John Dwyer

Credible scientific evidence of clinical effectiveness should underpin the delivery of health care. Satisfactory health outcomes and cost effectiveness require this approach. In Australia however pseudoscience flourishes as regulatory bodies fail to protect consumers from health care fraud and a massive industry prospers as it convinces consumers to use expensive supplements they do not need. In this three part examination of the issue the extent of the problem is examined, as are the changes that would better protect consumers.   (more…)

 

At last the clouds are dispersing, the sun is shining through and one can see a splendid vision of a restructured primary health system that meets the needs of contemporary Australia. For the first time that I can remember, there is a consensus among informed consumers and health professionals that enthusiastically supports the introduction of “Patient-Centred Healthcare Homes” as the primary care model we need to deliver cost effective and equitable integrated primary care. The model has been or is being implemented in eleven OECD countries and the results are most encouraging. Just published is a position paper from a “roundtable” exercise involving The Consumers Health Forum, the George Institute, the Royal Australian College of General Practice, the Menzies Centre for Health Policy, Sydney University and the Australian National University. Their support for the model echoes that of the AMA and the Royal Australasian College of Physicians. I am providing this impressive list of supporters, as consensus on healthcare reform in Australia has been held captive by vested interests for so long. (more…)

 

Clearly the future of Medicare was the election issue of greatest importance for most Australians. Community concern was focussed on the possibility that the primary care they receive from their general practitioner might be privatised such that a superior service would be available to those who paid more, either directly or though the extension of private hospital insurance to allow for coverage of GP services. This was never going to happen but its important to understand what it was that had stimulated discussion of the possibility. Private health insurers, who are not permitted to cover services provided with Medicare dollars, are frustrated as community health services are not reducing the number of their insured who need hospital care. Many insurers see 60-70% of their costs generated by 5-10% of their insured who need frequent stays in hospital. As there is much evidence that primary care systems elsewhere are better than us at reducing the incidence of hospital care, they would like to provide these superior services to those they insure. To do so would cost a fraction of the expense needed for hospital care. (more…)

 

In the last eighteen months our coalition government has repeatedly warned that the rate at which we are increasing health related expenditure is unsustainable. The attempt to extract a co-payment from Australians visiting their GP was justified using this concern. However it is the better use of the currently available health dollars that should be given priority rather than asking Australians pay more for a health system that no longer adequately meets contemporary need. It is true that a considerable amount of the cost ineffective expenditure on health is generated by members of my profession with low value and sometimes no value tests and procedures wasting at least 10 billion dollar a year. While there are vested interests hampering necessary reforms, progress is being made as critical pathways, generated from the best available evidence by independent and expert clinicians, are developed centrally for application locally. The Institute for Clinical Excellence in NSW is one organisation facilitating this type of reform which should improve the standardization of evidence based clinical decision making.

Looking more broadly at the inefficient use of precious health dollars we could discuss the 600,000 or so avoidable and expensive admissions to public hospitals each year and the billions of dollars wasted as 24 million people are served by nine Departments of Health. However there are two other examples of cost ineffective expenditure that are in the news and worthy of further comment; the Private Health Insurance rebate and the subsidy tax-payers pay to the private heath industry as they pay for a raft of useless pseudo-scientific modalities. Both of these have been addressed recently and unsatisfactorily by health minister Sussan Lay.

Interviewed on the 7.30 report Minister Lay defended the need for government to use six billion dollars of our money to reduce the cost of Private Health Insurance claiming it was needed to relieve the pressure on the demand for public hospital services. She has no doubt been told and believes that this is so. It is not.

The Howard government introduced the taxpayer-funded rebate at a time when private health insurance rates were falling. In the ensuing twelve months private health insurance rates increased by only 2% and there was an almost negligible decrease in admission to public hospitals. After that year there was no noticeable effect even though additional strategies did significantly increase the uptake of private insurance. Making insurance more expensive as one aged and demanding a significant levy be paid by wealthier Australians who did not have private insurance, did have the desired effect on participation rates but not on helping public hospitals.

Private and public hospitals operate in different health care universes. Both by and large offer excellent services but one has a fixed budget and an average annual increase of 3% in the demand for admission that is fiscally intolerable. The other makes more money when more patients are admitted. More than 70 % of the patients in public hospitals have serious and often chronic medical conditions while more than 70% of patients seeking private hospital care need day only procedures or surgery. As cash strapped public hospitals were forced to close beds without being able to escape the demands from sick medical patients, elective surgery became increasingly difficult to deliver in a reliable and timely matter and much surgery (and the surgeons needed for that surgery) moved to the private sector.

Had the six billion dollars worth of subsidies been available to public hospitals many could have continued to offer more of the surgery required by patients who reluctantly paid for private insurance to get their operations in a timely manner. With the public sector increasingly unable to compete, volume wise, with the private sector surgical fees have skyrocketed contributing significantly to the 29 billion dollars of out-of-pocket expenses Australians fork out each year for their health care.

A number of health insurers, responding, they say, to consumer demand, will pay for treatment from a range of “Alternative” practitioners. The Labor government concerned, at the growth in such payments, asked the Chief Health Officer and the NH&MRC to examine some 18 modalities to see if there was “credible scientific evidence for their clinical effectiveness”. The committee assembled looked at practices such as Iridology, Reflexology, Homeopathy, Reiki etc. and reported to the current government that there was no evidence that any of them offered clinical benefit. The government was urged to stop public subsidies for these pseudo-sciences and, in so doing send a message to the public emphasising the need to enquire about the evidence base for any care they receive. The report is “lying on the Minister’s table”. For decades I have been depressed by the influence the “Alternative” industry has on governments so I was not that surprised at the response when, at her Press Club presentation, reporter Sue Dunleavy asked her the following question.

“Every year health insurers are paying $180 million for natural therapies for which there is no evidence,” she said.

“You already have the review of the worth of those therapies conducted by the chief medical officer on your desk.

Can you tell us what that report said and what you are doing about it?”

The nonsensical and depressing response was “…the issue of complementary therapies is an issue of great interest to Australian patients and certainly to private health insurers and those concerns about the budgetary implications of which you speak.

But I don’t propose to take any piece in isolation out of the complex mix of interests, stakeholders (for want of a better word) and, of course patients and taxpayers, when we look at the important issue of private health insurance.

To pick up one report commissioned by a previous government (not that necessarily has to be an issue in itself) and make it something that this government has to respond to almost at the micro level, without regard to the intersecting policies issues and interests, I don’t believe is sensible public policy.”

Many contributors to “Pearls and Irritations” have noted that for a cost effective sustainable health system providing better health care, we, as is the case in much of the developed world, must invest in Primary care that emphasises prevention, in house team management of chronic diseases and the ability to care for many in the community currently sent to hospital. Quality hospital care is totally dependent on our reducing the need for so much hospital care. The currently wasted dollars, if applied to fund needed reforms could provide us with the excellence we need without increasing the % of GDP we spend on health. Such reforms should be a major issue for the coming election.

 

 

Private Health Insurance gets a foothold in primary care.

Imagine the following scenario. You are checking in with your GP’s receptionist for your scheduled appointment and are asked to produce your Medicare Card and, if you have one, your private health insurance membership card. If you have both you move into the waiting room on the right reserved for patients with private health insurance for whom the practice will provide a range of additional services not available to those in the waiting room on the left.  Health outcomes are resource dependent so patients who can expect more quality time with their doctor and a range of services from other health professionals because private health dollars make it possible will, in many cases, have better outcomes. This is particularly likely if they are troubled by chronic and complex conditions. In such circumstances it’s also not hard to imagine practices over time, deciding to accept only patients with private insurance, as is commonplace in the US.

Unlikely scenarios for Australia? I hope so but certainly don’t know so and recent developments convince me that both health professionals and consumers need to be pro-active in making it clear to our politicians that such discrimination would be totally unacceptable. There is already much in our health system that is unfair and expensive. Unfair in that increasingly timely access to quality care is often determined by personal financial wellbeing rather than need, and expensive in that inferior care to socio-economically less privileged Australians results in much chronic disease that eventually costs the taxpayer dearly. As we struggle to reverse that situation we have, for the first time, an Australian government encouraging private health insurers  (PHIs) to become involved in our primary care space. Four of the successful tenders for the operation of the 31 new Primary Health Networks (PHNs) will utilise consortia involving for profit and not for profit private health insurers.

Labor’s “Medicare locals’ have morphed into the Coalition’s Primary Health Networks. The health minister has explained that this new initiative will see PHN’s co-ordinating care offered by local hospitals districts (of which there are more than 150 in Australia) and local GPs. The networks are not to provide health services directly but use their 900 million dollars to “improve front line services”.  Currently private health insurers are not allowed to offer additional insurance for any services funded by Medicare. However there is every chance that Insurers involvement in PHNs, which will include input into GP training, and workforce planning, could be the start of an ever-larger role for private insurance in primary care.  At the time of the PHN announcement a spokesman for the peak body for insurers, “Private Health Care Australia”, said, “the best way to improve Australia’s health system is to increase the role it (PHI) plays in GP care”.

While the new initiative is unlikely to be any more successful than its predecessor given the vagueness of the terms if reference and the small number of networks covering a huge country yet asked to act locally, the conflict of interest that is inherent in having PHIs involved is very real. PHIs primarily exist to benefit their members, by and large better off Australians while PHNs to be successful must target better services for less advantaged Australians.

Global experience tells us that these networks should indeed be subdivided to become locally relevant and offer model Integrated Primary Care and secondary services. They should play a “hub” role for affiliated practices helping with IT, documenting health outcomes, continuing education, bulk purchasing, in house drug education, research etc. etc. About as different from what is on offer as is possible to imagine.

Why are PHIs so keen to get involved in Primary Care? While business models involving large numbers of Australians buying primary care insurance may be attractive the main reason for PHIs interest in primary care is their need to have fewer members admitted to hospital. This is particularly important for those admitted frequently as a result of advanced disease. Our larger PHIs tell us that 5-10% of their members who are frequently admitted to hospital generate 50 -60 % of their costs. Better-resourced primary and community care for these members might reduce admissions and save them large amounts of money. The political and public relations dilemma is easy to understand. How can they provide their member’s primary care team with the needed resources without creating a two-tiered system?

Of course the exact same problem, though on a much larger scale is troubling, or perhaps more accurately, should be troubling Australia’s national insurer. As has often been discussed in these blogs it is public hospital care and associated costs that are consuming most of our health care dollars, not Medicare.  With our State/Federal divide in health care responsibilities it is State budgets that are in the same boat as the PHIs, ever increasing numbers of older and sicker patients requiring hospitalisation.  A number of studies have found that as many as 600,000 admissions to public hospitals could be avoided annually if our primary carers were resourced to offer better community care.

We hospital doctors know only too well that many of the patients who return to hospital frequently have such advanced disease that little can be done in the community to manage their recurring crises . We certainly know that many such patients will die in hospital when a better death with more dignity at much less expense is not available at home. But the real challenge is to develop a primary care system that reduces the tsunami of Australians who are at risk of developing Chronic and Complex conditions and do so.

Is there a role for PHI in the creation of such a system? Certainly PHIs can and often do help their members with resources to improve their health literacy and their understanding of how they can best help themselves to manage their problems. Many in the private health industry are enthusiastic about the “Medical Home” model of care that I, and others, have described enthusiastically in detail herein the following link. https://publish.pearlsandirritations.com/blog/?p=3192    Some insurers have expressed interest in funding “proof of concept” practices resourced to offer the Integrated Primary Care (IPC) that is at the heart of the Medical Home model. There is proof from many countries that this model does very significantly reduce hospital admissions. Our federal government should be even more interested in this model as the majority of hospital admissions involve people without private health insurance. Canberra not the PHIs should be establishing Medical Home practices to demonstrate the benefits of the model in Australia. Some in the private health insurance industry have called on government to join them in supplying our primary care system with resources that emphasise prevention, early diagnosis and management of potentially chronic problems and care in the community for many currently sent to hospital. It is hard however to envisage a mechanism for such cooperation.

International experience warns us of the many problems associated with a mix of public and privately funded primary care. We do not want insurers (be the private or public) interfering with decisions about treatment programs for individual patients. We do not want a two-tiered system. On balance we should be urging government to maintain the current restrictions on PHI supplementing Medicare funded services. In so saying we should immediately add that Medicare does need a major structural overhaul to become a funder of a primary health care system not a fee payer for doctors.

The health minister has indeed just announced a review of many aspects of Medicare. The review will be led by two good people, Dean Bruce Robinson from Sydney University and Dr Steve Hambleton a former head of the AMA. The minister’s statements suggest that she feels that our current model of primary care would be fine if over servicing, rorting doctors and low value test and procedures were contained. The reviews will take 18 months and to encourage GPs to participate the current freeze on cost of living adjustments to Medicare rebates will remain until efficiencies are providing extra dollars. No talk of PHI involvement and no talk of Integrated Primary Care!

In reality we don’t need more reviews asking, “what should we do?” but rather a health care reform commission to drive changes (“how do we do it?) that are evidence based providing us with a cost sustainable and fairer health system detailed in these columns on any number of occasions.. The result would be a generation of healthier Australians with government and PHIs spending far less on expensive hospital care. A real “win, win” situation.

John Dwyer is Emeritus Professor of Medicine at UNSW. 

 

 

 

In the first part of my commentary on John Menadue’s Health Policy Reform in his blog, I discussed  the barriers frustrating any reform agenda. In this second part I will comment on John Menadue’s suggestions for “overcoming these obstacles to health reform” and provide my own thoughts on what a reformed health system might look like.

 

In his blog he commented that “seldom do we stand back and ask the central issue: what do we need and expect from a health system”? For some years now I have presented the following answer to that question to professional and community audiences. We need, deserve and can afford a health system that—-

“Is focused on the needs of the individual, is resourced to maximise opportunities for avoiding illness (prevention), is demonstrably equitable, sustainable and provides evidence based quality care in a timely manner available on the basis of need not personal financial wellbeing”.

A few years ago, thanks to an initiative of the Division of Primary Care at the University of Queensland, I had the opportunity to take part in a series of town meetings around Australia where we discussed what citizens wanted from their Health Care system. We dissected the elements of the above definition and each of the elements therein was readily appreciated and endorsed. The concept of a “medical home”, (recently discussed in Pearls and Irritations) as provided by an Integrated Primary Care model was often greeted with a “Why didn’t we introduce that ten years ago” question. I was interested in the acceptance by audiences that we may need to pay more for a better health system and the willingness to do so.

I discussed the above definition and its ramification at a national meeting of the Australian Health Care Reform Alliance to which we had invited Tony Abbott, health minister at the time. He told us that he did not like to hear talk of “reform” when we already had the best health system in the world that only needed “a little tinkering at the margins”. I was reminded of this when reading John Menadue’s comment that reform “will be hard without political leadership and political will”. There are none so “non-reformist” as those who insist there is nothing to reform.

What reforms would provide us with the health system we need and how do we overcome the political inertia? A single funder of our national health scheme remains the “Holy Grail” for most reform commentators. As John Menadue highlights the jurisdictional division of health care such that hospitals are the responsibility of the States while our Federal government funds Primary Care(GP’s and others) is the single largest barrier to both integrated and cost effective (sustainable) care. We are the only OECD country so burdened. Perhaps Federal and State governments think that the cost shifting and “blame game” that follows is politically attractive as the public may be unsure who is responsible for problems. No one is asking the Commonwealth to be the sole provider of health care. Rather we are suggesting that the Federal government fund providers that will, implement the health care model Australians and their government have agreed upon. However while we must not abandon the goal, the current reality is that neither major political party is interested in the single funder model.

Looking at our needed reforms and learning from the experience of other countries that have modernised their health systems it is not difficult to provide a map for a reform journey.  As is true for any journey one must have a definite destination in mind. The journey may have its trials and tribulations but the destination is set. Our destination (the Health Care system we need and can afford) must be determined by in depth discussions with Australians about the need for change. Readily understood models must be put forward for analysis of their benefits as well as the associated ramifications. This is particularly important if more public expenditure is required to fund the new model.

Apart from the old-fashioned “Town Hall” style meeting referred to earlier, there are numerous opportunities for providing information to and receiving feedback from the community.  I was most impressed with the quality of the discussions provided by “citizens juries” moderated by the much-missed Gavin Mooney.  All media outlets including social media would be utilised. I agree with John Menadue that the process of consultation and the formulation of the desired model and the elements it contains (our destination) should be overseen by a Health Reform Commission populated by independent professionals and community representatives so that it is demonstrably apolitical. The model must be “efficient and equitable”, efficient in that it provides the clinical outcomes desired in a cost effective manner and equitable in that its benefits are available to all Australians.

While the longest journey starts with the first step, in this case it is the very first step that is likely to be most difficult. That first step requires us to break through the barrier of political intransigence.  International experience and a study of what I believe we need to do in Australia suggest that our journey will take about a decade to achieve the desired transformation. As John Menadue suggests it cannot be rushed. And there immediately is a political problem as increasingly short-term governments are disinterested in projects without imminent political kudos.

However if we are ever to achieve political support for reforms we must be able to present a clear vision of what we want. Perhaps the most frustrating part of the present Government’s attacks on primary are is that it is devoid of any vision for improving outcomes and cost effectiveness.

What follows is a summary of the initiatives and organisation we might see if the community and government were to want our health system to have the characteristics I described above.

The Health Reform Commission would hand over reform implementation to a new statutory body; say the Australian Health Authority (AHA) and certainly not the Department of Health and Aging. This organisation must take us to our destination. It holds all the health care funds expended by the Commonwealth and States. It replaces nine departments of health. It mangers a series of necessarily central bureaucratic processes, such as the PBS, public health policy and interactions with numerous agencies in order to support the social determinants needed for a healthy community. It establishes a series of Regional Health Authorities (RHAs) dividing Australia into logical and manageable demographic clusters and provides each with funds based on a resource distribution formula that is responsive to local need and not just population numbers.  In this way the current problems created by State boundaries being artificial health boundaries are overcome.

RHAs would seek providers for Hospital, Community and Primary Care services. The States may well seek funds to continue to manage their hospitals but the role delineation for such hospitals would be negotiated with the RHA. A number of Primary Health Care organisations will be funded in a region. (The current model of having a small number of PHOs replacing Medicare locals and responsible for improving care over huge areas but not actually offering direct care is fatally flawed}.

Within RHAs Primary Health Organisations would act as hubs in a hub and spoke model directly offering primary and secondary services (In New Zealand they may run 23 hour wards and treat minor emergencies). PHO’s would offer a range of supportive services to affiliated primary care practices. These would include help via bulk purchasing, continue professional development, drug education, and IT management and, crucially, help with required data collection to document health outcomes.

The preferred model of primary care supported by RHAs would feature the “medical home” model of Integrated Primary Care wherein funding is available to support teams of health professionals (including dentists and dental hygienists) working in the one practice to help enrolled patients with prevention strategies and early diagnosis and management of health problems that could result in chronic illness. In house teams would manage chronic and complex disease and care in the community for many currently sent to hospitals.

In this model “Fee for Service” (FFS) payments would only be applied to “drop ins’ with short term self-limited problems. (John Menadue  accurately pointed out the perverse incentives attached with FFS payments and certainly young doctors contemplating a career as a GP are turned off by the thought of practicing “turnstile” medicine. (Some movement within the AMA to support a move away from FFS heartens me). Chronic disease management is covered by capitation funding with a bonus system for better health outcomes. A consumer controlled electronic health record facilitates integration of the care offered by all providers and hospitals.

Best practice management in community and hospital settings is facilitated by the availability of standardised evidence based clinical pathways for a given problem These would be generated by “craft groups”, specialist doctors, nurses and allied health professionals working in a given field who “think globally for action locally”. Professors Kerry Goulston, Graeme Stewart and I set up such a process with excellent outcomes in NSW. The methodology is now applied more broadly by the Agency for Clinical Innovation. This provides a major weapon in the effort to reduce expensive investigations and procedures of little clinical value described in the first part of my commentary.

In the light of these new directions medical education has to change and inter-professional learning curricula are necessary to prepare the next generation of health professionals for “Team Medicine”. Rural based medical schools with postgraduate specialist training available in rural settings is  necessary to solve the shortage of medical practitioners in rural Australia.

John Menadue’s forecast that 15 billion dollars could be saved by health system reform is too modest. The above “imaginario” if implemented would save much more. Overseas experience suggests that we could expect a 30-40% reduction in hospital admissions over 10 years. Just before Christmas the UK government received a commissioned report indicating that by spending an extra 72 million pounds on improving primary care the health system would save 1.9 billion pounds by 2020.  By spending more on Medicare (now a specific health care program not a doctor’s bill payer) to implement these changes we could save many billions, as hospital care is so expensive. It is quite possible that the elimination of inefficient health spending as outlined in part one of this commentary could fund the changes.

Lessons learnt from change management strategies in other health systems tell us that reform must be community supported and feature “bottom up” modelling. Clinicians would not be forced to adopt change with early implementation of the desired model involving a “coalition of the willing”. The latter should participate in establishing government funded “proof of concept” primary care services as described. How one laments that fact that the Super GP clinic money provided by the previous government could have readily funded a series of “medical homes”.

For two decades John Menadue has championed the idea of a “proof of concept” demonstration of the value of whole of health care integration by creating a State/Commonwealth Health Commission in Tasmania to begin with,  wherein pooled funding would allow many of the above concepts to be trialled. Of course I would strongly support such an initiative for although, if successful, its importation to the mainland would leave us with many problems that could be solved by the re-alignment of health boundaries, patient focused integration and cost effectiveness would certainly be improved.

I suspect that the Abbott government wants to reduce, as much as possible, its health footprint and would be happy to see health care handed over to the private sector. In every country where this has happened health expenditure has increased but not satisfactory health outcomes. The government’s initiation of a review of the benefits or otherwise of federalism may lead to a discussion of the possible assumption by States of all the public health care offered to their citizens. Any discussion that moves us away from the “status quo” is welcome. John Menadue’s three health policy reform blogs are informed and provocative and I hope will revitalise the reform debate.

Medibank/Medicare was launched 40 years ago. It was designed to fund the health delivery system at that time.  We need now to address the basic issues concerning the way health services are delivered.

I am grateful for the opportunity to add my comments.

John Dwyer is Emeritus Professor of Medicine at UNSW.

 

 

 

 

 

 

 

As I suspected  would be the case with many readers who enjoy “Pearls and Irritations”, I experienced in equal measure, satisfaction and frustration as I absorbed John  Menadue’s informed and insightful analysis of the problems that beset our health system and prevent urgently needed structural reforms. His three essays accurately explore the major issues. He has experienced political power and politician’s motivations from the inside. Fortunately, his passion for good government has, for two decades or more, been particularly interested in improving our health system. Here too, importantly, he has had first hand experience of how the system works (and doesn’t work). His recent survey provides us with a very valuable document, as it is, in fact, a template on which we must build a reform agenda.

What about my feeling of frustration engendered by these essays?  While comprehensively exposed and explained, few of John Menadue’s conclusions are controversial among would be health system reformers who have first hand knowledge of the issues and who are studying the results of health system reforms in other countries. As he highlights, we have benefitted from political leadership willing to embrace major reforms to our financial systems but both sides of politics in Australia have failed us leaving health reform in the “too hard basket”. I remember a conversation with health minister Roxon on the need to introduce Integrated Primary Care into Australia.  She appreciated the benefits but as such a reform would increase Medicare expenditure she told me, “like many good ideas this will just have to lie on the table till the time is right”. The time was right 15 years ago.

The comments that follow presume that readers will have read John Menadue’s important analysis. In this first part I will address some of the issues he presented and in a second part expand on the strategies need to progress reforms and what those reforms should embrace.

 

As highlighted, the power of vested interests to urge lay politicians, who don’t understand our complex health system anyway, to hold to the “status quo” is frustrating. Recently “Australian Doctor” asked doctors (mainly GP readership) who was the least competent of the last ten health ministers. Peter Dutton won in a landslide but I feel this was a measure of current frustration rather than an historical analysis of the question.  I would have voted for Kay Patterson. As the new century started health reform advocates were active and the then minister for health in NSW, Craig Knowles, listened and accepted our argument that the next round of negotiations re commonwealth funding of state public hospitals should include a reform agenda not just a dollar agenda. The States and Commonwealth agreed and 13 sub committees were established to prepare structural reform agendas on everything from indigenous health to the funding of prevention strategies. After months of work and legitimate expectations that we were entering a new era for health reform, Minister Patterson pulled the plug on the reform agendas and reduced the COAG negotiations back to dollars. Had those reforms and the methodology for creating those reforms been accepted we would have a far better health system today. As John Menadue has highlighted here was another example of vested interests derailing a most important initiative.

John Menadue emphasised the importance of every Australian having access to Medicare funded Primary Care with ability to pay being irrelevant to the quality of the service received.  Rightly, he warns us of the possibility of Primary Care becoming a two-tiered service with better access and facilities being available to those with private insurance. Such an arrangement has destroyed equity in the US system and dramatically pushed up costs. The Abbott government does not seem to understand that inequity is not only “unaustralian” it’s also very expensive. In 1900 the average Australian died aged 56. Many deaths were attributable to unavoidable and untreatable conditions particularly those caused by infectious organisms. The great flu pandemics did not discriminate between rich and poor. Today we can avoid most of those causes of early death and we live remarkably longer. Disease patterns today focus on dangerous life-style choices that lead to the development of Chronic and Complex problems which kill us slowly and for too many rob their extended years of life of quality. With the exception of poor health caused by excessive alcohol consumption all the risk factors for chronic disease are more prevalent among socio-economically disadvantaged Australians. We only spend 2% of our health budget on trying to help people avoid lifestyle induced illness and so we all end up paying much for the care of our fellow Australians with advanced disease.

We need new money to fund important structural reforms so it’s appropriate that John Menadue looks at dollars we use poorly in our current system. He correctly targets the lack of leadership that has us paying far more for drugs than other similar countries. The duplication of health bureaucracies (nine departments of health for 23 million people) cost us 3-4 billion dollars annually, while the estimated 600,000 admissions to public hospitals that could have been avoided if the infrastructure for management in the community was available would save us at least 15 billion dollars. Over servicing by my profession when performing non-evidence based investigations and procedures of low value is estimated to cost 20 billion dollars a year. And then there is the Private Health Insurance Rebate that John Menadue discusses in detail.

With some means testing now the rebate probably will cost taxpayers this year closer to 5 billion dollars rather than 7 billion but there is no doubt that the amount of health available from this initiative is not worth the price. While the Insurance industry and government disagree two facts are indisputable. The first is that the rebate has not been responsible for a significant number of Australians taking up private health insurance. After the introduction of the rebate, health insurance rose by no more than2%. The stick that did increase coverage was the whole of life rating system and tax accountants telling clients they would pay more tax if they did not sign up. The second fact is that the rebate and indeed the increased uptake of PHI did not reduce pressure on public hospitals. As John Menadue rightly points out increased activity in Private Hospitals where 75% of the patients have surgical problems, has seen a loss of surgical capacity in public hospitals greatly increasing the ability of surgeons to charge more while public hospitals are swamped with chronically ill medical patients and not able to offer as much timely surgery as they would wish.

An obvious but important point emphasised by John Menadue reminded us that the PHI rebate and the pressure to hold PHI is vey unfair to many rural based Australians for there are no private hospitals available in the majority of rural communities. In truth many health inequities are entrenched in rural Australia. The 35% of Australians who live in the country and supply 66% of the nations wealth have far poorer health outcomes than their city cousins. White Australians living in rural communities are likely to live 4 years less than average city dwellers. From depression to heart disease to infant mortality to cancer, outcomes are inferior in rural Australia. This gross inequity is not being addressed despite numerous enquiries highlighting the changes needed to reverse the situation.  (e.g. reducing dependence on overseas trained doctors by training more rural based students in medical schools established in a rural setting and (as John Menadue emphasised) far better use of the existing non medical workforce, and numerous other evidence based strategies.) How frustrating for country citizens that the National party promised major rural reforms if the coalition won the last election when, in reality, they have had no power to influence rural health initiatives.

Talking of the better use of the non-medical workforce brings me to one point where I would place a caveat beside one of John Menadue’s recommendations. Pharmacists are men and women trained at university to understand scientific methods and appreciate the importance of evidence based Medicine. Indeed their professional charter demands they only offer medicines know to be clinically effective to their clients. Certainly they should be integrated into our Primary Care system. However there is a professional (commercial) cancer eating away at their integrity as they offer so many products that have no real value to customers. Their prescription services are usually assigned to the back of a shop in which 80% of the space is provided to offering health products that are no doubt lucrative but of little value. Recently calls for Pharmacists to rid their shelves of Homeopathic products following the NH&MRC report emphasising they can have no more than a placebo effect, have been rejected. Pharmacists should be telling clients that the 2 billion dollars spent each year on supplements and vitamins is largely a waste of money and that you can’t neutralise an unhealthy lifestyle with something from a bottle.

In many countries any clinical observations made and the drugs supplied to an individual are entered into the persons electronic health record in real time. John Menadue criticises the Department of Health for failing to roll out an electronic health record for Australians, an initiative he describes as a minor reform.  In fact an electronic health record is a much-desired major reform and can be the lynchpin for much needed integration of patient focused care. Many countries are now reporting on a decade of experience with an electronic health record and the improvement in care made possible by this initiative and clinician and patient satisfaction with the system are most impressive. Kaiser-Permanente in the US is reporting that in the last decade it has turned two million face to face consultations into email consults. The organisation’s initiatives, which include major prevention strategies delivered via an Integrated Primary Care system, have seen it have the best health outcome results nationally in 10 of the 12 major indicators used to measure success in treating chronic diseases.

So summarising John Menadue’s concerns, we have a health system that by international standards is not meeting our contemporary needs, is provider, disease, and hospital centric, held hostage by vested interested that dissuade governments from embracing structural reform, is very cost ineffective, does not focus on efficiency and equity while Medicare, which though in need of reform remains invaluable to Australians, is at risk.  In the second section of this commentary I will comment and expand on John Menadue’s suggestions for breaking the impasse and providing a structure on which we might be able implement needed change.

 

John Dwyer is Emeritus Professor of Medicine at UNSW.

 

In case you missed it, this is a repost of a blog that I posted on 12 December last year.  It is highly relevant to the continuing debate about copayments and general practice.  John Menadue.

The most distressing feature of the government’s determination to have us pay more for a visit to our GP is its the total lack of vision for the structural reforms we should be discussing to provide Australians with Primary Care services that meet contemporary needs, are equitable and more cost effective. Instead of focussing on new models of care that around the world have been shown to achieve better health outcomes than we enjoy in Australia, the  $5 reduction in the remuneration for a standard GP consultation will make matters worse. The logic associated with this latest initiative is seriously flawed. Placing the money saved into a research fund means that the proposed reduction will do nothing for the budgets bottom line, the imperative presented to us in the May budget.

The Government wants to send a “price signal” to Australians to remind us that no longer can we expect Medicare to be free. Australian taxpayers provide every cent of the 19 billion dollars we spend each year on Medicare. If you pay to join a tennis club but do not pay extra for having a game of tennis you don’t consider that game to have been free. There is in fact plenty of evidence that current additional expenses associated with Primary Care see many delay seeking help and unable to afford prescribed medicines. Our out of pocket expenses for health care top 29 billion dollars a year, on a per capita basis, second only to the United States.

Australians on average, make five visits per year to a GP.  That does not suggest that we are abusing our entitlement to Primary Care services such that we need to be discouraged from visiting our doctor. With health expenditure at 9.3% of GDP there is no health budget crisis and there is time to make structural reforms that would achieve better outcomes and continue to make our expenditure sustainable.

The truth is that many of us need to visit a GP more frequently if we are to avoid the pain and suffering associated with chronic disease, the problem that is eating up the majority of our health care dollars. Many rural Australians, whose health outcomes are disgracefully inferior to those of their city cousins, would willingly consult a GP more frequently if there were GPs to consult. If Rural Australians accessed Medicare funded services as frequently as urban Australians the cost to Medicare would be an additional two billion dollars.

The future availability of sufficient numbers of general partitioners is already problematic. Only 13% of young doctors express any interest in becoming a “GP”. Only one percent are contemplating a career as a rural GP. Primary Care training is rigorous and GPs are true specialists. How does all the rhetoric from Canberra about the pivotal role they play sit with the proposed $31 fee for a standard consultation? Given the training required and the responsibility associated with medical care this fee is frankly insulting. The discrepancy in the income potential for GPs when compared to that of other specialists is now huge. No wonder young doctors considering career options are increasingly ruling out Primary Care. The ability of GPs to consider “bulk billing” the majority of their patients is only possible if the total remuneration they receive is satisfactory. Bulk billing doctors will not be able to absorb the five-dollar cut in the Medicare rebate and are appalled by the added levels of bureaucracy and paper work that the new arrangements will entail.

Young doctors looking at the professional life of our GPs are uncomfortable with the current “fee for service” model which encourages “turnstile” medicine that is so professionally unfulfilling. Many GPs join corporate Primary Care providers preferring a salary. In New Zealand the government has facilitated 85% of the nation’s GPs moving away from “fee for service” payments. The same is true for 65% of US Primary Care physicians.  Throughout the OECD health systems recognising the perverse incentives associated with fee for service remuneration are exploring changes that increase a GP’s remuneration for keeping people well.

Were it not for the destructive division of health care responsibilities shouldered by State and Federal governments, Canberra would not be looking at Medicare as if were in isolated from the rest of the health care system. Hospital expenditure, at more than 50 billion dollars per year, dwarfs Medicare spending and is increasing more rapidly. There is now abundant international evidence that we should be spending more on Primary Care services to reduce the spiralling cost of hospital services and at the same time achieving better health outcomes for the community. Just this week the UK government has been presented with a review that concluded that an extra 72 million pounds spent on improving Primary Care in the community would save the system 1.9 billion pounds by 2020! The future of quality hospital care in our country is totally dependent on reducing demand for hospital services through better Primary Care.

A competent government would be looking at the way we can introduce the highly successful “Medical Home” model of Primary care where teams of health professionals populate a practice and are available to enrolled patients. The infrastructure is available to help people avoid illness, have potential problems recognised earlier, offer coordinated “in house” care for people with chronic problems and care for many in the community currently sent to hospital. But no, all we discuss is this five-dollar impoverished initiative. The Abbott government should abandon this latest plan and start a dialogue with health professionals and the community about needed structural reforms that would extract far more health from the available dollars.

 

Professor John Dwyer is Emeritus Professor of Medicine UNSW.

Part 2: Attracting the future work force needed to provide Primary Care.

There is another imperative for introducing Integrated Primary care (IPC),the new model of primary care described in part one of this review; the recruitment of the next generation of GPs.

Recent surveys of the career intentions of medical graduates show only 13% are interested in a primary care career and only 13% of them have any interest in working in rural Australia. They see that 70% of GPs do not want to be tax collectors for the government and note that the Medicare rebate for a standard occasion of service has been reduced to $31.60. GPs are specialists aren’t they? This is not attractive remuneration especially when socio-economic circumstances leave 80% of GPs with little option but to bulk bill their patients. This in turn leads to “turnstile medicine: unsatisfactory to both practitioner and patient, and the well documented poorer health outcomes associated with this form of practice. Many GPs want to move away from the “fee for service” model and try to do so by joining the “corporate” GP world. There many are dissatisfied with the model of care imposed on them.

On the other hand young doctors considering a career in primary care are attracted to the IPC model; after all they have seen team medicine as a normal activity in our hospitals.  In New Zealand 85% of GPs have voluntarily abandoned fee for service payment in favour of salaried or contractual payments.  The same is true for 65% of US GPs. Currently about 65% of GP practices in Australia feature three or fewer doctors. However good the care on offer these are not strong economic units. IPC practices, established as companies with community representation on their boards, offer great flexibility and the chance for the clinicians working in the clinic to develop equity in the business. This is important as our GP specialist on average earn far less that many of their colleagues.

IPC Clinics also facilitate the introduction of other urgent reforms. Pre-agreed per capita funding for patients with defined chronic conditions, if established competently by peer review, offers opportunities for better outcomes to be rewarded. There is an excellent opportunity for the planned replacement of “Medicare Locals” with “Primary Care Networks” to facilitate the introduction of IPC into Australia. Current discussions suggest that there are to be 21 PHNs established across the country. There mission statements are yet to be clearly defined but the better integration of patient care will be a major focus. By sponsoring geographically local sub-units (Lets call them Primary Health Care “hubs”) within defined Local Hospital Districts, affiliated IPC clinics in the area could be provided with the centralised assistance needed to better operate their care model.  IT expertise, bulk purchasing, continuing education resources, in house review of new drugs, meeting with local hospital clinicians re patients frequently readmitted to hospital and many other initiatives could be available. Although the review commissioned by the government recommended that PHNs not engage in clinical work, a number of primary care hubs in New Zealand offer acute care services and even run observation wards where patients can be treated for many hours while a decision re the need for hospital admission is made.

So can we afford to introduce these structural reforms? The reality is that we cannot afford not to. Hospital expenditure dwarfs Medicare expenditure and increases more rapidly. The future of affordable quality hospital care is inextricably linked to better primary care reducing the demand for hospital services.

IPC would provide us with many more healthy Australians whom we are predicting will need to work longer .A 40% reduction in avoidable hospital admissions would save us at least $12.5 billion a year and reduce much personal suffering. It can be estimated that these results would require an additional $5-7.5 billion a year being spent on Primary Care by the time the changes are fully introduced nation wide. Diverting the dollars spent on subsidising private health insurance would almost supply the money needed but there are many other savings that would follow structural reforms. Increasing the level of health knowledge among Australians would see them stop looking for health out of a bottle and provide the almost $3 billion they spend on unnecessary supplements, vitamins and “good bacteria’ for better primary care help. Better attention of many doctors to the need for an evidence base for the care they give could save $20 billion spent on low value or no value procedures. Nine departments of health for 23 million Australians comes with duplication costs of at least $3 billion.

The reality at this time of course is that the Abbott government has shown no interest in structural reform for our health system. The peak advisory body on Prevention has been discontinued. However we must continue to engage the community in a discussion of what they want from their health system and alert Australians to the benefits of IPC. Adequate penetration of the new IPC model with all the structural and cultural changes required would take at least a decade.  We can all live with this journey providing the destination remains clear. The journey needs public support and bottom up implementation from within the health professions themselves. Politicians need not fear the slowness of progress within the election cycle. These reforms are achievable as we can note from numerous successful implementations elsewhere. The community will applaud the political leadership that commits us to the journey and supplies the infrastructure to drive the initiative. Ideally a transition authority would be established to guide us on the journey. The challenge now is to find that political understanding and leadership that will help us take that “first step” that must start all journeys.

John Dwyer is Emeritus Professor of Medicine UNSW