First published: Tuesday, November 3, 2009

The health of patients with cataracts is being forgotten by both major parties in the debate about Medicare rebates for cataract surgery and for joint injections. The Federal Government’s main interest appears to be to save money even though it knows that some eye surgeons and arthritis specialists will not reduce their fees, thus leaving patients to pay more or simply not have the vision saving operation or the joint injections which these highly skilled health professionals can perform.

The eye surgeons and arthritis specialists are clearly putting interest in defending their own income in front of providing affordable access to patients for procedures which they know can transform their patients’ lives. Both groups of specialists earn at least three and often many times the average income of their patients, most of whom are elderly and not in paid work. For the eye surgeons there is a cut in the rebate, and it may lead to a substantial cut in income although most surgeons already require substantial copayments as well. For arthritis specialists the elimination of the rebate for injections will mean a decrease of about 5% of Medicare income and as most charge some copayments, it will thus mean a less than 5% cut in income. But the Government’s intention is clear, it wants to reduce their income, and in the case of arthritis specialists, it did so in the May budget with no consultation at all. No group of workers in the country could be expected not to object.

Thus the Government is attempting to use the suffering of patients to make selected specialists reduce their fees. The specialists have responded and are using the suffering of patients to challenge the Government’s attempt at reducing their income. It is a sad reflection on both groups that patients are a secondary consideration.  Hippocrates would be turning in his grave at the behaviour of his colleagues.  He could quite rightly be disappointed and angry at the confrontational anti-professional attitude of the Government.

But the Government continues to ignore the reason behind the problem. It has come to this because we now have many middle and low income patients relying on the private system for adequate and timely health care. When private care was just for the rich, an extra charge from the doctor was not a barrier to care. Now, for many, it is.

The weakened public hospital system upon which the majority of Australians depend for their cataract surgery and in which outpatient specialist services could be available in a timely manner cannot possibly compete with a private industry which is so heavily taxpayer funded but which is only accessible to those who can afford it. Many elderly are desperate enough to have private health cover because they don’t want to be queuing at the public hospitals to get their lives back by having their vision restored or their joints injected.

It is this taxpayer funding of the private system which sets the scene for private specialists to charge almost what they like, knowing that there are enough patients who are desperate enough to pay extra to avoid public hospital queues.

Rather than ignoring patients and attempting to control a fundamentally flawed uncapped private industry, the Federal Government must adequately fund the public system so that it can compete for patients and doctors against the taxpayer funded private industry.

Dr Tim Woodruff
President, Doctors Reform Society (also arthritis specialist)

Structural problems won’t be fixed by doubling rebates. Voluntary patient enrolment can improve access if funding varies with SES.

Our health services are struggling. For patients, even the wealthy, it can be difficult to access timely care. For all patients there is no ‘system’. They see a collection of poorly connected, differently funded services which they are expected to negotiate.

Then they see co-payments, sometimes hundreds of dollars. That’s affordable for the wealthy but try finding $40 each repeated visit if one is on a pension or the dole and paying rent. Even on a median income with rental or mortgage stress that’s not possible. These people either delay or don’t get care or join public hospital outpatient waiting lists or attend ED, either at the time or when they become very sick.

About 65% of patients are bulk billed by GPs, 40% by specialists, and 34% by psychologists using the Better Access scheme. These professionals recognise their patients’ financial hardship. Others also do but feel they must charge to make their practices viable. Some simply have no understanding of financial hardship or believe it is an individual responsibility. Some are just greedy.

According to the Grattan Institute report, GP and GP trainee numbers are increasing and Australia has more GPs than most other OECD countries. The problems are in their distribution and their utilisation to make maximum use of their skills. Patients in less wealthy areas tend to be sicker, more difficult to treat, and less able to afford co-payments. That is not attractive to most GPs or other health professionals. It needs to change.

Our health services model was designed and fit for purpose in the 1980s. Forty years later health service capacity and health needs are completely different. But we still run on the archaic 1980s model. There is an acute crisis for which some band-aids are appropriate. But the system needs reconstructive surgery, not band-aids. The biggest suggested band-aid is to double the GP rebates. This completely ignores the structural issues. It might help a bit at enormous cost. Special GP clinics are planned by the Federal Government and some States. They may help in the short term if GPs can be found.

The Grattan Institute report is about major reconstruction.  But only 1000 of the 6000 medical practices in Australia would be involved by 2026. There are things that can be done now which are about reconstruction and can improve care across Australia more quickly. These changes would set up practices to be a part of a Grattan like reconstruction.

The concept of voluntary patient enrolment with a medical practice is supported now by the conservative Australian Medical Association. It could be introduced almost immediately. For it to work one needs a benefit for both patient and practice.

The patient benefit could be a bulk billed service with priority access to appointments. A financial benefit to the practice could be given which would at a minimum need to compensate for loss of co-payments. This practice benefit should be adjusted for socio-economic status (SES).

Similar small payments to general practices are already adjusted for age and gender. Data on SES is available at the level of 60 house units. This would mean practices in areas of disadvantage would receive an immediate increase in funding and those in wealthy areas would lose nothing.

The size of this payment could be increased over time to incorporate payment for other co-located services such as physiotherapists, nurses, psychologists, and even dentists, and for time spent by all health professionals including GPs, to build a team approach to care, so challenging with the current funding model. Over time the itemised rebate for a specific appointment could be phased out for these enrolled patients, promoting even more interaction between health professionals.

Thus the system would be a fusion of fee for service for some patients and situations, block funding for other situations, and even the potential to move to salaried health professionals which is the norm in public hospitals and Aboriginal Controlled Health Centres. The bonus would be that rorting would be minimised as that requires rebates.

Whilst addressing the mess of GP and primary health care it would be timely to consider dedicated Federal funding for an increase in salaried specialists both in public hospitals and in the community. This would be in direct competition with private specialists but would address the appalling wait times and financial stress for patients who are not wealthy.

It is time for reconstructive surgery for our archaic health system. Band-aids are neither efficient nor sufficient.

 

Rorts and Revamping Medicare

This series of three articles looks at the above topic under the headings:

1. The Vision: Where could we be?
2. The Reality: Where are we now?
3. Implementation: How do we proceed with the needed changes?

The Vision: Where Could We Be?

From a patient perspective

A 45 year old woman feels vaguely unwell, tired, and achy. She books to see her regular GP at the practice at which she is enrolled. Because she is enrolled she has an appointment within a week. She’s menopausal but the GP is able to elicit more than the physical symptoms as she knows the family background and can gently probe. She needs some counselling and that isn’t a strength of this particular GP. She is referred to the on- site psychologist who works with her over several months but in discussions between the two health professionals in the corridor, they agree that her increasing weight gain might also be worth tackling more intensely and after appropriate discussion with her, she is referred to the on- site dietitian. The patient pays nothing but her taxes. There is no room for rorts.

A 65 year old man being treated for prostate cancer is discharged from the oncology unit with follow up appointments. He takes with him a discharge summary (also sent electronically), written by the registrar or senior resident, with a one to two paragraph summary of the admission, a list of alterations to all his admission medications, a summary of relevant results, prognosis (which has been discussed with him), further follow up, and a direct contact to the registrar. The summary cannot be five pages long. He sees his usual GP within a week at the clinic where he is enrolled and on his return for follow up a letter from that appointment written by the registrar or consultant is posted. It is a report on the follow up, not a five page templated report comprising his life history!

A 28 year old man from Afghanistan sees a new GP following his recent release into the community. He comes with a volunteer support worker. The GP spends an hour assessing him through a telephone interpreter service. He refers within his medical centre or nearby facilities to the full range of allied health workers needed. A case worker is assigned to him to liaise with non- medical help for housing, employment and the like. After assessments by the various professionals a case conference is arranged at which most of those involved can contribute. Even his major chronic dental issues are addressed. The patient pays nothing but once working, he will pay through taxes.  There are no rorts.

A 40 year old cyclist falls off his bike almost outside a medical clinic. His elbow is very painful. He is seen almost immediately by a paramedic trained physician’s assistant (PA) who organises an x-ray nearby and within an hour can tell the full story to one of the GPs who agrees that a non-urgent review by an orthopaedic surgeon is needed along with rest and analgesia prescribed by the PA. It takes two minutes of the GP’s time. The patient is seen at the public hospital outpatients within a month. No rorts.

A recently diagnosed 55 year old woman with diabetes has been started on insulin and needed antihypertension treatment as well. She presents to her usual medical clinic where she is assessed by the nurse and the diabetic educator, found to have a low sugar but normal blood pressure and quizzed appropriately regarding her eating times. The cause is dietary. Advice is given. The GP is consulted by the nurses and the patient is sent on her way. It takes less than five minutes of the GP’s time, just being consulted by the nurses. No rorts.

It’s a small country town which can’t attract a GP. There’s a pharmacy next to a community health centre where there is a nurse practitioner and a physiotherapist. The nearest medical clinic with GPs is two hours away. A GP visits every two weeks for the day. Patients attend daily, assessed by the salaried NP, who is authorised to arrange blood and urine tests and ECGs, initiate some medication e.g. for infections, and re-prescribe many regular medication. The NP has a direct line to the medical clinic two hours away including for after-hours calls. Compared to what existed previously this is wonderful for patients who don’t pay anything except through their taxes. No rorts

In an Aged Care Home a resident is noted to be have new mild urinary incontinence, hardly eating, and slightly confused. The nurse arranges a urine test which comes back as an infection with pyuria and no contamination so she informs the senior nurse who notes this is a somewhat recurrent problem and contacts the nurse practitioner who prescribes her antibiotics. The GP notes this at her next visit. It’s sorted. No rorts.

From a specialist general practitioner (SGP) perspective

SGPs are salaried, working full or part-time as appropriate to their choices. The medical centres in which they work are sufficiently large (except in remote areas), to also employ multiple allied health staff either full or part-time, and nurse practitioners or physicians assistants where appropriate. They are paid salaries comparable to non-GP specialists working in public hospitals. In addition to their salaries, they are supported financially to maintain continuous professional development (CPD). This would include CPD embedded in the medical practice in which they work with an emphasis on comprehensive integrated care. Salaried providers could rort by being lazy but are surrounded by a team. Little room for rorting, just like in public hospitals. Those who wish to run private practices would face the same challenges as they do today.

From a non-GP specialist and dentist perspective

Little would be different for public hospital non-GP specialists except that they would be responsible for ensuring a hugely improved discharge summary and outpatient appointment communication. Some however, may be working on salary in community medical centres.

For those who work in private practice, the only change to their non-hospital work would be that there would be less work, as public hospital non GP-specialist numbers are increased to cope with demand.

From an Allied Health Worker/Nurse/Nurse Practitioner/Physician Assistant perspective

Many would be delighted with the opportunity to work in a team with different health professionals, constantly evolving new understandings of the complexity of care, able to work to the full capacity of knowledge, training, and experience.

From the perspective of the relatively well financed patients

Private care would remain available to all. but billionaires would continue to be entitled to the full range of publicly provided health care as those struggling on the parsimonious job seeker ‘benefit’. Those who wish private hospital care would face higher private health insurance (PHI) premiums because the grossly unfair and inefficient PHI rebate would be gone.

 

Part 2

The Reality: Where are we now? 

From a patient perspective

Patients in remote areas have to travel hours to see a specialist general practitioner (SGP). In the small town there is a pharmacy and there are nurses and perhaps even a paramedic or nurse practitioner who aren’t working in their profession for all sorts of reasons who would be only too willing to help but are constrained by professional demarcation disputes based on models of care from the 1960s.

Patients in the poorer big city suburbs usually can get bulk billed services but may have to wait weeks to see a doctor and often cannot get to see their regular doctor. In more affluent areas many of the practices do provide that continuity of service but at a price which is challenging for poorer patients in richer suburbs.

Even to get a repeat prescription for a drug a patient has been on for 10 years can be a challenge. Getting to see a non-GP specialist (nGPS) is an even bigger challenge given that private nGPSs bulk bill only 33% of consultations (July 21-June 22 Medicare statistics). The alternative is to wait a year or three for a public hospital outpatient appointment, often seeing the same nGPS that would charge a $150 co-payment which forces them onto the waiting list, currently worse because of Covid.

Patients in not so remote country towns can wait weeks to see any doctor and in some areas the turnover of doctors means they build up relationships with a doctor which only lasts twelve months because the doctor, usually overseas trained, is heading for the city and spending initial time in the country just to get established.

Patients discharged from hospital may be able to get in to see their usual SGP within a week, but even then there is a reasonable chance that the SGP will either have no discharge summary or one written by a very junior hospital doctor filling in a template with pages of unnecessary information and no information on why drugs prescribed by the SGP were stopped and whether they can be started again. There may be referrals to different hospital outpatients for follow-up, but these appointments may be months away, leaving the SGP to deal with whatever issue in the meantime. This is usually done very well by the SGP but sometimes for all sorts of reasons including if it is not the usual SGP it may not be done well.

Patients with drug addiction issues struggle daily to manage their illness. Frequently there are major mental health issues as well. But so often they present to an Emergency Department which simply doesn’t have the resources to deal with them. Most SGPs don’t prescribe methadone so if that is one of their needs, they may struggle to find a treating doctor to even have methadone considered. Specialised addiction clinics exist but there aren’t enough especially outside of big cities. Often they are faced with the siloed approach where the doctor can treat the mental health issue but doesn’t treat addiction which is addressed at another facility. It’s tough enough for them to get to one source of help, let alone face a trip and repeated assessment at another.

Patients are often held back in their job seeking because they have rotten teeth and can’t afford private dental care and have been waiting five years for public care. Shame about their appearance is a powerful negative force in their lives.

Patients in Residential Aged Care facilities struggle even to get basic nursing care let alone consistent high quality medical care (until they have to go to hospital: often a completely preventable admission).

 

From a specialist general practitioner (SGP) perspective

SGP numbers are declining as there are not enough medical graduates taking on the 3-4 year training required to enter a specialty which is undervalued by many non GPSs, successive governments both Labor and Coalition, and the public. They work in an environment which doesn’t support the best use of allied health, doesn’t seriously promote a focus on prevention, and largely ignores the social determinants of health (Job Seeker being such an obvious example: poverty kills).  SGP attrition is not just due to age but increasingly due to doctors deciding to leave general practice and work elsewhere. Whilst nGPS’ incomes vary considerably, a staff specialist in NSW starts with salary of $230,000 with no practice costs. After seven years this rises to a minimum of $317,000. Non-GPSs train for 3-7 years so perhaps two years longer. When finishing one’s degree or doing internship a doctor is faced with a HECS debt of $100,000 (courtesy of Labor killing off free university education introduced by Whitlam), and a choice to go into a profession which is undervalued, very busy, and relatively underpaid. Is it any wonder that numbers are falling.

From a non-GP specialist perspective

This would depend on whether you are living the good life, working furiously, earning over $300,000, and not at all concerned that your co-payments force desperate patients onto public waiting lists and prolonged preventable suffering, or whether you do have an interest in ensuring all patients have a fair go and work hard to make that happen.

From an Allied Health Worker/Nurse/Nurse Practitioner/Physician Assistant perspective

The many such professionals who don’t work in standard fee for service businesses work in environments under pressure, sometimes sufficiently rewarding to take the pressure, but often not. Their contributions are often not valued sufficiently just like SGPs.

From a media perspective

There is a story to be told about rorting and whilst it clearly occurs, the media have failed to rely on hard evidence of the degree of rorting, partly because it is unknown. Rorting whether intentional or otherwise, should be minimised but isn’t. That is a failure of successive governments and the system they have constructed. The reality is that the media want spectacular stories and the reputation of health providers using Medicare is tarnished without adequate perspective.

 

Rorts and Revamping Medicare: Part 3

 

Implementation: How Do Proceed With the Needed Changes?

How do we move towards a humane, efficient, effective health system as outlined in Part 1 when we have a Federal Government which feels financially constrained by the long-standing belief that new spending on basic things like equitable health care is only politically and financially acceptable if such spending was promised prior to the election?

Can the Federal Government make small or moderate moves now which will not commit much money but will start the process to revamp Medicare? Can it over time, see that investment in improving Medicare is both economically and socially desirable, enabling it to embark on the bigger changes required?

Primary Health Care.

There is light at the end of the tunnel. The very conservative Australian Medical Association has come out in support of patient enrolment in primary care. Enrolment with a particular Specialist General Practitioner (SGP) or Medical Practice (MP) which may not have SGPs (the ‘may not’ being the reality in some rural and remote communities), can form the basis for reform of Primary Health Care (PHC).

For enrolment to work there needs to be an easily seen incentive or benefit to both the SGP/MP and the patient. The initial step could be to change the mechanism of funding for the many different practice and provider incentives which currently exist in general practice.

First, an enrolment fee can be introduced. This already happens for Aboriginal and Torres Strait Islander (ATSI) people.

Second, the payments for all of the various incentives need to be adjusted according to socio-economic status (SES) of the patient’s location. The information is available to reduce this to areas called MESH blocks containing 30-60 dwellings. Some of the payments are already adjusted for age and gender, so adding SES would not be a problem. This would immediately mean that providers who take on the challenge of working in areas of low SES status would receive extra funding but those in wealthier areas would not be disadvantaged. Treating an 80 year old retired judge with high blood pressure and heart disease is not as challenging or time consuming as treating a non-English speaking refugee with a dysfunctional family and a history of torture. Over time however, there needs to be increased rewards for the providers in wealthier areas. These many incentive payments can then be increased and converted into a capitation payment. It’s worth noting that New Zealand SGPs receive 50% of their income as a capitation payment.

How does the patient benefit? The initial payment for enrolment needs to be partly and variably contingent upon delivering certain levels of continuous care to the patient. This already occurs with ATSI patient payments. The additional payments could then also be made contingent on such care.

The next step could be to have the capitation payment sufficiently large to also require bulk billing i.e., a universal health system. That is different from a universal public health insurance scheme which simply gives access to an inadequate rebate i.e., Medicare as we know it. Universal bulk billing cannot possibly be introduced however, until the many practices in wealthier areas which believe they can’t manage without co-payments are satisfied that the extra funding will enable them to survive.

The final step could be to then stop fee for service payments altogether for enrolled patients, or at least to those being treated for chronic diseases. Rorting is so much harder in a salaried service.

Private Hospital and Private Non-Specialist Care

So much for primary health care. What about non-GP specialists (nGPSs) and hospital care? It should be obvious to anyone that public hospitals need more resources including nurses and doctors. A simple first start for the Federal Government which unlike the States and Territories, can print money, would be to fund more nurses and doctors in public hospitals and Medical Centres on the proviso that services are free at the point of service just like they are currently in public hospitals. Doctors and nurses work for a salary in public hospitals. There is no reason to expect that can’t continue.

To fund such a measure the obvious source of funds in the long term is the inequitable private health insurance (PHI) rebate which permits those who can afford PHI to avoid the queues the majority of Australians face at public hospitals. The rebate cannot suddenly be ceased but could gradually be reduced with the simple argument that in these financially difficult times when the Coalition is demanding an improvement in the budget, the sensible thing to do is to reallocate spending to where there is demonstrable greatest need, i.e. public hospitals. Savings could also be used to fund the other obvious area of need, primary health care. With an increased capacity of public hospitals, waiting lists might stop getting longer even as some patients are less able to afford PHI and use the increasingly better resourced public hospitals. Rorting will continue in the much less publicly subsidised, smaller private hospital and health sector.

The Big Picture

Moving from predominantly fee for service funding to predominantly salaried practice or some form of capitation would minimise the risks of rorting.

Ultimately however, the grossly inefficient debacle of Federal, State and Territories, and Local Government funding of health services needs to be addressed. A National Health Care Reform Commission needs to be established as the single funder of public health care, independent of politicians and the many stakeholder groups. Charged with distributing funds on the basis of need, it would be a long- term project. Politicians only decisions would be how much to fund the total health care budget and who to appoint to the Commission. It would require detailed population health data collected at the regional and practice level. That in turn would require defined funding to medical practices and primary health care networks to collect, with minimal imposition on front line staff.

As well as the Commission we need a restoration of Health Workforce Australia and a Preventive Health Agency because without developing our workforce nothing can happen, and without prevention we are asking for a tsunami of preventable illness and death.

The first steps could start now or at least with the next budget especially given that the first steps are not expensive. It would take vision from Labor, and it would take their call that they are the only friends of Medicare to be about action rather than rhetoric. Despite the AMA’s commitment to patient enrolment, they would object to capitation and other changes because it reduces doctors’ autonomy even if most SGPs could be financially better off. The PHI industry and private hospital industry would object because it would very simply affect their bottom line i.e., profits. But our health services should be first and foremost about patients. We need doctors, nurses, and the various other providers but the system should be there to focus primarily on patient need, not on the antiquated view of some providers as to how a 21^St century health system should be.

It is all possible. It is a process which can be started now with little cost. Our patients lives depend on reform. Our society can be healthier. We can have a health system rather than an inequitable, inefficient, unco-ordinated collection of health services. We have dedicated health providers. We are wasting their talents and both our patients and our country are losing out.

 

Rorts and Revamping Medicare: Part 3

 

Implementation: How Do Proceed With the Needed Changes?

How do we move towards a humane, efficient, effective health system as outlined in Part 1 when we have a Federal Government which feels financially constrained by the long-standing belief that new spending on basic things like equitable health care is only politically and financially acceptable if such spending was promised prior to the election?

Can the Federal Government make small or moderate moves now which will not commit much money but will start the process to revamp Medicare? Can it over time, see that investment in improving Medicare is both economically and socially desirable, enabling it to embark on the bigger changes required?

Primary Health Care.

There is light at the end of the tunnel. The very conservative Australian Medical Association has come out in support of patient enrolment in primary care. Enrolment with a particular Specialist General Practitioner (SGP) or Medical Practice (MP) which may not have SGPs (the ‘may not’ being the reality in some rural and remote communities), can form the basis for reform of Primary Health Care (PHC).

For enrolment to work there needs to be an easily seen incentive or benefit to both the SGP/MP and the patient. The initial step could be to change the mechanism of funding for the many different practice and provider incentives which currently exist in general practice.

First, an enrolment fee can be introduced. This already happens for Aboriginal and Torres Strait Islander (ATSI) people.

Second, the payments for all of the various incentives need to be adjusted according to socio-economic status (SES) of the patient’s location. The information is available to reduce this to areas called MESH blocks containing 30-60 dwellings. Some of the payments are already adjusted for age and gender, so adding SES would not be a problem. This would immediately mean that providers who take on the challenge of working in areas of low SES status would receive extra funding but those in wealthier areas would not be disadvantaged. Treating an 80 year old retired judge with high blood pressure and heart disease is not as challenging or time consuming as treating a non-English speaking refugee with a dysfunctional family and a history of torture. Over time however, there needs to be increased rewards for the providers in wealthier areas. These many incentive payments can then be increased and converted into a capitation payment. It’s worth noting that New Zealand SGPs receive 50% of their income as a capitation payment.

How does the patient benefit? The initial payment for enrolment needs to be partly and variably contingent upon delivering certain levels of continuous care to the patient. This already occurs with ATSI patient payments. The additional payments could then also be made contingent on such care.

The next step could be to have the capitation payment sufficiently large to also require bulk billing i.e., a universal health system. That is different from a universal public health insurance scheme which simply gives access to an inadequate rebate i.e., Medicare as we know it. Universal bulk billing cannot possibly be introduced however, until the many practices in wealthier areas which believe they can’t manage without co-payments are satisfied that the extra funding will enable them to survive.

The final step could be to then stop fee for service payments altogether for enrolled patients, or at least to those being treated for chronic diseases. Rorting is so much harder in a salaried service.

Private Hospital and Private Non-Specialist Care

So much for primary health care. What about non-GP specialists (nGPSs) and hospital care? It should be obvious to anyone that public hospitals need more resources including nurses and doctors. A simple first start for the Federal Government which unlike the States and Territories, can print money, would be to fund more nurses and doctors in public hospitals and Medical Centres on the proviso that services are free at the point of service just like they are currently in public hospitals. Doctors and nurses work for a salary in public hospitals. There is no reason to expect that can’t continue.

To fund such a measure the obvious source of funds in the long term is the inequitable private health insurance (PHI) rebate which permits those who can afford PHI to avoid the queues the majority of Australians face at public hospitals. The rebate cannot suddenly be ceased but could gradually be reduced with the simple argument that in these financially difficult times when the Coalition is demanding an improvement in the budget, the sensible thing to do is to reallocate spending to where there is demonstrable greatest need, i.e. public hospitals. Savings could also be used to fund the other obvious area of need, primary health care. With an increased capacity of public hospitals, waiting lists might stop getting longer even as some patients are less able to afford PHI and use the increasingly better resourced public hospitals. Rorting will continue in the much less publicly subsidised, smaller private hospital and health sector.

The Big Picture

Moving from predominantly fee for service funding to predominantly salaried practice or some form of capitation would minimise the risks of rorting.

Ultimately however, the grossly inefficient debacle of Federal, State and Territories, and Local Government funding of health services needs to be addressed. A National Health Care Reform Commission needs to be established as the single funder of public health care, independent of politicians and the many stakeholder groups. Charged with distributing funds on the basis of need, it would be a long- term project. Politicians only decisions would be how much to fund the total health care budget and who to appoint to the Commission. It would require detailed population health data collected at the regional and practice level. That in turn would require defined funding to medical practices and primary health care networks to collect, with minimal imposition on front line staff.

As well as the Commission we need a restoration of Health Workforce Australia and a Preventive Health Agency because without developing our workforce nothing can happen, and without prevention we are asking for a tsunami of preventable illness and death.

The first steps could start now or at least with the next budget especially given that the first steps are not expensive. It would take vision from Labor, and it would take their call that they are the only friends of Medicare to be about action rather than rhetoric. Despite the AMA’s commitment to patient enrolment, they would object to capitation and other changes because it reduces doctors’ autonomy even if most SGPs could be financially better off. The PHI industry and private hospital industry would object because it would very simply affect their bottom line i.e., profits. But our health services should be first and foremost about patients. We need doctors, nurses, and the various other providers but the system should be there to focus primarily on patient need, not on the antiquated view of some providers as to how a 21^St century health system should be.

It is all possible. It is a process which can be started now with little cost. Our patients lives depend on reform. Our society can be healthier. We can have a health system rather than an inequitable, inefficient, unco-ordinated collection of health services. We have dedicated health providers. We are wasting their talents and both our patients and our country are losing out.

 

 

First published: Tuesday, November 23, 2010

Since before the last election we have been promised a root and branch analysis of the health system and a plan to fix public hospitals. We don’t even have a health system. Instead we have multiple poorly connected pieces For our patients there is the public hospital system, the publicly subsidised private hospital system, the GP system, the community care system, the publicly funded private allied health system, the mental health system, the publicly funded private dental system, the public dental system, the Aged Care system, and a myriad of other poorly connected pieces of a nightmare for our patients to negotiate.

Things started off badly when it became clear that the root and branch analysis would leave out the public funding of private hospitals through the PHI rebate and other charges. Three years of reports and discussions, from the National Health and Hospitals Reform Commission, the National Preventive Health Taskforce, and the Primary Health Care Reference Group, has been the basis for the Federal Government’s recent plans, most of which is contained in the two documents: A National Health And Hospitals Network For Australia’s Future1, and A National Health and Hospitals Network: Further Investments in Australia’s Health2.

It is important to distinguish between the reform plans much of which won’t be implemented until 2014, and the extensive funding promises extracted by the States directed at specific areas of the health system where major problems have been identified. These funding promises will not be discussed in detail because they are not reform.

The reform plan agreed to at the recent COAG meeting concentrates on funding arrangements between Federal and State Governments, with the clawback of 30% of the GST revenue from the States to be spent by the Federal Government on both its hospital funding and its takeover of all primary care and aged care. This is a significant change to Federal/ State arrangements. The GST issue however, despite it being politically quite contentious, has little bearing on the overall funding of the hospital or health system.

The funding commitment from the Federal Government is for 60% of the cost of any inpatient activity based on an average cost of the specific activity eg pneumonia, hip replacement, heart attack. This would then mean that if the States agree to a particular level of activity, the Federal Government is locked into funding 60% of the price as determined by a Pricing Committee. If the States do not commit to sufficient activity (40% funded by themselves) to achieve national standards, this should be highlighted but the real consequences of such failure to achieve targets remains unclear. In addition, the Federal Government has committed to funding 60% of the cost of outpatient services, research and training, and 60% of the cost of planned new capital investment although the later requires agreement between the two levels of Government.

This commitment to a specific share of funding from the Federal Government is a major change. That is positive after years of seeing a historical 50/50 funding commitment ignored. A new entity, the Pricing Tribunal, will be established to determine ‘efficient pricing’, and will be appointed with agreement by Fed and State and Territory Governments. which should result in a reasonably independent and transparent entity. Its terms of reference for its determinations will need to be agreed by both Federal and State and Territory Governments. One of the claims for the new funding model was that it would address the fact that health inflation is increasing faster than State Government revenue. Unfortunately, whether the States are contributing 40% or 60% of hospital costs, this funding model does not address the issue in the long term. Unless the Federal Government increases hospital funding over time towards 100%, States will eventually find it impossible to fund hospitals. With the extra funds promised, this will not happen in the life of any current parliament so perhaps that’s why the States have not pointed out this long term failing of the model.

Three key planks of hospital reform are the commitments to activity based funding, national performance indicators, including targets for waiting times for Emergency Departments and for elective surgery, and the development of Local Hospital Networks.

Activity based funding is a well established mechanism for apportioning funds in Victoria. It removes that proportion of hospital funding from political interference, but it is far from perfect. The reform proposal recognises that it fails when applied to small hospitals and has made allowance for that. The proposal does not recognise the higher costs of treating patients of low socio-economic status, and is an inadequate model for funding high cost low volume admissions such as intensive care. In Victoria where such funding has been used for 15 years there are all sorts of mechanisms to deal with this inadequacy. However, the experience to address that issue exists and should be manageable, but is a potential problem for State Governments who may have to bear the associated costs without support from the Federal Government. It also sets the scene for gaming, the prioritisation of predictable admissions over the more difficult to categorize admissions on which a hospital may lose financially. Adherence to national benchmarks may be used to reduce that problem.

Local Hospital Networks (LHN) are to be formed but the size of these networks is yet to be determined. Whilst increased clinical involvement in governance has been proposed, the details are yet to be developed. Consumer or citizen involvement has not been mentioned. These networks will have to negotiate with the State and Territory Governments to determine activity targets which will then determine funding. Thus, State and Territory Governments retain control. Such networks already exist in Victoria so it isn’t new and despite the rhetoric, the Victorian system is still plagued by long waits for elective surgery and for Emergency Department services. This fact underlines the point that problems in public hospitals are multifactorial, and the formation of networks as outlined may do very little to improve hospital performance.

The development of national performance indicators and targets is to be commended, is long overdue, and can be used to improve efficiency. It is proposed that these will apply to public and private hospitals and to primary care. The nature of the performance indicators will be determined by both levels of government in consultation with clinicians. This data will be publicly available, and will relate to access, safety and quality, and financial performance and efficiency. No mention is made about adjusting this data according to the presence of co-morbidities or socioeconomic status or other well recognised variables which make a significant difference to simple measures of performance. The potential for comparing apples with oranges is huge. The recent Productivity Commission report on public and private hospitals struggled with this issue and regarded its own conclusions as ‘experimental’ at least partly because of the paucity of data3.

The proposal states that ‘The Commonwealth will also work with the states to measure the time between referral and getting on the waiting list, with the aim of incorporating this into the measurement of patient waiting times’2. An indication of commitment to meaningful performance indicators would be the immediate replacement of grossly misleading elective surgery waiting times with this more accurate measure, especially in relation to the setting of targets.

Achievement of performance indicators and targets depends on at least two factors. The efficient use of funds and resources is clearly needed. Adequate reso
urces however, are also crucial. The suggestion in the proposal that funding should in some way be tied to achievement of targets has the potential for gross inefficiency. Performance indicators have been used by States for years. They have been tied to funding, and, in the absence of adequate resources, have resulted in gaming which politicians desperately try to ignore. In Victoria for over three years it has been generally known by those involved and interested that Emergency Departments have invented virtual wards as the desperately try to meet unachievable clearance targets. Thus, a patient waiting for something over which the staff have no control eg an empty inpatient bed, may be reclassified as having left the Emergency Department even though the patient hasn’t moved. Persistent investigative reporting finally resulted in the Minister agreeing that this was an issue, as was manipulation of waiting list data. When bureaucrats are faced with potential loss of funding they will be very inventive in an understandable effort to maintain funds in the interests of the institution for which they work. Even since the exposure of virtual wards, patients are now moved around the corner into other areas which are designated to be not in the Emergency Department despite being funded and staffed by the Emergency Department. The other perverse effect of targets is that patients who would normally be categorized as very low priority are treated before their priority warrants because they can be dealt with quickly and targets can be more easily met. Money and staff time is wasted working out how to achieve unrealistic targets, to the detriment of patient care. Auditing will go some way to reducing this problem but the linking of funding to performance is of great concern, and the demonstration that it results in improved performance indicators may be completely misleading.

The proposal suggests that ‘enhanced data collection and reporting ……………will provide rich information for clinicians to be able to reflect on their own practices and drive continuous improvement’1. This use of data respects the professionalism of doctors, nurses, and other staff, and of the bureaucrats, most of whom are very keen to provide the best possible service. They will know if the targets are unachievable because of lack of resources. They can compare their situation with other like hospitals. Financial punishments or rewards ignores and overrides this professionalism and is asking for trouble.

The development of national standards and the monitoring of such standards and performance indicators will require a bureaucratic national body and is an absolute necessity for the reform process. The fair determination of efficient pricing will also require a new structure. The development of Local Hospital Networks will also be a new level of bureaucracy but in both NSW and Victoria structures which partly or completely fulfil this task already exists so in such states the amount of bureaucracy may not alter. In States where hospitals run independently there will be an increased bureaucracy.

The proposals recognise that two important causes of public hospital dysfunction, inadequate primary care, and insufficient Aged Care capacity, need to be addressed. The central proposal for primary care is the takeover of all funding and policy setting from the States (except Victoria). This should lead to simplified responsibility and reduced duplication of services and bureaucracies. General policy setting should be a national function as well, but investing a remote Canberra bureaucracy with the responsibility for the development and implementation of specific programs at a local level will be a continuation and expansion of the current heavily bureaucratic, poorly accountable and unresponsive system which drives health providers to distraction. It is not uncommon for such providers to be funded through forty different programs, and to have staff dedicated just to applying and accounting for funds instead of delivering care. The rhetoric has been ‘a national system that is funded nationally and run locally’2. The development of 60 primary health care organisations, to be called Medicare Locals covering an average of 400,000 people is proposed to address this. No structural reform of funding at the local level is proposed. Instead, the Locals are charged with co-ordinating and integrating services, and ‘better target(ing) services to respond to …… gaps’1. The concept is very promising but whilst funding and policy decisions are controlled centrally these organisations will struggle to have a significant impact, especially on issues of equitable access. This is a long way from the structural reform required to enable services to be ‘run locally’, and to be responsive to local needs.

Whilst improving access and reducing inequity is a stated priority area for the Federal Government, the best they have proposed to address this general problem are some very specific and welcome initiatives for the elderly, those with mental illness, and indigenous Australians. The rest get nothing. The major structural barrier to equitable access ie fee for service plus copayments, is ignored. Needs based funding to regions is ignored.

Performance indicators for primary care are to be introduced but it is unclear whether these will be at a Locals level or smaller, and unless primary care has the resources to achieve targets, such indicators, especially if associated with financial incentives, are likely to lead to gaming, inefficiency, and perverse behaviour which may result in decreased quality of care overall. For example, achieving access targets in areas of workforce shortage is simply impossible. Achieving improved diabetic control in patients who find cost is a barrier to seeing the doctor or nurse, buying the medication, or even buying the right food, is much more difficult in some areas than others. Local factors tend to be ignored in pay for performance use of indicators.

The introduction of voluntary enrolment and capitation fees for diabetics introduces two very good principles ie encouraging patients with chronic diseases to have one medical team, and moving away from payment for single episodes of care, a move which encourages the development of team based care. It addresses a disease which accounts for 30% of preventable admissions to hospitals and ignores the other 70%. It fails to address the problems of those patients who can’t find a doctor or can’t afford to see a doctor or buy the drugs. Without control of copayments, there exists a perverse incentive to avoid difficult patients and a means to do so. The most needy will continue to miss out.

The extension of funding for practice nurses to urban GP clinics (previously only for rural and remote) is appropriate and long overdue and may improve access by allowing GPs to concentrate on more complex issues, but will do nothing for financial barriers to care4.

The other factor affecting hospital function which is addressed by the proposals is that of Aged Care. Capacity constraints mean that many patients wait in hospital for Aged Care places to become available, contributing to ‘access block’ Funding has been provided to increase the provision of such places. This is not reform. It is an appropriate but still inadequate response to a long standing and well documented problem. Taking over 100% responsibility for funding Aged Care is reform and means that, combined with the Federal G commitment to 60% funding of public hospitals, it does have a financial incentive to improve Aged Care. Taking over control of delivery of Aged Care services has the same potential negative consequences as its takeover of primary care. It ignores its mantra of national funding, local control. Improving payments for GPs to see patients in Aged Care facilities is not reform. It is an appropriate and belated response to a well documented problem. Aged
Care facilities struggle to attract adequate staff. Staffing requirements are inadequate to control quality. Remuneration for staff is inadequate to attract quality staff. Once again, performance indicators can be measured and published, but unless resources are available, targets will not be met without gaming. So, the issue has been referred to the Productivity Commission. Meanwhile, public hospitals will continue to care for patients who should be in Aged Care facilities, or should never have needed admission from such facilities.

Both workforce numbers and distribution are well recognised by the Federal Government as issues which must be addressed. The proposals invest significantly in training place numbers for GPs and specialists, but have not as yet addressed nursing shortages. The increased training places will be needed to cope with the major increase in medical graduates which has resulted from previous Government decisions and this investment was inevitable. It is important, but is not reform. The distribution issue is very clearly documented in the proposal. This has been addressed with more programs to attract doctors to rural areas. Variations on such programs have been in existence for 15 years at least. Some are useless, some help a little, but until the fee for service plus copayment system of funding doctors is questioned, doctors will continue to congregate in the richer larger urban areas where their income is assured. This structural barrier to better distribution of workforce has been ignored. With all Medicare and PBS funding dependent on the presence of a doctor, the distribution of all of this funding will continue to follow the inverse care law ‘the least needy get the most, and the most needy get the least5
One factor affecting public hospital performance is completely ignored by the proposals. There is a shortage of specialists in these hospitals and no shortage in the private hospitals next door. Specialists have many reasons to work less in public hospitals but must have somewhere to work instead and the publicly subsidised private hospitals provide them with an alternative. There has been a definite reduction in specialist hours spent in public compared to private hospitals since the growth in private hospital work over the last ten years but no mention is made of the contribution of Federal Government policy through changes to community rating and funding support for private hospitals at the expense of public hospitals.

The adoption of many but not all of the recommendations of the Preventive Health Taskforce is welcome as this targets several of the most obvious areas requiring investment. The funding commitment to this area remains below 2% of spending however, despite the rhetoric about how we must move from a medical model of illness to a social model of prevention and wellness6.

In the political battle to get State and Territory acceptance of the financial reform, a total of $5.3 billion over 4 years was committed to Aged Care, primary care, hospitals, and workforce issues with $3.4 billion of this to hospitals. This is about a quarter of the shortfall to hospitals if the 50/50 funding arrangement was restored but, if the 60% funding arrangements can be set in place in less than 4 years, the changes could result in an effective restoration or even increase in the Federal component of the 50/50 arrangement (allowing for the GST). The additional funding extracted from the Federal Government should not be seen as reform however. It is a partial move toward the historical funding arrangement and has the capacity to benefit patients in the short term. Another sweetener in the package was increased funding for mental health as part of the Federal Government taking over full responsibility for primary care including mental health. Whilst desperately needed and welcome, the increased funding is program based, controlled from Canberra, and desperately short of what is needed. Local control is not part of the package.

Nursing workforce, dental care, mental health, and the major issue of social determinants of health have not been part of the reform discussion. This does not bode well for these issues ever becoming an integrated part of health reform.

The Federal Government’s knowledge of the inefficiencies, inequities, lack of quality control, and poor integration of the predominantly publicly funded parts of the health system appears reasonably comprehensive as reflected in its two documents. The exclusion of the publicly subsidised private hospital sector and private allied health sector from most of the discussion indicates a lack of commitment to comprehensive reform. The proposed solutions to the problems demonstrate some very good principles such as national funding, national standards, local control, patient enrolment, capitation, and primary health care organisations. The documents do not reflect an understanding of the structural issues which form the basis for the problems outlined. Without that understanding however, the proposed solutions will fail to adequately address many of the problems. Equitable access to care in rural, remote, and poorer outer urban areas is an obvious example, with inequities perpetuated by adherence to a fee for service payment system completely dependent on provider availability. Safety nets and programs fail to correct these inequities and the proposals ignore the necessary structural reform and needs based regional funding7. Centralised control of policy implementation in primary care and aged care will not address local needs nor facilitate integration and teamwork, essential for a patient centred approach. Tacking on another dental health plan (if it ever comes) will not integrate dental care with other care nor achieve equitable access. Powerful LHNs will dominate relatively weak Medicare Locals and result in a hospital focused approach to care rather than a strengthening of primary care.

Despite the partial adoption of many good principles, the total package to date is disappointing. Some of the building blocks to improvement are proposed but if this is all there is to the biggest structural change to our health system since the introduction of Medicare then we can expect a continuation of inequities, inefficiencies, and a continuing nightmare of uncoordinated care.

1. A National Health And Hospitals Network For Australia’s Future, http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/nhhn-report-toc

2. A National Health and Hospitals Network: Further Investments in Australia’s Health. http://www.health.gov.au/ accessed 28/4/10

3. Public and Private Hospitals Productivity Commission Research report Dec 2009.
http://www.pc.gov.au/projects/study/hospitals/report

4. Building a 21st Century Primary Health Care System. Australia’s First National Primary Health Care Strategy. Commonwealth of Australia 2010 http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/report-primaryhealth

5. The inverse care law. Lancet, 27 February 1971 Julian Tudor Hart

6. Taking Preventative Action A Response To Australia: The Healthiest Country By 2020 The Report Of The National Preventative Health Taskforce http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/report-preventativehealthcare

7. Putting health in local hands: Shifting governance and funding to regional health organisations
Tim Woodruff, Fiona Armstrong, David Legge, and Rod Wilson. Centre for Policy Development.
http://cpd.org.au/

8. The Rudd hospital plan – many pitfalls to avoid on the way to a better health system
Kathy Eagar eMJA – Rapid Online Publication 24 March2010 http://www.mja.com.au/public/rop/contents_rop.html

9. The Rudd reforms: a poisoned chalice in the long run
Jeff R J Richardson eMJA – Rapid Onlin
e Publication 24 March 2010
http://www.mja.com.au/public/rop/contents_rop.html

First published: Tuesday, February 15, 2011

The proposed health reform will do little to address the most pressing needs of our most needy patients.

THE federal government’s recent rhetoric has been that hospital funding formulas are of little interest to patients looking for care. Yet the emphasis in the new reform plan is about hospital funding.

The federal government has agreed to match new state funding 50/50, but that won’t happen until 2017. Also, no extra funds will be made available until 2014, so the current 39/62 split will continue for another three years. And because the new arrangements only apply to new funding, it will be 2030 before the split is 44/56. Therefore patients must wait.

Tough national standards are proposed, one of which is waiting times for surgery. But the plan ignores waiting times to actually get to see the surgeon and be put on a waiting list. One of my patients who needs spinal surgery has already waited a year just for an outpatient appointment. That time is ignored when measuring waiting times for surgery. Once seen she may only wait six months for surgery, but her real waiting time will be ignored because the Commonwealth government refuses to acknowledge the reality. Waiting times are a joke.

Another proposed standard is to reduce the time patients wait to be treated by emergency departments. But for years hospitals have been cheating to meet such standards for state governments and will continue to do so when faced with unrealistic targets and inadequate resources.

While the Prime Minister may believe that the biggest challenge facing our health system is that it is running out of money, the truth is that the biggest challenge is that there is no system.
Patients are faced with the nightmare of negotiating the public hospital system, the publicly subsidised private hospital system, the general practitioner system, the community care system, the publicly funded private allied health system, the mental health system, the publicly subsidised private dental system, the public dental system, the aged care system, the private specialist system, the public specialist outpatient system, and a myriad of other poorly connected pieces.

Structural reform to integrate these systems is required, but is not suggested in this plan. Instead, relatively powerless regional organisations called Medicare Locals will be charged with co-ordinating this maze of primary care services. The new plan abandons proposals for the Commonwealth to take over all primary care funding so the added barrier to co-ordination will be a continuation of different sources of funding.
Hospital-centric Local Hospital Networks will address just the public hospital side of hospital care. The two entities are then to be expected to work together to integrate services despite their completely different interests and funding streams.

The funding silos for all those systems will remain intact and ignored by a government intent on avoiding any significant structural reform of the primary care sector (GPs, nurses, allied health, dental), the dental sector, or the private hospital sector.

Ensuring equity or a fair go hardly gets a mention. Instead, the approach is to address gaps in services. Under the new plan the Medicare Locals will more quickly address the issue of after-hours access than was previously planned. They are charged with filling the gaps that a flawed system reveals.

But nothing is done to address the reasons why such gaps exist. More important, little is suggested for the 32 per cent of sick Australians who, according to the Commonwealth Fund, fail to see a GP or get tests or fill out prescriptions because of costs. This is despite the fact those facing financial barriers tend also to be those with the worst health outcomes.

Financial barriers to access are almost totally ignored by these proposals. Indeed, the Commonwealth government imposes such barriers for prescriptions.

Despite the rhetoric, a better deal for our most needy patients does not appear to be the priority under this new plan. Financial and geographical barriers will remain, perhaps increase, and there is no vision for an integrated health system.

The obsession remains efficiency, an important principle if it is about health outcomes, but one from which patients will not benefit if it is about throughput or how much is done. The most needy will continue to get the least care.

Tim Woodruff is vice-president of the Doctors Reform Society.

First published: Friday, July 22, 2011

Health reform was flagged as a major part of the election commitment of Federal Labor when it came to power in 2007. After input from a range of inquiries the Federal Government finally made some proposals which faced substantial resistance particularly from state governments. Following Council of Australian Government (COAG) meeting earlier this year substantial agreement has been reached on what is proposed. It is now being implemented gradually.

There are two distinct parts to what the Federal Government has done and is doing. Firstly there are funding commitments to various parts of the health system. Much of this should not really be regarded as reform as it is simply a recognition of the need for more funding.  Substantial increases in workforce have been funded but this is just recognition that there is a shortage. It is not reform. The federal share of public hospital funding had fallen from about 50% to 39% since 1996 as states had increased funding in response to need and the Howard Government had not matched the increase. The proposed increased funding for hospitals will lead to a 44/56 Federal/States split by 2030. This is not even a return to previous funding levels. It is definitely not reform.

Inefficiencies

There are reforms however and reform is desperately needed to address both the inefficiencies and the inequities of the so called health ‘system’. There is no system. Patients are faced with the nightmare of negotiating the public hospital system, the publicly subsidised private hospital system, the GP system, the community care system, the publicly funded private allied health system, the mental health system, the publicly subsidised private dental system, the public dental system, the Aged Care system, private specialist system, the public specialist outpatient system, and a myriad of other poorly connected pieces. Structural reform to integrate these systems is required but is not suggested. Instead, relatively powerless regional organisations called Medicare Locals (MLs) will be charged with co-ordinating the maze of primary care services. The new plan abandons proposals for the Commonwealth to take over all primary care funding so the added barrier to co-ordination will be a continuation of different sources of funding from federal, state, and local governments and other sources.  In addition another entity, hospital centric Local Hospital Networks (LHN) will address just the public hospital side of hospital care. The two entities are expected to work together to integrate services despite their completely different interests and funding streams. The funding silos for the myriad separate systems the patient encounters will remain intact and ignored by a Government intent on avoiding any significant structural reform of the primary care sector (GPs, nurses, allied health, dental),  or the private hospital sector. This approach could be likened to applying a bandaid to a bleeding fractured leg. Will patients notice?

Hospital Funding Mechanisms/Performance Indicators

There are also reforms to how public hospitals are funded.  Firstly, the amount of federal funding will be dependent on how many patient s with particular conditions are treated. This is already the basis for funding in Victoria. Implementation nationally will be challenging and the net result may be improved efficiency but there are potential problems paying for throughput rather than outcomes, as there is a perverse incentive to do more rather than do better. National standards are proposed however, and this can go some way to mitigate this problem. The concern regarding standards and targets is that there is no evidence of a commitment to useful targets and the intention is to use these targets or standards to ‘punish’ hospitals financially.  One such target is waiting times for surgery. It ignores waiting times to get to see the surgeon and be on a waiting list. My patient needing spinal surgery has already waited a year just for an outpatient appointment.  That time, which may end up being 2 years, is ignored when measuring waiting times for surgery. She is almost housebound.  Once seen she may only wait  6 months for surgery, but her real waiting time will be ignored because the Commonwealth Government refuses to acknowledge the reality.  Waiting times are a joke. Another proposed standard is access time to be seen in Emergency. But for years hospitals have been ‘gaming’ such standards for State Governments and will continue to do so when faced with financial penalties for failing to achieve unrealistic targets using inadequate resources.

Barriers To Access

In addition to the challenges of negotiating the health system, patients are also faced with financial and geographical barriers to access. Medicare ensures universal entitlement but not universal access. The most obvious shortage of health professionals is in poorer urban areas and rural areas. Whilst governments of all persuasions have developed programs and projects to address these issues, the approach is always to avoid the underlying structural problems in our health system which guarantee that patients can’t find a doctor. These reforms hardly mention ensuring equity or a fair go. Instead, the approach is to address gaps in services.  Under the new plan the Medicare Locals will more quickly address the issue of after hours access than was previously planned. They are charged with filling the gaps which a flawed system reveals. More importantly little is suggested for the 32% of sick Australians who, according to the Commonwealth Fund, fail to see a GP or get tests or fill out prescriptions because of costs. This is despite the fact that those facing financial barriers tend also to be those with the worst health outcomes. Financial barriers to access are almost totally ignored by these proposals. Indeed, the Commonwealth Government imposes such barriers for prescriptions. Meanwhile, financial support for those who can afford private health insurance premiums continues to increase, enabling those lucky people to quickly access private hospital care, dental care, and allied health care in the community.  The rest wait or go without.

Geographical barriers to access are recognised in the proposals and in previous policies, with many programs to increase workforce and to encourage workforce to areas of shortage. But these efforts ignore the dominant funding mechanism in our health system which is to direct Medicare rebates through providers for services rendered (ie fee for service), irrespective of whether those providers are in areas of need. This funding structure imposed by government attracts providers to rich urban areas where copayments can be afforded and health need is least. Thus, well intentioned programs to attract providers to areas of greatest need work in direct opposition to this basic fee for service funding structure, but the Government’s plan ignores this strikingly inefficient and inequitable situation.

Mental Health

In this year’s budget significant new funding for mental health was promised. This was belated recognition of the parlous state of funding for this sector. In addition however, there was recognition that fee for service funding of psychologists introduced several years ago was very popular but was not as well directed as it could be. In other words, it wasn’t getting to many of the most needy who faced unaffordable copayments or lived in areas where there were inadequate numbers of psychologists. The reform was to change the funding mechanism. If only there was recognition of this problem across the whole fee for service Medicare rebate system, we could begin to move towards an equitable health system.

Conclusion

The Health and Hospitals Reform Commission in its interim report suggested three possible structural changes to the funding of our health system. The Federal Government initially chose the least radical ie taking over all responsibility for primary care. It reneged on that at COAG this year so we are left with a reform plan with minimal structural changes to the system despite system wide inefficiencies and inequities. Whilst some patients will most probably notice some benefits from welcome initiatives like electronic health records, the most needy will continue to face financial and geographical barriers to access and few will notice the hoped for integration of services. The obsession with efficiency appears to be more about throughput rather than health outcomes and there is no vision for an equitable system.

In five years time I suspect I will see my patients facing exactly the same problems as they do now, unable to find a doctor they can afford, negotiating the maze of professional services, or waiting at home  in pain on narcotic pain killers, trying to get onto a public hospital waiting list because they weren’t smart or rich enough to get publicly subsidised private health insurance.

Tim Woodruff

Vice President

Doctors Reform Society

First published: Friday, July 22, 2011

Inequalities in health outcome and health status are very obvious in Australia despite the continuing increase in life expectancy and decline in infant mortality. One could argue that inequalities are inevitable. We are not born equal and we can never have and nor might we want equality. When inequalities are due to potentially remediable differences in our society however, the issue is one of equity. This is an issue of social justice. It is also a reflection of the overall health of our society. Trends over the last decade makes one wonder whether our policy makers and society as a whole are content to simply tackle gross inequity in a piecemeal fashion rather than tackling the much more challenging task of aiming for equity.

Males from the poorest fifth of Australians have a mortality rate 80% higher than the richest fifth and for females the figure is 50%. Much, but not all of this difference is related to the increased mortality of indigenous Australians. Over decades mortality rates for all socioeconomic groups are declining but when one compares the poorest with the richest, the ratio is increasing, especially for males. Our society is becoming more unequal in terms of mortality. The same pattern emerges if one compares the differences between those from inner urban areas with areas of increasing remoteness. Importantly, as well as differences between the extremes, there is a gradient of increasing mortality as one moves down the socioeconomic ladder or into more rural and remote areas.

What leads to these remediable differences? The first reason is the variability in timely and affordable access to appropriate services. The Australian Bureau of Statistics 2009 survey of patient experiences found that up to 10% of Australians delayed or avoided seeing a doctor or getting a prescription because of cost. If we survey sick Australians, the figure is 34%. Despite these figures Federal Government policy is that everyone will pay copayments for prescriptions. Costs to see a doctor exist because the Government continues to fund doctors through fee for service Medicare rebates with the added condition that the doctor can charge a copayment of any value. Whilst only 20% of GP consultations have a copayment the figure is 70% for specialists. As well as these cost barriers many patients can’t find a doctor because of the uneven distribution of the workforce. Whilst many factors over which the Government has no control contribute to this, the primary funding system (Medicare rebates) pays doctors to work where they wish rather than where there is the greatest need.

The second explanation for these differences is a group of factors called social determinants.
These factors include access to income, education, housing, employment, health care, and many others but fundamentally all these factors affect the perception of control over one’s life. Evidence suggests that income inequality in rich nations is the most important single factor affecting health and well being. Thus there is a clear gradient of greater levels of health and well being correlating with decreasing levels of income inequality measured by comparing the income of the top 20% with the bottom 20%. Whilst this does not establish that simply decreasing income inequality will address the problem it does raise that possibility. It is of deep concern that on most comparative measures of disposable income over the period 1994 to 2008, there has been increasing inequality in Australia.

There is no doubt that at the highest levels of government the issue of inequitable access has been recognised for decades. More recently there is evidence of an increasing understanding of the importance of social determinants, best illustrated in the approach to indigenous health.

There have been several approaches to address the issue of inequitable access. Safety nets have been devised, expanded, and revised. In addition to safety nets, governments have developed many programs over the years to target particularly disadvantaged groups. Many charitable groups provide programs to target disadvantage. In addition, doctors are crucial in addressing disadvantage as they decide which of their patients belong to the group of deserving poor whom they will therefore bulk bill rather than charge a copayment. The need for safety nets, targeted programs, and charity are a reflection that the structure of the system is flawed. But nothing is done to address the structural flaws in the system. Copayments which stop people accessing services are the prerogative of the provider, a prerogative given to the provider by the Government. For prescription medication the copayments are imposed by Government despite the evidence that they reduce access. The capacity of doctors to be largely publicly funded through fee for service Medicare rebates and work where they wish, rather than where they are needed, is supported by Government. This is not an approach which aims for equity, it is one which accepts some degree of inequity and is satisfied with the aim of reducing gross inequity.

The World Health Organisation’s Commission on the Social Determinants of Health (CSDH) recommends several key approaches. Firstly an improvement in daily living conditions with an emphasis on early childhood development, fair employment and decent work, having a universal social welfare system, and universal health care. We are doing reasonably well in most of those areas although particular groups are still missing out a lot. But in terms of universal health care, the evidence about inequitable access indicates we have universal entitlement but not universal access.

The second key approach recommended by the Commission is to tackle the inequitable distribution of power, money, and resources, which requires ‘a strong public sector that is committed, capable, and adequately financed’. This is not evident in our health system. Instead we see continuing taxpayer support for the expanding private hospital system, and increasing corporatisation of pathology and radiology services. In addition primary care (general practice etc), has previously run as multiple very small publicly subsidised private businesses, controlled by one or two providers. That is changing as the size of practices increases (not necessarily a bad thing) but with that change a more robust business model is required. The Government shows no concern as the profit motive of publicly listed companies determines how such practices are run and what financial barriers to access are acceptable to the business. Primary care is becoming more privatized, weakening the required strong public sector.

Improving employment and long term plans for improved housing affordability and availability will help to address the inequitable distribution of power, money, and resources. There seems to be a reluctance however, to address structures which guarantee inequitable income distribution and therefore power. Thus, despite the Henry tax review which did have improving equity as one of its intentions, the Government has made only minor changes in the budget this year and the tax changes attached to the climate change policy are aimed at ensuring inequities do not increase rather than decreasing the current inequities.

Education is crucial to equity. The basic funding structure in primary and secondary education continues to support inequitable access to high quality well resourced schools. Despite lots of programs and projects to address these issues the Federal Government continues to fund the richest schools in the nation with money which could be spent on the most disadvantaged schools.

There does not seem to be sufficient recognition that there are fundamental structural barriers to equity in our society, particularly in the health and education systems and in income
distribution. There also appears to be a lack of recognition of the social gradient, which therefore supports the concept of targeting the most disadvantaged and ignoring those structural barriers.

Instead, the approach to health inequities appears to be largely focused on targeted programs, safety nets, and other forms of charity. The other concern about a reliance on charity is that it deflects those interested in equity from pursuing that idea through the much harder to achieve structural reform. Those who spend all their time in charity work including well targeted programs, feel they are doing the right thing. They are. But whilst they may believe strongly in equity, they have no time left for the pursuit of the big changes required. Politicians who start off with ideals of equity must turn into practical people, doing what is possible. Thus, even the well intentioned target gross inequity and feel they are doing well, and then they ignore or have no time and energy to address the structures which are amenable to change. The changes required to tackle the root causes of the inequity are major, but well within the power of governments. What is being done is minor if not minimal. For other politicians, targeting gross inequity is perfect as they don’t actually believe in equity, and much prefer the idea of charity, which fits well with their belief in a class based tiered society.

There is recognition amongst our politicians that to achieve health equity one needs to address both the health system and many factors outside the health system. There is a failure of recognition however that heath inequity follows a social gradient, and structural change is required to address this issue. A targeted approach to the most affected groups ignores this gradient and ignores the structural causes of the inequities. Indeed, one could view the approach of relying just on targeting as another form of charity, striving to reduce gross inequity but ignoring the goal of equity.

Dr Tim Woodruff
Vice President

First published: Monday, August 1, 2011

In the May Budget there was a major mental health funding initiative. There were some small cuts to current programs, and significant expansion of others. Two of the programs affected are aimed at providing short term psychological treatment. What do the changes tell us about the direction of Government policy?

The Better Access initiative was introduced in 2006 and finally recognised the importance of psychologists in the treatment of mental health disorders. Funding is through a fee for service Medicare rebate for each visit to the psychologist at the bequest of a GP who receives a rebate for collating a Mental Health Plan. Whilst each visit to the psychologist generates a Medicare rebate, it is different from the fee for service arrangement for seeing GPs, or specialists, or having surgery, in that the number of visits with the psychologist is capped. Ten sessions and it’s over. It is very popular and the number of patients involved has been increasing about 20% per year.

Another initiative introduced in 2003 also recognised the importance of psychologists and funded access for short term psychological treatment. This program (ATAPS) is tiny, less than $50 million per year compared to Better Access which costs about $550 million per year. Funding for ATAPS is completely different. The money is distributed to Divisions of General Practice (now Medicare Locals) to administer in ways which suite that Division. The amount is largely determined by population. The aim however, has been to provide services to groups which had been identified as not accessing much care at all, ie rural dwellers, young people, and indigenous Australians.

There are significant differences in the programs which in part reflect the funding mechanism. ATAPS delivers 45% of its services to people in rural and remote Australia. Better Access delivers 25%, similar to the delivery of other Medicare rebate services. Patient copayments are zero for over 75% of patients in ATAPS and where they do exist they are between $5 and $20. For Better Access however, only 35% of psychology consultations have no copayment and the average copayment is $35. Given these figures it is not surprising that use of Better Access is 10% lower for the poorest fifth of the population compared to the richest. That should be of concern as it is well recognised that health status and outcomes are inversely related to socioeconomic status.

One might however, regard the programs as complimentary. That is the Federal Government view. Better Access provides the majority access to psychologists and ATAPS picks up the pieces. ATAPS is the safety net for the fundamentally flawed funding mechanism of Better Access. Fee for service with copayments almost guarantees some patients will not be able to afford the treatment. The capacity to charge fee for service plus copayment contributes to providers staying in areas where they can get copayments, rather than working in poor and rural areas. With continued financial and geographical barriers to access guaranteed, the safety net of ATAPS is crucial.

It all sounds very familiar. General GP and specialist services in the community have been funded that way since Medicare was introduced. Safety nets and targeted programs abound but financial and geographical barriers to access persist. The ABS Patient Survey 2009 showed that 6.4% of average Australians delayed or didn’t see their GP because of cost. The Commonwealth Fund Survey of sick Australians showed that 23% didn’t see the doctor or get follow up because of cost.

Apart from problems with access, there are other concerns with Better Access and with fee for service funding generally. The first is the issue of flexibility to meet local needs in innovative ways. It is identified by the report on ATAPS by the Department of Health and Aging

`The current ATAPS initiative enables Divisions to utilise a model of service delivery that meets local needs Better Access, as with all Medicare subsidised services, offers a universal model (that is the same model for the entire Australian population) and does not have the flexibility to be modified to meet the needs of sub‐populations. It is recognised that Better Access mental health services are not always accessible to all consumers’

The second is the issue of overservicing. This is a potential problem with any professional trained to manage a problem. There is the possibility that such a professional can have more faith in his/her knowledge and skills than the evidence suggests is justified. This can be exacerbated by patient expectations that something should be done. It is compounded by the often siloed nature of medical practice. Thus in the United States it has been found that one in every eight non urgent but quite dangerous and invasive heart procedures for patients at risk of heart attack were not really justified by the evidence. In Australia it’s been shown that following a heart attack one is much more likely to get an operation in a private (fee for service) hospital than in a public hospital next door. The same concerns exist for both the Better Access and ATAPS. The uncapped and siloed nature of the Better Access program combined with the fee for service remuneration for providers makes that even more of a concern when compared to ATAPS.

The May Budget cut Better Access funding in two ways. Firstly it reduced the rebate for the GP assessment, partly because the evidence indicated that the assessment was generally taking much less time than anticipated. Secondly it reduced the number of psychology consultations from 12 to 10, partly because the evidence was that the average need was for only 6 sessions. Clearly these cuts were also about saving money.

In addition, the funding for ATAPS was doubled (still very small). This was recognition that a better safety net was needed. Overall, the changes are minor. They do move more in the direction of equity and efficiency but there is no underlying aim to achieve equity. The cut to the rebate for the GP assessment ignores the fact that many GPs working in the most difficult areas use this large rebate to cross subsidise the psychologist eg through reduced rental fees for the psychologist. But that is of no concern to a bureaucracy intent on saving money. It also is a further reflection of the flaws in the funding model.

Safety nets are only needed when the basic structure is flawed. Better Access has delivered some great care to many people. Almost every new health funding program will help some people. Even the PHI rebate and the Extended Medicare Safety Net have helped some people access services they would not otherwise have accessed. But do we want an efficient use of health funds? Or do we want to keep on chasing the gaps in service left by a flawed funding structure? ATAPS, a fundholding arrangement rather than a fee for service system, delivers to the most needy. It could be expanded slowly to be a major component of our health system. The allocation of funds could be on the basis of need rather than just population. The resistance to such an expansion will continue from the AMA because it is seen as a potential threat to the independence of doctors. This is despite the fact that health care is increasingly complex and requires the cooperative approach that is facilitated by fundholding and frustrated by siloed practitioners. The resistance by Government to such an expansion reflects a belief that safety nets and programs are the way to address problems, that targeting the worst is the way to reduce inequity. It probably also reflects a belief that private provision of services under fee for service, rather than the much more obviously public provision under fundholding is the right way to go, despite the evidence of the demonstrated failure to achieve equity after over 20 years fiddli
ng trying to address the problems of such total reliance on fee for service funding. The alternative is to aim for equity. Equity is not equality. It is addressing the preventable causes of inequality. It is not about targeting the most disadvantaged. It is about removing any disadvantage that is due to systemic factors over which we have control. That is possible, and we can do it by looking at major structural changes to how we fund our health system. Gradually increasing our use of fundholding and decreasing our dependence on fee for service warrants much more serious consideration than it has been given to date.

Tim Woodruff
Vice President
Doctors Reform Society

First published: Wednesday, August 24, 2011

In their final report in 2008, the Commission on Social Determinants of Health (CSDH) called ‘on the World Health Organisation and all governments to lead global action on the social determinants of health with the aim of achieving health equity.’ (CSDH 2008)
The report of the Commission had three main recommendations.
1. Improve daily living conditions
2. Tackle the inequitable distribution of power, money, and resources
3. Measure and understand the problem and assess impact of action

It also emphasised that health and illness follow a social gradient and that it is not just about addressing the most disadvantaged.

This essay discusses the situation in Australia in relation to the first two recommendations. It assumes a knowledge of the well documented inequities in health outcome and status in this country

Improving the daily living conditions involves an emphasis on early childhood development, fair employment and decent work, having a universal social welfare system, and universal health care. In Australia a comprehensive framework for early childhood education and care is being implemented. Recent policies are intended to improve employment, especially amongst the disadvantaged. Our social welfare system is well targeted but there is evidence it is far from generous compared to other rich countries, despite the fact that child poverty levels in Australia are higher than the mean for 20 rich countries (Unicef 2010).

The Commission regards the provision of universal health care as an essential part of improving daily living conditions and health care as ‘a common good rather than a market commodity’. We have a universal health system which guarantees entitlement but not access. There are significant financial, geographical, physical, and cultural barriers to access across Australia. A survey of 7000 Australians by the Australian Bureau of Statistics (ABS) found that 6.4 % delayed or did not see a general practitioner (GP) in a year because of cost, 10% delayed or did not see a specialist because of cost, and 9% delayed or did not obtain a prescribed drug because of cost (ABS 2009). Rather than looking at the general population, the Commonwealth Fund survey from 2005 was performed on sick Australians, those who had recently been hospitalized, had surgery, or reported health problems. In this group who are the very ones whose access should be facilitated by a health system, 34% described access problems due to cost. Thus, 22% didn’t fill a prescription, 18% did not see the doctor when sick, and 22% did not get recommended test or follow-up (Schoen 2005).

Geographical barriers to access continue despite many targeted programs to improve distribution of the workforce. Using the Australian Standard Geographical Classification (ASGC), the Productivity Commission found that population to practitioner ratios in very remote areas for GPs, dentists, and physiotherapists are about 20% that found in major cities but importantly there is a steady gradient of decreasing availability as one moves from major cities, through inner regional, outer regional to remote and very remote (Productivity Commission 2005).

Whilst there are many factors contributing to the unequal distribution of the medical workforce, most of these factors are largely or completely out of control of government. The method of funding however is determined by government. It has chosen to persist with fee for service plus copayment as its main funding mechanism. This inevitably contributes to the medical workforce distributing itself in areas where copayments can be afforded, and where lifestyle choices of the workforce are optimised. Although many programs have been devised to counteract this poor distribution of workforce, the success of such programs will always be limited as they are working in direct conflict with the major funding structure.

The main funding of health care outside public hospitals in Australia is through fee for service plus copayment. This applies to most GP services and specialist services, private hospital services, and increasingly now to psychologists, nurse practitioners, physiotherapists and other allied health professionals. Thus health professionals paid in this way are free to provide publicly subsidised services wherever the market will support them and at whatever level of copayment the market will support. Financial and geographical barriers to access are inevitable. This structure reflects a view of health care as a market commodity rather than a common good. Rather than addressing this structure, the government is expanding it to more groups and entrenching inequity. This basic funding structure is ripe for change.

The distribution of power, money, and resources is seen by the Commission as a key structural driver of conditions of daily life.

We know from Wilkinson that income inequality correlates with health and well being status (Wilkinson 2010). We also know that on most comparative measures of disposable income over the period 1994 to 2008, there has been increasing inequity in Australia (ABS 2008). But the approach of the Government to the inequitable distribution of power, money and resources is limited although well directed in parts. Thus, improving employment, long term plans for improved housing affordability and availability, etc will all help to address these inequity issues. Changes resulting from the recent budget are very directly aimed at redistributing income but are minor and will directly affect only a small number of people. Income inequality will only be marginally affected and then mainly for those who can be employed.

The Commission states that to tackle this issue requires

‘ a strong public sector that is committed, capable, and adequately financed’ (CSDH 2008).

Such a requirement is not evident in our health system. The Minister for Health noted recently that there was a 9 year high in uptake of private health insurance and welcomed the continued growth (Roxon 2011). This growth occurs because of the perception by the public that the public system, particularly the hospital system is increasingly inadequate. What about a strong public sector for primary health care? Primary health care is largely publicly funded but predominantly runs on a small private business model. Between 2003-4 and 2007-8 there was over 20% increase in Emergency Department presentations, with no change in the make-up of the triage categories. 13% were non urgent and 46% semi-urgent (Australian Institute of Health and Welfare 2010). The increase in Emergency Department presentations for problems which could be addressed in general practice would suggest that our publicly subsidised private primary health care system is failing as patients default to the Emergency Departments. The way general practice is both structured and functions is changing. There has been a 51% decrease in home visits from 1997 to 2007 (Joyce and Piterman 2008), and a 37% decline in the proportion of GPs working in practices that provide their own after-hours services (Britt 2010), contributing to the use of Emergency Departments. In addition, there is an increasing need for a more robust business model as the number of solo practices decrease and the number of large practices of more than 10 GPs increases (Britt 2010). Corporate entities have become increasingly involved in these larger practices and some are publicly listed companies whose bottom line is profit (Friedman 1970). Primary Health Care Ltd is one such company which rose to prominence in the early 2000s as a profitable bulk billing GP chain at a time when bulk billing rates were falling across the country. In 2009 this company abandoned bulk billing in many of its clinics (Invest Smart 2011). By that time it had diversified into radi
ology and pathology. The decision to abandon bulk billing and impose a barrier to access was financial, but clearly not directly related to the level of the rebate as the rest of the country’s GPs had taken the bulk billing rate up almost to the historic high of 80% (Medicare Australia 2010). Such corporate entities are not part of a strong public sector but are publicly funded private entities. This trend to increasing corporate involvement which is mirrored in radiology, pathology, and private hospitals, is not indicative of a Government presiding over a strong public sector.

More broadly there exist inequalities in access to education, housing, and employment opportunities (Argy 2006). Education funding structures are controlled largely by government. Despite some moves to address the complicated causes of inequitable access to educational resources, the basic funding structure in primary and secondary education continues to support inequitable access. Thus, the Federal Government continues to fund the richest schools in the nation with money which could be being spent on the most disadvantaged schools. These and other factors contribute to inequities in health outcomes

There are a variety of ways in which these different inequities are addressed in Australia. Charitable organisations frequently help the most disadvantaged, for housing, employment, education or access to health care. Another form of charity is exemplified by the doctor or other health professional who chooses not to charge a copayment (bulk bill) or another type of professional who goes way beyond the expectations of their position to help the disadvantaged. The third form of charity comes from government. It is the system of safety nets introduced to address the gross inequities in access to health, quality education, housing, food security, and all of the other social determinants. Such safety nets are required because the societal structures result in inequities. Many of these structures are largely or entirely due to government policy eg, a copayment is required for pharmaceutical but 22% sick Australians don’t fill a prescription because of cost (that’s even with a safety net).

Governments frequently correctly identify disadvantaged groups and introduce programs or projects specifically targeted to such groups. Such an approach is entirely appropriate when combined with addressing the structural drivers of such inequity. This approach aims for equity. When targeted programs are not combined with addressing the structural problems however, the approach is aiming only to reduce gross inequity. In such situations, one could consider programs as yet another form of charity, picking up the pieces resulting from structures of the government’s own making.

The approach to the vexed question of the health of indigenous Australians has demonstrated an understanding of the broad range of factors contributing to health inequity. Recent funding for mental health with targeted funding initiatives across different areas including housing, education, and employment, is a recognition of the range of social determinants, and the mechanism of funding does begin to address the structural problems of funding through fee for service (National Mental Health Reform 2011). The inclusion in the functions for Medicare Locals of a population health approach is also encouraging (Department of Health and Aging 2010), but to date there is no evidence of the recognition of the structural barriers to equitable funding and access with which Medicare Locals will have to contend to fulfil its multiple functions. Whilst these initiatives are encouraging the general approach to health care and health reform has been to ignore the structural drivers of inequity whilst addressing some areas of gross inequity.

The Federal Government has appointed the Australian Social Inclusion Board (ASIB) which states its task as:
It is the main advisory body to the government on ways to achieve better outcomes for the most disadvantaged in our community and to improve the social inclusion in society as a whole (ASIB 2008)
It is puzzling that the task of the Board does not seek to achieve better outcomes (health or other) for all, given the very clear gradient of health outcomes documented previously. This gradient means that for example those in the 2nd highest quintile for health outcomes are still disadvantaged compared to those in the highest quintile.

There does not seem to be sufficient recognition that there are fundamental structural barriers to equity in our society, particularly in the health and education systems and in income distribution. There also appears to be a lack of recognition of the social gradient, which therefore supports the concept of targeting the most disadvantaged and ignoring those structural barriers.

Instead, the approach to health inequities appears to be largely focused on targeted programs, safety nets, and other forms of charity. The other concern about a reliance on charity is that it deflects those interested in equity from pursuing that idea through the much harder to achieve structural reform. Those who spend all their time in charity work including well targeted programs, feel they are doing the right thing. They are. But whilst they may believe strongly in equity, they have no time left for the pursuit of the big changes required. Politicians who start off with ideals of equity must turn into practical people, doing what is possible. Thus, even the well intentioned target gross inequity and feel they are doing well, and then they ignore or have no time and energy to address the structures which are amenable to change. The changes required to tackle the root causes of the inequity are major, but what is being done is minor if not minimal. For other politicians, targeting gross inequity is perfect as they don’t actually believe in equity, and much prefer the idea of charity, which fits well with their belief in a class based tiered society.

There is recognition amongst our politicians that to achieve health equity one needs to address both the health system and many factors outside the health system. There is a failure of recognition however that heath inequity follows a social gradient, and structural change is required to address this issue. A targeted approach to the most affected groups ignores this gradient and ignores the structural causes of the inequities. Indeed, one could view the approach of relying just on targeting as another form of charity, striving to reduce gross inequity but ignoring the goal of equity.

Argy F (2006). Equality of Opportunity in Australia: Myth and Reality. The Australia Institute: Discussion Paper Number 8 April 2006 ISSN 1322-5421.

ABS (2008). Household income and income distribution 2007-8 6523.0

ABS(2009). HEALTH SERVICES: PATIENT EXPERIENCES IN AUSTRALIA, 2009 4839.0.55.001

AIHW (2010) Health services series Number 34. Australian Institute of Health and Welfare Canberra Cat. no. HSE 84 Australian hospital statistics 2008-09

Australian Social Inclusion Board (2008) http://www.socialinclusion.gov.au/Partnerships/Board/Pages/default.aspx

Britt H et al (2010). General practice activity in Australia 2000-01 to 2009-10: 10 year data tables. General practice series no. 28. Cat. no. GEP 28. Canberra: AIHW. Viewed 26 March 2011 <http://www.aihw.gov.au/publication-detail/?id=6442472440>.

Commission on Social Determinants of Health (2008). Closing the gap in a Generation. World Health Organisation. Commission on Social Determinants of Health FINAL REPORT

DOHA (2010b), Medicare Locals – Discussion Paper on Governance and Functions . accessed 27/01/2011 at http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/MedicareLocalsDiscussionPaper

Friedman M. The New York Times Magazine, September 13, 1970

Invest Smart (2011). accessed on 29/3/2011 at http://www.investsmart.com.au/shares/asx/Primary-Health-Care-PRY.asp

Joyce C et al (2008). Trends in GP home visits. Australian Family Physician Vol. 37, No. 1, pg 1040

Medicare Australia (2010). Accessed 29/3/2011 at http://www.health.gov.au/internet/main/publishing.nsf/Content/Medicare+Statistics-1

National Mental Health Reform – Ministerial Statement. ISBN 978-1-74241-449-2
Publications Number D0364

Productivity Commission (2005), Australia’s Health Workforce, Research Report, Canberra

Roxon (2011). DOHA accessed on 29/3/2011 at http://www.health.gov.au/internet/ministers/publishing.nsf/Content/mr-yr11-nr-nr027.htm?OpenDocument&yr=2011&mth=02

Schoen C, Osborn et al (2005). Taking the pulse of health care systems: experiences of patients with health problems in six countries. Health Aff (Millwood). Jul-Dec; Suppl Web Exclusives:W5-509-25

UNICEF (2010), ‘The Children Left Behind: A league table of inequality
in child well-being in the world’s rich countries’, Innocenti Report Card 9,
UNICEF Innocenti Research Centre, Florence

Wilkinson R and Pickett K, 2010, The Spirit Level, Penguin Books, p 21-2

First published: Monday, February 20, 2012

The biggest threat to Private Health Insurance (PHI) and the private hospital industry is a strong public hospital system which has the confidence of the public. The carrot and stick approach of successive governments playing with the PHI rebate and Medicare Levy Surcharge has made little difference to PHI uptake.

The family of my patient with a wrecked hip is considering paying for 2 years private health insurance (PHI) so that he can have his wrecked hip replaced. They can’t easily afford it on low/middle incomes with families. He definitely can’t afford it. Instead he relies on narcotic pain relief which constipates, nauseates, and confuses him. He’s not on the waiting list yet despite my referring him to a major metropolitan hospital 6 months ago. It might be another 6 months before he’s assessed by a surgeon and finally gets on a waiting list which could mean another year’s wait till surgery. Once he gets into the public hospital I’m quite confident he will get excellent care, as good as or better than at a private hospital. If he had cancer or another immediately life threatening condition he would quite appropriately jump the queue and receive excellent and timely care.

The Howard Government introduced the Medicare Levy Surcharge in 1997. It was the stick designed to punish higher earners with an extra 1% tax if they didn’t take out PHI. It had no effect. By 1999, PHI coverage had fallen from 50% in 1985 down to 30%. The stick was softened in 2009 by raising the threshold at which it cut in. Despite concerns from the industry and Coalition that the sky would fall in PHI coverage rose slightly over the next 18 months. The stick does nothing except raise revenue.

The 30% PHI rebate was introduced in 1999 as a carrot. Over the next 12 months there was a 1% increase in coverage. It didn’t work.

There was however, another stick lurking in the cupboard. Fear. In 2000 the Federal Government funded an advertising blitz from the PHI industry to promote the rebate and private hospital care. By default it was designed to erode public confidence in the public system. It worked. It was combined with a penalty if one didn’t join PHI before a certain age. More fear. Coverage rose from 31 to 45%. To further justify that fear the Coalition Government began to let its share of public hospital funding decline from the historic 50/50 split with States. By 2007 when Labor came to power the Federal/State funding split was about 40/60. To its credit Labor has injected substantial extra funding into public hospitals. It has not however, committed to a restoration of the 50/50 Federal/State funding split. Instead, it has committed to such a split for new funding only. So, by 2030 the split will still be 44/56. My patient might still be waiting.

Whilst means testing the PHI rebate will remove some upper class welfare and improve the budget bottom line, it will do nothing to help my patient and many like him. Fear however, is very motivating.  Whilst some of this fear is about the quality of care there is no evidence that such fear is justified and many doctors would recommend a public hospital before a private hospital for complex problems because they know the care is better in the public system. PHI advertising however, can play on that fear and the Federal Government does nothing to address it. The other fear is that of timely access. Once again this is generally unjustified if one has a life threatening illness. Indeed, access to a public hospital for a life threatening illness like pneumonia is probably better than to a private hospital, especially if the patient is elderly, as private hospitals don’t like patients taking up beds for long periods without needing an operation of some kind to generate more income for the hospital. As my example shows however, fear about timely access for non life threatening problems such as joint surgery, cataracts, and the like is quite justified.

The public system is not managing this issue of elective surgery well for a variety of reasons: demand has increased as our capacity to intervene has increased; Federal Governments have not matched the increased funding provided by State Governments to address that demand; 10% of admissions are for problems which could have been prevented by better care in the community but the Federal Government has initiated only small changes in community care to address this issue; the second most common cause of preventable admission is inadequate dental care and if the Greens had not persisted that issue would have been postponed; up to 10% of hospital beds are occupied by patients awaiting Aged Care places which is predominantly a Federal responsibility; there is a shortage of hospital specialists in public hospitals, but not in the private hospitals next door where resources abound courtesy of the PHI rebate.

The changes to PHI are reasonable but tinker at the edge of a two tiered system. My patient won’t notice. It is hardly surprising that the Coalition would support a two tiered system of health care. It is disappointing that the Labor Party which introduced Medicare has no plans to improve the public hospital system sufficiently to allay the fear in the public mind.

Tim Woodruff

Vice President

Doctors Reform Society

Consultant Rheumatologist (Arthritis Specialist)