John Menadue’s verdict on the health reform plan: it needs a lot more work

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John Menadue tells Crikey’s health blog Croakey that the health reform plan needs alot more work.
First published on Croakey, Crikey’s Health Blog on 5 May 2010

(Part 4 of a Croakey series on health reform)

Perhaps the current state-of-play on health reform is a good news/bad news sort of story, suggests John Menadue, Chair of the Centre for Policy Development and a longstanding advocate of health reform.

It’s good news that health reform is finally on the political agenda. But not such good news that there are so many concerns about the policies we’re getting – especially around governance.

He writes:

“There is no doubt about the political dividend in the government’s health announcements, but there are major concerns and unknowns about policy, particularly governance. But at least the government is focused on health reform. The logjam is being broken. Let’s hope the government is more successful than on climate change.

There are many plusses in the government’s announcements.

The Commonwealth Government’s acceptance of full responsibility for primary and aged care is a major breakthrough. In the long term the footnote on primary care in the COAG communiqué will be vastly more important than the headlines on hospitals. Countries that have good health systems are grounded in primary care rather than hospitals.
The substantial increase in hospital funding with a growth formula based on efficient price for service delivery in hospitals is welcome.

More decentralised administration through local hospital networks.

The national access guarantee for elective surgery should hopefully reduce the attractiveness of private health insurance that enables the wealthy to jump the hospital queue.

It is not part of the COAG communiqué, but reducing smoking is the single most effective thing that can be done to reduce sickness and lower health costs.
More announcements will obviously follow, but there are real policy concerns.

In such a political document, it is not at all clear what the underlying values and principles are. What does the government believe in?

With a 60/40 funding by the Commonwealth, the blame game should be reduced but not entirely.

The local hospital networks will be creatures of state governments who will ‘remain system managers for public hospitals’. Oops. What was that about the takeover of state hospitals!
There is no attempt to curb the spiralling demand for health services across all age groups. Costs are rising at 5% real p.a. with no sign of slowing down. See this submission to the Senate Community Affairs Committee.

There is no reform of Medicare to make it an active public insurer and not just a passive funder. Is Medicare to be scuppered by Medicare Select?  We are not told.
Anti-competitive work practices defended stoutly by the AMA and the continuing protection and subsidies to pharmacies and private health insurance are to continue.
There is no proposal to integrate public and private hospitals through restoring direct support for private hospital beds.

There is little attempt to ensure greater accountability by providers particularly GPs.
No mention is made of dental care, but perhaps it is being held for the election.

But the real unknown or omission is governance.

It is not clear how the National Health and Hospital Network will operate to integrate hospital, primary care and aged care across the country. The proposals for this network look very thin indeed.

Whilst the Australian public clearly looks to the Commonwealth Government to take greater responsibility for funding healthcare, and is increasingly sceptical about the role of the states, there is little evidence in health that the Commonwealth is able to step up to the job. The Commonwealth Government

Doesn’t effectively co-ordinate its own major health programs – the MBS and the PBS.
Has failed in leadership in e-health.
Failed to address the 19th century work practices in health – the largest sector in the economy.

Has little economic expertise in the health portfolio.

Australia needs to consider an independent, professional and statutory Australian health commission, like the Reserve Bank in the monetary policy field, to lead and co-ordinate the Commonwealth Government’s national role in health as proposed by the Business Council of Australia.  It should take over many functions of the Department of Health and Ageing. The commission of course would be subject to government policy guidelines in the same way as the Reserve Bank. The ministerial/departmental model is just too prone to pressure by special interests, eg Kevin Rudd’s secret deal with private health insurance funds.

Assuming that the local hospital networks remain almost exclusively hospital networks run by the states, we also need a joint Commonwealth-state health commission in each state, with a small secretariat in each state to pool all funds, determine a state-wide plan and fund accordingly. (See this article). State health departments should be scaled back.

The major omission in the COAG communiqué is a clear outline of governance arrangements. That is after all where the problem first began – the conflict between the Commonwealth and the states in health governance and the split between hospital and non-hospital care.”

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