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In 2005 when Health Minister Tony Abbott addressed the Centre for Independent Studies on the topic 'What if we could start again?' he said, ‘In health the challenge is not so much to dream big dreams and think radical thoughts. The challenge is to solve practical problems.’
But the subsidisation of private health insurance has already put us on the path of radical change — a path that leads to a two-tier system, with costly private services for the privately insured and under-funded public services to mop up the leftovers. It leads us, in short, to an American-style system — at a time when US spending on health is almost double our own, yet US health indicators are only on a par with those of the poorer OECD countries.
Echoing the values and principles outlined in Our Common Wealth, A Health Policy for Australia: reclaiming universal care argues that we can restore universalism and increase both equity and efficiency in health care – at no additional cost to the taxpayer.
Private insurance is weakening the government’s ability to use its bargaining power to control costs. We need to restore and embed universalism before it becomes too late to avoid an expensive American-style two-tier system. A universal system not only promotes social cohesion; it is also the fairest and most cost-effective option available.
A Health Policy for Australia calls on federal and state ministers and their departments to:
>> Download A Health Policy for Australia (pdf)
This document is intended to provide a starting point for the
development of more detailed proposals and program designs. We invite
stakeholders, CPD readers and contributors and others to give us
their own ideas, either through comments, or by contributing an article
for publication in InSight.
The launch of this paper was covered by The Australian (Call for a single health care insurer) and the then Shadow Health Minister Julia Gillard commended our contribution to the debate in a statement on the day. This was followed by discussion in parliament by Julia Gillard and Tony Abbott of our criticism of the private health insurance rebate.
The launch was also covered by The Age, the West Australian, SBS Radio and the NSW Nurses Association Journal. An article by Nick Coatsworth in Policy, the magazine of the Centre for Independent Studies, discusses our proposal for a shift to a single, universal insurer. ('Australia's State of Health', Policy, CIS, Vol. 22 No. 4, Summer 2006-07)
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Comments
Comments on A Health Policy for Australia
There are many good features of this document, and the authors are to be commended for promoting debate in an area which is arguably the most difficult territory for major policy reform in the country.
But there are several key weaknesses in the document which will mean it won't generate the breakthrough in reform that we want.
1. The 'single national insurer' concept is out of sync with the community-based, consumer empowerment framework for reform that the authors say they are committed to. A move to a mega-Medicare is at adds with most of the innovative developments in Australia and internationally in this field.
For instance, some indigenous communities who want to take control of their health care have for some time been 'cashing out Medicare' to provide a bucket of money with which to purchase their preferred mix of services. They are combining funds from federal and state programs, including Medicare on a capitation basis, to do this.
There is a rural community in South Australia currently exploring the same path.
Communities around the country should be able to 'cash out Medicare' in this way to develop some real purchasing power in health care. Aggregating consumer purchasing power is the key to rolling back the virtually unchecked market power of providers (doctors, specialists, public and private hospitals).
Historically, Australia once had a network of consumer entities of this sort in the form of the old friendly societies, which contracted with GPs and hospitals on behalf of their members. Ironically, it was the move to 'national insurance' between 1910 and 1950 which killed off these consumer entities.
We need to go back, and forward, to a network of multiple, values-based, community-driven consumer entities to drive a consumer empowerment agenda and genuine competition in health care, rather than a single national insurer.
2. Stronger primary care will only develop in practice when we have consumer entities of this sort able to develop and finance integrated care plans for their consumers.
A start would be to enable consumers with the top ten chronic illnesses to receive a bucket of money, drawn from several program funds, held by a consumer entity of their choice to provide at least some of the following:
- an integrated portable information record for each consumer
- a home care plan
- a care self-management and health maintenance plan
- a capacity to purchase clinical, acute and post-acute services
- a capacity for integrated data collection and assessment on real care costs
Without entities with these capacities, primary care will remain tangential in the Australian health system. It is tangential because there is no structural entity around which care plans, self-management strategies and preventative measures can be built.
Viable health promotion and illness prevention has to be built into the work of these entities. With no structural vehicle for building it, health promotion currently sits in a vacuum.
3. The question of agency is not addressed in A Health Policy for Australia. Who is the agency for change in health reform, what are their incentives and motivation, and how can it be sustained?
Consumers are the only agency for fundamental reform, and the organisation and development of consumer entities can, and should, be undertaken now, in the present, rather than at some unspecified point in the future following the arrival of favourable political circumstances (whenever that is).
For instance, some indigenous health organisations are already doing some of these functions, and can develop further in this direction.
Some industry and union health plans, and some of the union health funds, could easily develop in this direction, since an existing membership and some aggregated purchasing already is in place.
Building up consumer power on the ground gives reformers an immediate focus on putting in place the foundations for change. To simply advocate government-initiated commissions and authorities to do this work, is to postpone the creation of consumer power to the never never.
A Health Policy for Australia is right in saying that consumers are the only drivers for fundamental health reform. It is wrong in saying, curiously, that there are no institutional obstacles for reform - there are massive institutional obstacles for reform, principally the private and public sector provider interests. The public sector obstacles to reform need to be named, as much as the private sector opponents, but the authors tend to be hesitant on this front, and name only the private sector interests as being hostile to consumer interests.
Consumer empowerment, through consumer entities with real purchasing power, is the only feasible strategy for going around these entrenched provider interests.
Vern Hughes
vern@civilsociety.org.au
Single national insurer
If health care providers did not have such strong market power, if there were no "moral hazard" (i.e. incentive for overservicing) in insurance arrangements, if insurance were administratively low-cost and provided only by not-for-profit organizations, and if it were affordable to all, then I would agree with Vern.
But that's a big set of conditions, very unlikely to be met.
Fragmentation of insurance is the mechanism which has led to such ghastly inequity and inefficiency in the US and in other countries which have gone down the path of private insurance.