits of Super Clinics they should be used as a centre for preventive health activities for their community, such as vaccination and screening programs.

Super Clinics also offer the potential to establish more efficient ways of sharing health and medical data. In our current
system, the duplication of data collection and entry wastes valuable resources, and results in a large number of medical errors. These clinics offer the potential to develop better ways of sharing relevant data between health professionals – with the
consent and involvement of consumers – to achieve better and more efficient health outcomes.

While the number of Super Clinics proposed by the Government is relatively small, they do offer the potential to move primary care towards a more consumer-focussed system that delivers high quality and coordinated care, prevents the development and
progression of chronic diseases and reduces inefficiency.

They represent a small – but significant – step along the path of primary care reform outlined by the CPD and by health groups. The way in which they are implemented and evaluated will be crucial to ensure that they promote a better approach to primary care and not simply more of the same. Potential dangers to their long-term success are the possibility that they are seen simply as addressing areas of GP workforce shortages in the current system, rather than as a different – and better – way of delivering primary health care for all – not just the disadvantaged.

CPD will be watching with interest as the Super Clinics are implemented around the country and will continue to research, publish and promote ideas for a better primary care system for Australia.

A large part of the paper concerns funding mechanisms, insurance, and rationing. The approach to this issue appears to be a very ‘economic' one. The authors indicate that unlimited demand is a problem, and that moral hazard must be addressed whatever the form of insurance, public or private. They argue that although copayments may limit access which would be bad, copayments also control excess demand and limit moral hazard.

They mention the market power of service providers in setting increasing prices in the face of increasing demand, but fail to mention the place of the service providers in servicing that demand, and contributing to ‘overuse'. The impression is that ‘overuse' of services is due to the patient, and the means to control such ‘overuse' is to control the patient with a copayment.

Defining ‘overuse' as the inappropriate or excessive utilization of resources, it is worth looking at how such ‘overuse' might occur.

• A patient attends a GP with a child with a sore ear. That is attended to but the mum then asks the GP to check the other two kids' ears too, just in case.

• A patient attends a GP demanding an MRI (expensive xray); the GP knows that despite his explanation of the inappropriateness of such a test, which the patient rejects, if the GP doesn't order the test the patient will go to the next clinic.

• A patient has a heart attack, is admitted to a private hospital and undergoes coronary angiography, a procedure to check the coronary arteries. This is done twice as frequently in private hospitals than in public hospitals following a heart attack [1].

• A patient attends a physiotherapist weekly for two years following an injury at work and when asked whether the treatment helps, she indicates that it doesn't.

• A patient attends a specialist clinic and is asked to come back for review in three months. His neighbour attends the same clinic for the same problem but sees a different doctor and is asked to come back in six months. (This example is based on the results of a randomized controlled trial in which doctors at a university hospital outpatient clinic in North America were allocated to receive income by salary or by fee for service. It was found that the fee for service doctors scheduled 30% more return visits than their salaried colleagues [2].)

Who is to blame for this? I suggest that no one is to blame, and particularly not the patient. Even in the first example, the problem is not the mum, it's that the overstretched GP with a full waiting room is not the appropriate person to address the fact that mum feels inadequate to deal with uncertainty.

But the major factor contributing to ‘overuse' in all of these examples is the fee for service funding mechanism. If that is changed and combined with adequate resourcing for the doctors and a team approach to dealing with the problem, then ‘overuse' will be markedly reduced. This will minimise the need for copayments and the associated risks of limiting access because of costs. Whilst all of the conditions on copayments suggested in the paper are very appropriate, especially removing the service provider from deciding on the copayment, this does not eliminate the risk of decreased access due to copayments.

More importantly, the fee for service contribution to the difficulties of rationing has not been acknowledged in this paper, let alone considered as an issue to be addressed. Rather, the emphasis has been on questioning the concept of the universal provision of free health care.

Further points raised about the universal provision of free health care include political naivety and cost. In the current climate, the paper's proposal as it stands could be regarded as politically naïve, given the desperate clamber for the ‘middle ground' by the opposition and the neo-liberal economic irrationalism of the current Federal Government. The proposals in the paper are supposed to be a set of ideas that are possible but require political will. A system with minimal, if any, copayments could remain a part of that. Political naivety was undoubtedly an argument used against William Wilberforce in his fight against slavery.

The argument that it would be too costly to eliminate patient contributions (20% of all health care expenditure) ignores the cost savings inherent in the provision of care in the public system. For example, Harper found that the private system charged twice as much as the public system to perform coronary angiography with no evidence of better outcomes, and that half of that came from taxes anyway [3]. If these unchallenged figures reflect the reality across Australia, then simply spending the money in the public sector has the potential to save a substantial portion of that 20% currently being diverted to private health care providers.

Thanks to sxc

It is also curious that the potentially pejorative term ‘free health care' is used in relation to an insurance product. Universal health care must be the only area in which the product of insurance is labelled ‘free'. Private health insurance does not attract the label, anymore than car and household insurance does.

The place of fee for service vs salaried is discussed briefly in relation to staffing of primary care centres. It is not mentioned however, in relation to allocative inefficiency. There are many contributing factors to the poor distribution of service providers but fee for service is clearly a significant factor as copayments can be much more easily elicited from patients in the leafy suburbs of Toorak than in outback Western Australia, adding to the disincentives to practice in rural and remote areas or poor urban areas.

The approach to the public vs private issue, i.e. that it is not a core issue and that provision of services can be separated from funding issues, leaves much unsaid. Whilst other countries such as Canada manage with about 95% of their public hospital services in private hospitals, an important distinction needs to be made. Almost all those hospitals are not for profit concerns and are thus comparable to the not for profit usually religious based public hospitals in Australia. The concept that private hospitals in Australia would be funded like public hospitals through DRG based government funding may be reasonable but for the inconvenient facts that about 50% of private beds are in for profit private hospitals, and private hospitals currently charge up to twice as much for procedures as public hospitals [3]. Requiring private hospitals to survive on this level of reduced funding needs to be considered in such a proposal. To suggest that ‘no firm need fear…. going out of business' does not ring true and would lead to stakeholder resistance.

Efficiency is a significant and very appropriate emphasis of this paper. The overwhelming evidence from North America and Australia is that for profit hospital care is more expensive than not for profit care [3],[4], even when public funds are used to buy the services from private hospitals [5]. In addition, mortality rates in North American for profit facilities, both hospital and outpatient services, are generally higher than in not for profit facilities [6],[7]. Thus, the for profit sector is less efficient, delivering poorer outcomes for more money. For the 50% of private beds in Australia which are currently run for profit, this evidence suggests that under the proposal, their efficiency will be less than the public hospitals. Whilst costs would be controlled by DRG based funding as suggested, the evidence suggests that mortality rates will be worse than in the public hospitals.

The answer may be to strictly regulate medical outcomes. Consideration of this issue raises another major problem with our health system. We do not measure health outcomes at the level required to ensure hospital efficiency. For example, we still don't know if there has been any improvement in the number of deaths occurring each year in public and private hospitals due to preventable medical errors [8]. In 1995, it was shown that 18,000 deaths occurred in public and private hospitals in Australia due to adverse events, and that 69% were preventable [9]. Even this appalling information has not been sufficient to stimulate the nationwide collection of useful data to assess outcomes of hospital stays. Without data, there is nothing to regulate. Efficiency cannot be determined. Profits can, and they will determine the quality of care.

Finally I would agree with Gavin Mooney's concern regarding community input. The paper supports increased community input into decision making but this should include involvement in setting the values and principles underlying any reform.

Tim Woodruff
President,
Doctors Reform Society

1. Robertson IK, Richardson JR Coronary angiography and coronary artery revascularisation rates in public and private hospital patients after acute myocardial infarction.. Med J Aust 2000 Sep 18;173(6):291-5

2. Phelps C 1997, Health Economics, Second Edition, Addison-Wesley.

3. Harper RW, Sampson KD, See PL, Kealey JL, Meredith IT. Costs, charges and revenues of elective coronary angioplasty and stenting: the public versus the private system. Med J Aust 2000 Sep 18; 173(6):285-6

4. Devereaux PJ, Diane Heels-Ansdell D et al. Payments for care at private for-profit and private not-for-profit hospitals: a systematic review and meta-analysis. CMAJ2004;170(12):1817-24

5. Silverman EM, Skinner JS. The association between for-profit hospital ownership and increased Medicare spending. N Engl J Med. 1999 Aug 5;341(6):420-6.

6. Devereaux PJ, Choi PT et al. A systematic review and meta-analysis of studies comparing mortality rates of private for-profit and private not-for-profit hospitals. CMAJ. 2002 May 28;166(11):1399-406

7. Devereaux PJ, Schuniemann HJ et al. Comparison of mortality between private for-profit and private not-for-profit hemodialysis centers: a systematic review and meta-analysis… JAMA. 2002 Nov 20;288(19):2449-57

8. Wilson RM, Van Der Weyden MB. The safety of Australian healthcare: 10 years after QAHCS. Med J Aust 2005; 182: 260-261

9. Wilson RM, Runciman WB, Gibberd RW, et al. The Quality in Australian Health Care Study. Med J Aust 1995; 163: 458-471

I particularly like the ideas about having a single health insurance scheme. Bob Evans, the justifiably well-known Canadian health economist, described why the Canadian government eliminated most private health insurance and established nationwide government health insurance during the 1970s. He said that Canadians have a strong sense of social solidarity, and ‘they believe everyone should be equal when it comes to matters of life and death'. Most Australians would share that view: when they were asked in 1997 whether they wanted a private health insurance rebate or preferred the money to be spent in public hospitals, 80% chose the latter. A similar statistic has been reported in surveys in other countries.

That said, I can't resist one minor criticism. The authors say ‘it would be politically naive to expect any government to fill the place presently occupied by direct payments and co-payments (currently around 20 percent of all health care expenditure, or $2 000 a household).' This is seemingly in conflict with the idea, clearly expressed elsewhere in the policy paper, that no government has any money: it is merely the custodian of the people's money and it should therefore do what the majority would like it to do. Given the overwhelming evidence that user fees reduce equity (no matter how complicated the ‘safety nets' may be) one might conclude that most Australians would support a reduction in user fees if they were given the opportunity to be sure about the facts.

Thanks to Scratch

Dave Barrett, one of Canada's most respected former politicians, said recently that health user fees are what Bob Evans called them many years ago: a dumb idea that has been discredited again and again but just won't die. ‘What Dr Evans does not understand, those of us who were in politics often enunciated dumb ideas because we thought we could get votes with it. I did it myself. I had to pay the benefit or the penalty of it on occasion. User fees are a dumb idea; they do not work. Just as plain and simple, all the research shows that. Not that that stopped me from using dumb ideas again and again, and I was a victim of my own policy on occasion.'

So my minor criticism is that we should not allow the defenders of social injustice and economic irrationality to excuse themselves by saying they have the responsibility to avoid being politically naïve. We should never give them a chance to use our own words against us.

I respect a drugs industry lobbyist who says he or she believes there should be more user-payment because this would improve industry profitability, or a rich and healthy person living in a gated community who says user fees appropriately punish the poor. I have no patience with people who say they have private health insurance 'to take the pressure off the public system' and I am worried about suggesting that it is politically naïve to do the right thing. We need no more than a government that has a degree of integrity and a basic understanding of health financing. We had such governments in the past, and we should not give up hope that we will have another in future.

With that said, and whilst I am aware of the risk of being described as a hammer who sees the solution to all problems as a nail, I would like to suggest that the role of information and knowledge and the technology required for their effective management have been substantially underestimated in the authors' present policy formulation.

Over a decade and a half ago the then NSW minister for Health, Peter Collins, described working in the health system as being similar to “operating in the dark” and despite all his efforts, as the Board Chair of the Australian Institute for Health and Welfare, little has really changed for those operationally engaged in the sector although there have been steady improvements in the gathering of statistical health information. Delivery of clinical health services is an very information intense activity with all service providers needing both patient related (current patient problem, current treatments, previous illnesses, family history etc) and technical clinical information (disease descriptions and symptoms, drug information, the evidence base for treatments and so on).

A core issue that has been emerging over the last few decades, at an accelerating rate, is the amount and complexity of the clinical information required for good (and safe) clinical and management decision making. The knowledge management task involved in delivery of quality, safe, up-to-date, evidence based patient care is rapidly exceeding the capabilities of practitioners and is having a negative impact on clinical outcomes. This recognition is part of the rationale for the push in the US, UK, Europe and Canada to provide clinicians with advanced computer systems (electronic health records (EHR) with decision support) and to ensure treatment errors are picked up at the point of care delivery before the patient comes to any harm rather than later. It is now clear such systems can save countless lives each year but to date we see no thrust to sponsor adoption of such systems in Australia. (Indeed the Australian Health Information Council — the peak body in the area — has been recently disbanded as far as anyone can tell.)

Evidence from overseas very strongly suggests that implementation of advanced Health Information Technology (HIT) can achieve improved quality of care, greater patient safety and less risk of patients “falling through the (inter-sectoral and internal) cracks” in the health system. The evidence that, on most occasions, less than half of appropriate patients receive the best care for their condition based on the best available evidence is alarming in the extreme and needs to be remedied. Technology can help with this!

Additionally the costs of care and the overall efficiency of the health sector can be improved with the possibility of very significant savings being diverted to delivery of improved services (A recent study conducted in Ireland suggested the impact of better information flows and co-ordination of care could reduce the overall cost of the their health system by more than fifteen percent and there is no reason to believe the same is not true in Australia.)

Health IT can also play a significant role in empowering patients to better control their health information through the use of electronic Personal Health Records (PHR). The PHR can be used by the patient (possibly with their clinician carer) to record their clinical information in a secure fashion which the patient can then make available to other clinicians as they choose to ensure accurate communication of information between those involved in their care.

The use of EHR and PHR technology can also, overtime, improve the quality of managerial information available in the health sector and, with appropriate privacy and confidentiality controls, assist in optimising the decision making in resource allocation etc. Additionally such information can assist in the prompt detection of changes in disease patterns which may indicate unanticipated drug side effects or even bio-terrorism.

Lastly, Health IT in more mundane areas such as the supply chain, financial and human resource management computerisation offers well understood advantages which have yet to be anywhere near fully exploited in the health sector, especially in the private hospital, office practice and aged care sectors.

In summary, there exists a very compelling business case both in terms of financial and clinical outcomes for a much larger investment in Health IT (as is acknowledged by the investments being made in the US, UK Canada and Europe) to assist in delivery of the goals of the authors proposed health policy. Australia has neither undertaken to discover if the same is true for Australia (as it surely is) nor recognised the strategies developed in the late 1990's have, with few exceptions, been comprehensive failures and wastes of money.

To not have fundamental importance of Health IT as a key enabler of improved Health Sector efficiency, equity, quality and safety explicitly stated is, I believe, a significant weakness in the present document.

While I would endorse much of what is being said, there are areas that I feel could do with more emphasis and elaboration and some that I think have been left out which I see as important.

Values and Transparency

Inequity and inefficiency need yet more emphasis than the authors have given them. Major indicators of inequity in Australian health care are the health of Aboriginal people; the size of the private sector and its inaccessibility by the poor; the metropolitan focus of Medicare; and the relative neglect of the health of Australians in the bush. Greater equity is what citizens want (see below).

We need more explicit policies on technical efficiency and especially more incentives to do things as well but more cheaply. The cry is too often ‘more money!’ In comparison to most other developed countries, little use is made of economic analysis to promote efficiency (with the exception of the Pharmaceutical Benefits Advisory Committee), and few of our top managers have training in economics.

More worrying still are allocative inefficiencies (unfortunately conceived wrongly in A Health Policy for Australia as being about fairness) which arise when resources are going to lower rather than higher valued interventions. This form of efficiency is about priority setting, for example between prevention and cure, between cancer and heart disease. Yet amazingly we do not have a system of explicit rational priority setting in Australian health care.

When, as is now the case, decision making on resource allocation lacks transparency, the underlying values are brought out too infrequently. Many of the problems of inequity and allocative inefficiency stem from lack of transparency. Leaving resource deployment largely to the discretion of individual clinicians, how can we expect that in aggregation this will add up to a coherent allocation of health care resources? It is not the doctors’ health service; it is ours, the citizens of Australia.

Management/Leadership Issues

Managing health services is difficult. I would like to have seen A Health Policy for Australia give this more attention. There is a paucity of good managers. Those there are need to be given their head and awarded higher incomes. When they do not perform, they need to be removed.

Morale is low throughout the system. There is a lack of leadership and of faith in the system and a distinct air of crisis management. Very conservative attitudes dominate which do not encourage solutions to be thought through but instead foster a ‘keep-the-head-down’ mentality.

Health services need tough managers. In an exercise in which I was involved, we were asked by the WA Health Department to look at which one of the (too many) cardiac surgery units in Perth should be recommended for closure. We came up with a recommendation. At the highest level an about turn resulted in no unit being closed, almost certainly as a result of ‘leaning’ by doctors. It is spineless decisions like these that see more and more money going to the tertiary sector and not enough to public health and Aboriginal health where the public want it spent (see below).

The Community Voice

Chosen at random from the electoral roll to look at some key issues in health care policy, citizens’ juries in my experience can work well [1]. Treat citizens with dignity, give them good information, make resource constraints explicit and ask them to think rationally and responsibly, they do. They tend to be more altruistic than is reflected in current health care. They do not push for shiny, high-tech items but rather prevention and equity. They recognise Aboriginal health as the greatest inequity. These juries are a way to allow the voice of the Australian community to be heard.

A Health Policy for Australia does give weight to the voice of citizens. However it is the paper’s authors who have set the principles. The first principle that citizens have come up with in juries is that it is the citizens who should set the principles!

It is one of the fascinations of the current health system that the media and public policy are almost wholly about mechanisms. The community voice can provide a vision, the principles upon which citizens want the health services built.

Aboriginal Health

This is surely the top priority in Australian health care. It remains appalling. To increase spending on Aboriginal health care by 50% would require a cut of only 1% for the rest of Australians [2]. Various small surveys suggest the Australian people would support positive discrimination for Aboriginal people [3].

There is also a need to pursue "cultural security" for Aboriginal people ‘ensuring that the delivery of health services is…such…that no one person is afforded a less favourable outcome simply because they hold a different cultural outlook’ [4]. Further, institutional racism in Australian health services [5] must cease.

Financial Problems of the Teaching Hospitals

The teaching hospitals have an unfortunate record of gobbling up more and more spending. Yet here in the West, 80% of patients in tertiary beds don’t need to be there [6]. The reasons this happens are three: first, too many tertiary beds; second the self-interest of the medical profession; and third little is done to address the inefficiency of these cathedrals. The policy is spend! spend! spend!

Increases in the numbers of doctors in this sector over the last few years have not been matched by increases in output. The gap between increases in the medical salary bill and rises in productivity is yet greater.

The real problem for the health service here lies in the extent to which senior managers and politicians listen to the AMA and the doctors generally and let them set the agenda. The failure to take a tough decision in cardiac surgery as recounted above is symptomatic of the problems in getting recognition of the need for efficiency in our tertiary hospitals.

References

1. Mooney G Let the people decide! Citizens’ juries in health. /node/&CategoryID=7. Accessed 14 October 2006

2. Mooney, G, Jan S and Wiseman V (1998) How much should we be spending on
health services for Aboriginal and Torres Strait Islander people? Editorial.
Medical Journal of Australia, 169, 508-509.

3. Mooney G, Jan S, Ryan M, Bruggemann K and Alexander K (1999) What the
community prefers, what it values, what health care it wants. A survey of South
Australians, SPHERe Report, SPHERe, Department of Public Health and
Community Medicine, University of Sydney, Sydney.

4. Houston S (2001) Aboriginal Cultural Security, Health Department of Western
Australia, Perth.

5. Henry B, Houston S and Mooney G (2004) Institutional racism in Australian healthcare, Medical Journal of Australia, 180, 517-520.

6. A Healthy Future for Western Australians (2004). Report of the Health Reform Committee (“The Reid Review”). Western Australia Department of Health, Perth.

We need to arrest the trend to a two-tier system. We are paying an increasingly heavy price for so-called ‘choice' in health care between look-alike health insurance intermediaries. We risk losing not only the health benefits but the social cohesion which is promoted by a universal system.

The private health funds including Medibank Private are price-takers in the market and are helping to ratchet up health costs. Every country in the world that has a substantial private health insurance industry has high health costs – the United States is the most obvious example. Medicare, with its buying clout, can negotiate and set rates in the market. This market strength is essential to control costs.

Health insurance subsidies are not taking pressure off public hospitals. Instead they have opened up new private demand. And the financial benefits of the subsidies are skewed in favour of the well-off. 80% of the richest 20% of Australians have private health insurance, compared to only about 25% of the poorest 20% of Australians.

Government support of health insurance funds is clearly damaging our health system. If people want private insurance, so be it, but it should not be subsidised and paid for through inefficient intermediaries which increase their premiums at about double the rate of inflation year by year. The subsidisation of private health insurance is not a health program, it is corporate welfare.

In seeking to reclaim universal health care, we do not propose that we have a free system. Payments should be according to means. Incomes for most Australians have grown substantially since Medicare was introduced 30 years ago.

Further, we do not suggest that a universal public health insurance system pre-supposes a view about whether health services should be delivered by public or private organizations. In fact, we suggest that the government subsidy to the health insurance industry would be better spent through direct funding to private hospitals. This would have provided an additional $1.2 m to private hospitals in 2003/4.

We also believe that ministers and their departments need to take more responsibility for ‘health' in its broadest sense. Too often the focus is on responsibility for health care programs. Many factors outside the health portfolio have a major impact on the health of Australians. Poverty, particularly amongst indigenous Australians, is a clear example.

We propose a major reorientation of health services in Australia through the staged development of multidisciplinary community health centres. We expect that they would be largely private centres. The decision in each case would depend on the particular circumstances. We outline the case for community health centres in our statement. These centres would be the drivers of change from a sickness to a health focus. They would also be an opportunity to reform archaic health workforce practices.

We believe that in addition to inequities, there are major inefficiencies in the present health arrangements — restrictive practices and shortages in the workforce, commonwealth and state fragmentation — and that our health care can be improved without significant increase in expenditure.

We also need to introduce countervailing power in the health sector. The debate about health resources currently only takes place between ministers and doctors. The community is excluded. The media savvy and influential are able to skew the spending of our scarce health dollars. The urgent, for example waiting lists, takes priority over the important, for example mental and aboriginal health. We need to formalise community engagement at every level in order to establish the real and informed priorities of the community in the spending of their health dollars. There are proven methodologies, such as citizens' juries, to give the community an effective voice in advising governments.

We urge the Commonwealth Government and any state or territory to negotiate a Joint Commonwealth-State Health Agreement which, with appropriate governance, would pool funds and jointly administer health programs in the co-operating state.

It is time to stop tinkering with a health sector that is coming to the end of its design life. The sector is currently held together by dedicated and professional people. They deserve better. We need fundamental reform.

We've been promised health care reform for at least the last twenty years. I have on my desk a summary of a paper that was written in 1990, after a health ministers' conference in which state and federal health ministers all put their hands over their hearts and promised faithfully that the jurisdictional inefficiencies of state and federal divisions would be addressed immediately. We all know what has happened in the following years.

The truth is that reforming our health care system is a big deal. We don't need minor changes. We don't need tinkering at the margins. We need to restructure the health care system so that it meets the contemporary needs of Australians. And to get where we want to get, to have a cost effective health care system that we can all be proud of, we're going to have to go on a journey. The encouraging thing is that when you talk to educated consumers, when you talk to health professionals, when you talk to senior policy makers and most of the bureaucrats you meet in departments of health, there is no controversy about where that journey should lead. But every journey starts with the first step, and boy has it been hard in Australia to start down that path to reform. We are currently spending too much money on a system that simply cannot deliver the outcomes that we need. No matter how much money we pour into it, the dysfunction within the system is going to gobble up those dollars without giving us what we need.

For many of us the most distressing aspect of the current situation is that our health care system is increasingly unfair. Those of us who are clinicians have watched over the last ten years and seen the deterioration in equity of access to health care services and equity of outcomes. We have moved away from that ideal which I believe most Australians very much want, the ideal of having access to a quality health care system, in a timely fashion, based on need not personal financial circumstances. Increasingly people cannot afford to see allied health professionals. Increasingly people are denied access to specialist medical care because of the costs involved and increasingly they are being seen by general practitioners who are being forced, with those people who most need quality time with them, to spend only a small amount of consultation time so that the turnstile can click through and they can earn enough money to keep things going.

The result is predictable. We have absolutely ironclad evidence that health outcomes for communities and individuals vary enormously across Australia depending on social and economic circumstances. So in the western suburbs of Sydney, people are five times more likely to die of a preventable illness than they are on Sydney's north shore. In country Australia you are eight times more likely to die if you're white and of course if you happen to be an Indigenous Australian, twenty times more likely. In a country with an 18 billion dollar surplus this inequity is surely totally unacceptable to most of us, particularly when it's not necessary. The amount of money we currently spend could extract so much more health than it does now, if we were to go down the reform pathway.

I'm afraid Australia is becoming a polarised society, in which a lot of us are ‘doing very well thank you', and yet we have increasing numbers of working poor who are not getting the help they need to stay well and to have their illnesses cared for. If I were to ask all of you ‘what is it about Australia, about our attitude to life that's different', most of us would like to think that the long-term tradition of the ‘fair go' and egalitarianism was something that characterised Australians. The way we care for each other would be something we'd like to be measured by as a contemporary humane society. And that's what we're losing at the moment.

There's a remarkable degree of unanimity about what should be done. We clearly need to solve the workforce crisis. For most of us it is distressing that despite urgings from the productivity commissioner our federal government still hasn't bitten the bullet and declared a policy of educating sufficient Australians to care for Australians. Indeed many of us feel that we should have a surplus so that we can actually be helping out in the region — rather than being increasingly dependent on 3^rd world health professionals when we all know that the ethics of that are very questionable given the need for them in other parts of the world.

The workforce situation has to be solved. Primary care is perhaps the biggest reform challenge in Australia – but one which we know is achievable over the next decade because New Zealand, Canada and the UK are well down the path. We need to swing our hospital-centric system around to the win-win situation that is available with the wellness and prevention models of health. Clinical scientists are increasingly going to have genetic tools and other similar tools to predict, not only from lifestyle history but also from genetic patterns, what issues are going to be important in maintaining the health of someone throughout life. We really need to embrace this approach which has been shown in many parts of the world to be so cost effective.

To really get the community on side with the wellness model, we have to do what we have so far been unable to interest Mr Abbott in: we have to do what other countries have done and have a contemporary dialogue with Australians about what they want from their health care system, and what it means to give them what they want. Because there's no question in my mind that Australians want more help to stay well and avoid disease and get earlier diagnoses, so that we don't have this dreadful situation where, for example, half the diabetics in Australia don't even know they have it yet.

We need to educate the community and politicians that at the moment, especially with our workforce crisis, we must rationalise what our hospitals do so that all hospitals aren't all things to all people. We need to have a network of facilities available in our hospitals, creating if you like a string of pearls.

Finally, and this is not an impossible task, we need to move away from this wretched jurisdictional dysfunction between state and federal programs. Eventually we need a third party, and probably the likely outcome would be a universal insurer that has all the different pots of money at its disposal and one set of brains looking at how to manage that.

Policy is clearly not the missing ingredient at the moment. There's a lot of contemporary thinking about this that sees ideas from health professionals, consumers and economists all fusing together. What's missing is political leadership, and perhaps not even leadership but political courage. Political courage in my experience does not necessarily come from the hearts and minds of a politician. Political courage comes when we all make it perfectly clear that we won't tolerate anything but the leadership that will allow these changes to occur.

We are at a crossroads in Australia. We have an ideological divide about health care: the federal government seems to be quite content to move to a user-pays system with a safety net for the poor, so we need to tackle that ideological divide. But I have no doubt that if we all get behind and support the sort of initiative that I'm so proud to launch today, then with a Federal election coming up we can make a difference and start on this journey which we all so badly wish to take.

We don’t have a health system in Australia — what we have is a mess of disparate elements, many of which function very well by themselves, but which don’t work together.

This is largely the result of successive governments’ attempts to fiddle at the margins. Labor governments have tried to bring in a Beveridge-style universal free system, but have always been constrained by the men of the counting houses, by treasury and finance officials and the obsession with the bottom line. They’ve tended to be half-hearted and contradictory; in the last election for example Labor championed bulk billing while happily supporting an increase in pharmaceutical co-payments. I could argue for either of those moves but only Lewis Carroll could argue for both at the same time.

I remember a time when we had a Liberal party in Australia, which had a belief in market forces. But it is now obsessed with supporting the private insurance industry, a high cost financial intermediary which stands between the consumer and the market. Private health insurance is not a market solution. Insurance of any type is a way of buying out of the discipline of market signals. I would have thought a Coalition government would be in favour of market signals but instead it is protecting the private insurers and pharmacists – the last thing it is doing is allowing a market to develop in health care. I can argue for a national socialised system or for a market system, but I cannot possibly argue for what the Coalition is trying to do because it seems to contradict any sensible set of policies.

Both Coalition and Labor governments attend to the emerging problems of the time, sometimes well but usually by doing whatever is in fashion, without going back to look at the fundamental system problems. That means an undue focus on hospitals, on the areas where there is the greatest noise and the greatest expenditure. The result is a complex mess. People within it know how their own bit works but to the consumer it is ghastly. Take the different safety nets for example:

• Some cover families while others cover individuals;
• We can have a free bulk bill or a free week in hospital but we have to pay $30 for our pharmaceuticals;
• We receive tax rebates for private health insurance but not if we use private hospitals without insurance;
• The treatment of physiotherapy has several different components in the tax and Medicare system.

It is absolutely bamboozling and as a result there is a huge misallocation of resources. Some people say ‘all you’ve got to do is sort out the Commonwealth-state issues’. Certainly that is important, but even within the Commonwealth for example, the pharmaceutical benefits scheme and Medicare don’t work together — they’re quite separate schemes. They’ve got their own safety nets, their own administrations, and their own criteria. So even within the Commonwealth there isn’t any coordination, let alone any sort of integration.

As a result of this there’s a huge amount of waste. But where there’s waste there is also opportunity, because it means that we can do a lot more with our current resources.

What we really want is a universal system. We don’t have that at the moment — we have a fragmented system. In hospital care we are rapidly developing a two-tier system; a private system funded by private insurers for the well-off, and a public system that is rapidly becoming a charity system. This fragmentation did not start with the Coalition, although they have embedded it a bit more. It really started back in the early nineties with Graham Richardson saying ‘we’ve got to do a few deals at the top end of town’. The redefinition started then, and it has become more entrenched, defining health care as charity rather than as something universal which we all share.

However, having stressed universalism, I don’t think we need to assume that a universal system is necessarily free for all. This is a question that needs to be put back to the public and the authors of Reclaiming Universal Health Care are not taking a strong line on this. The notion of a universal and free system came about in the post-war years when some therapies were terribly expensive, when incomes were generally low and when people had other priorities. There can be different levels of payment, and we can see the possibility for means tested co-payments. But we do suggest that rather than being dogmatic about how much the payments should be and whether they should be proportional or based on age or therapeutic benefit, that those co-payments should be subject to community discussion. How much should come out of our own pockets, how much protection there should be for the not so well-off, and how much should be covered by a universal, national insurer. There is scope for a combination both universal public funding with allocation based on therapeutic need as well as some market signals, whereas what we have now is a mess which has neither. In fact what we have, particularly when you look at private insurance, is an extraordinary combination of East German bureaucratic intervention and Chicago-style radical libertarian economics.

We’re arguing for a universal system shared by all, but within this system we might use a public hospital or a private hospital – we don’t see the issue of public versus private provision as particularly important. It’s largely a technical issue based on issues of market failure and whether the provider can be profitable. We do suggest however, that we don’t want to see corporatised providers. There’s a huge difference for example between a church hospital or a privately owned community health centre, and a large corporation like Mayne Nicholas or even larger multinational corporations becoming involved in for-profit health care. Whether the delivery of health care is public or private can largely be sorted out on the technocratic and pragmatic basis of where the market works best and where government works best. Where we take a strong line is on funding; funding either needs to come from people’s own pockets, which I’d call the idealised Liberal party side, or from a single national insurer, which I’d say is the Labor party preference, and of course some balance of that, because not even the most libertarian government would say that we should pay for all of our health care from our own pockets.

We need to de-link the private sector from the private insurance industry. One of the great myths which the private health insurance industry has been very good at perpetrating, and which the government has played along with, is that if we don’t have private insurance we won’t have a private sector. That is absolute rubbish. A single national insurer can fund people to use private hospitals and private resources. There is no need for this massive financial intermediary. It’s a cancer that is eating away at our health care provision, pushing up our health care costs and making them unaffordable. And an unaffordable system is inevitably an inequitable system.

Can we do it? Can we bring about fundamental change? Can we focus on primary care, redirect our funding through a single insurer, and wring our programs together to be more consumer friendly, based on demographics or consumer’s needs? It is all possible, because one of the things that Australia is really good at is fundamental policy change. It’s fascinating to look at the tremendous problems the US has encountered in trying to make even minor changes to its health care social security system. We on the other hand have an excellent history of fundamental change. Think back to the Hawke-Keating government — which brought about fundamental change in tariff protection and deregulated the finance sector, which one would never have expected from a Labor government. The Coalition government which succeeded it was also reform-minded in its early days. It fundamentally changed what was a ramshackle tax system. Strangely enough the change often comes from the party which we think is least likely to carry it out. I’m not trying to sell the virtues of those three major changes, you may or may not agree with them, but I think you have to agree that we have been very good at fundamental structural change.

I teach public policy and I often say to students ‘it’s a great idea and it would serve equity but it wouldn’t really serve economic efficiency’, or vice versa. The nice thing about health care is that we can bring about fundamental reform which serves both economic and equity objectives at the same time, because there is so much waste, so much misallocation, and above all, so much good will and energy from people involved in health care. We have nothing to lose.