The dangers of American-style health reforms for Australia

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The Productivity Commission has flagged in its recently released Review of National Policy Reforms, 2005 that ‘major changes could be made to the roles, responsibilities and funding arrangements’ of the Australian health system. One ‘possible option’ is permitting, or even requiring, those who can afford it to leave the public system, and be treated privately. Everyone else would remain in the public health system.

The main problem with this suggestion is the high risks of a two tiered system. This is contrary to longstanding ideological, ethical, economic, egalitarian and possibly constitutional principles that Australians hold strongly.

It would mean that Australia would move away from the present system to one which was more akin to that of the United States of America. On a relative basis investment will flow into the private sector and out of the public sector. The private sector will have everything anyone needs – technology, the most recent drugs, the best specialists – and the public sector could easily, even predictably, run down into a third rate endeavour.

We will be more steps toward a US-style system, with all its characteristic deficits and disadvantages. No other developed country sees the United States model as an exemplar to be emulated.

The Productivity Commission should heed the lesson that the US system is much less productive and economically efficient than Australia’s, and, for that matter, other developed health systems. The World Health Organization and OECD have made this point repeatedly.

Chart one

Chart one

Recent data underscores this point. The US spends more per capita than does Australia on health care (almost twice the amount, adjusted for cost of living differences in 2001 – see first chart) for no better health outcomes, morbidity or mortality rates. America’s health system is perceived less favourably than Australia’s almost every time any group is surveyed. In the case of the most recent data, Americans are significantly less satisfied with their system than Australians are with theirs (51 per cent satisfied compared to 88 per cent in the case of a knowledgeable group, hospital executives) (see second chart).

Chart two

Chart two

American patients report their system to have higher care co-ordination problems (eg, had to tell multiple health professionals the same story (57 per cent of US patients, 49 per cent of Australian patients), received conflicting information from health professionals (26 per cent compared to 23 per cent), sent for duplicate tests (22 per cent compared with 13 per cent) and records or tests did not reach my health professional in time (25 per cent compared with 14 per cent)) (see third chart).

Chart three

Chart three

American patients report facing greater access problems due to cost than do Australian patients (see fourth chart). This includes not getting medical care (28 per cent compared with 16 per cent); tests, treatments or follow-up (26 per cent compared with 16 per cent); or filled prescriptions (35 per cent compared with 23 per cent). Rather than receive better care, American patients report that they were more likely to receive a medication or medical error than their Australian counterparts (see fifth chart).

Chart four

Chart four

Is this the system we should move toward? The data are unambiguous – we should not increase the Australian private health sector at the expense of the public, move to create a two-tiered system, or emulate the American health system. It would threaten the health of many Australians to do so.

Chart five

Chart five

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