The attacks on journalists and others at Charlie Hebdo have quite rightly attracted a great deal of attention. But Charlie Hebdo can be outrageously provocative. See below this ‘Merry Christmas’ greeting which Charlie Hebdo published in its last edition of 2014.
It says:
Shit in the creches
Finish off the handicapped
Shoot all military personnel
Strangle the priests
Make mincemeat of the cops
Burn down the banks.
This article was initially posted on 1st February last year, the 30th anniversary of Medicare. (more…)
Part 2 in this series was originally posted in August last year.
In my blog of 6th October on what we can learn from overseas health systems, I drew attention and warned against government subsidised private health insurance. Any growth in this industry spells trouble for a good health service.
Another thing that we could learn from overseas experience is that our fee for service (FFS) for GP consultation results in higher costs and inferior treatment. There are many disadvantages in FFS.
Many countries have moved away from FFS in favour of paying GPs, at least in part, on a capitation basis. Patients are enrolled in a practice and the GP is paid for ‘looking after them’. FFS may be appropriate for occasional care but it is not appropriate for long-term care of chronic patients.
Capitation arrangements are widespread in NZ particularly for those with chronic healthcare problems. For 100 years capitation has been the principal means of paying GPs in the UK. In ‘managed care’ in the US capitation is widely used.
A capitation scheme in Australia could not be introduced overnight but we need to scale back FFS to improve the quality of care and to discourage over-servicing and over prescribing. FFS is a perverse incentive. It rewards doctors when patients are sick. Doctors should be paid to keep people healthy.
Another matter that we could learn from overseas is that we must find ways to overcome the split between commonwealth and state responsibilities in health. Broadly, the commonwealth funds general practice in the community and the states run public hospitals.
This division of responsibility between hospital and non-hospital care is a major barrier to integrated and effective health care. Successful countries in health care, again like the Nordics and the UK, don’t have this split responsibility. They all have unitary systems with delegated health delivered to local levels within a defined national policy.
A major objective of any health service should be to keep people out of hospital. Hospital care is intrinsically more expensive and much more traumatic for patients. In his blog on August 20 Professor John Dwyer pointed out that if we had had a more effective integration of hospital and non-hospital care, we could have avoided 600,000 hospital admissions if there had been appropriate general practice care in the three weeks before hospital admission. That would be a very large saving.
A good health service must have a strong grounding in primary care and general practice. This is one reason why the UK system is so good. In the UK they understand better than we do that hospitals should be the last and not the first resort. Unfortunately government ministers put priority into iconic hospitals rather than primary care. We spent for too much in hospitals and not enough in primary care
Primary and GP care provides the cheapest and best quality care and it can keep hundreds and thousands of people out of hospital. And when we have a good linkage between hospital and non hospital care, patients discharged from hospital can be effectively supported again by their local doctor.
But because of our federal system the integration of hospital and non-hospital care is difficult. In my blog of June 3, 2014 I outlined a way to address this issue through a single funder in each state. This is fundamentally a political problem which causes difficulties in the health sector. Unfortunately commonwealth and state health ministers and their health bureaucracies seem more concerned about health territory rather than a health system that best serves our needs. The ‘blame game’ in health is unresolved.
The Greeks have been suffering for decades at the hands of a political and business oligarchy. Corruption and massive tax avoidance have been commonplace. It is not surprising that the Greek people rejected the mainstream parties and have thumbed their noses at the the EU, the European Central Bank and the IMF. Europe looks to be headed into new territory. Leonid Bershidsky on ‘Bloomberg View’ has an interesting take on ‘Syriza, Le Pen and the Power of Big Ideas’. John Menadue.
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This article was initially posted in June last year.
There has recently been quite a number of articles, including in The Conversation, about what we can learn from overseas health systems.
Before looking at these international comparisons, it is worth reminding ourselves that we do have a pretty good health service in Australia. It is not as good as it should be, but Medicare has stood the test of time since 1974. It costs less than the average of all OECD countries, as a percentage of GDP. Nevertheless there are some things that we can learn from overseas experience that should guide us.
In my view the most important thing we can learn from overseas experience is to be extremely wary of corporate welfare to the private health insurance industry. If it is allowed to grow in Australia through government subsidies it will represent a major challenge to an efficient and universal system of health care. The taxpayer subsidy to the private health insurance industry in Australia is about $5b billion per annum. That subsidy is about three times the annual subsidy which we used to pay to our automobile industry. Private health insurance is an expensive financial intermediary that does not deliver any health services.
The evidence around the world is clear that private health insurance is both extremely costly and very unfair. At one end of the spectrum is the US which has one of the worst health systems in the world in terms of equity and value for money. It is horrendously expensive. That is due largely to the fact that the funding of so much of health care in the US depends on private health insurance.
Americans pay about 8% of their GDP in private health insurance premiums. These premiums are really private taxes. If these premiums could be transferred to the federal government, the US would have a better health service through a single funder and it would also eliminate in one swoop the US federal deficit. See my joint blog with Ian McAuley of December 26, 2013. The scale of these private health premiums in the US gives some idea of the cost and the political power that private health insurance brings to bear. Experience in the US shows that a multitude of private health insurers cannot control costs and they weaken the power of the public funder to do so as well. President Obama may have expanded coverage of health care but reliance on private health insurance instead of a strong public payer, or price control, means that he will not be able to control costs.
At the other extreme in private health insurance is the UK and the Nordics who all have strong public funders and health service and with little or no reliance on private health insurance. The result is that these countries have amongst the best health services in the world.
The growth of private health insurance in Australia is the greatest risk we face in health… This threat should not be underestimated. The $5 billion p.a. subsidy should be abolished and transferred to a Medicare Dental scheme. This would shore up Medicare as a strong public funder for the future and expand the coverage of Medicare.
But the signs are that the Coalition Government wants to go in the opposite direction and extend private health insurance. We know from experience in this country that the administrative cost of private health insurance are three times higher than Medicare, that private health insurance favours the wealth and , that private health insurance particularly through gap insurance makes it more difficult for Medicare to control costs because of such policies as gap insurance. Furthermore private health insurance has not taken pressure off private hospitals.
Private health insurance enables the wealthy to jump the hospital queue ahead of other people. The private health insurance industry is now trialling in Queensland, and is lobbying to extend its role into general practice. An inevitable outcome of that would be that privately insured patients would be able to jump the queue in seeing their general practitioner. But there is more from these destructive private health insurers. Despite the denial by the CEO of Medibank Pte, George Savvides, the AMA insists that Savvides told an AMA dinner in March this year that he would like to see private health insurance policy holders receiving priority in admission and treatment in emergency departments of public hospitals.
International warnings are clear. Private health insurance is a real threat to an efficient and equitable health service. Maintaining Medicare as a single funder of health services in a critical issue.
Whether health services are delivered by the private sector or the public sector is a secondary issue. For example in Australia at the moment private medical services are overwhelmingly delivered by private doctors even though Medicare is a public funder. Health services should be delivered by people and organisations that can ensure quality and best value for money. But a single public funder is essential in my view.
The private health insurance lobby in Australia is unremitting. It never convincingly argues its case. It relies heavily on secret lobbying. Before the 2007 election the industry made a secret deal with Kevin Rudd that a Labor Government would maintain the government subsidy for private health insurance.
If people want to waste their money on private health insurance that is their choice. But it is extremely bad public policy for taxpayers to subsidise this pernicious industry. Warren Buffet described private health insurance as the tapeworm in the American health service.
It is the same problem in Australia and we must resist any growth in taxpayer subsidised private health insurance that would take us closer to an American style disaster. The corporate privileges for the inefficient and dangerous private health insurance sector must be rolled back.
That is the most important lesson to learn from looking at overseas health services.
On 26 January, the US Health and Human Services (HHS) Secretary, Sylvia M. Burwell, outlined a major change in the way that doctors and hospitals will be remunerated in future. She said ‘HHS has set a goal of tying 30% of traditional, or fee-for-service, Medicare payments to quality or value through alternate payment models. … Today’s announcement would continue the shift towards paying providers for what works, whether it is something as complex as preventing or treating disease, or something as straight-forward as making sure a patient has time to ask questions’.
See statement by Sylvia M. Burwell below. Australia is increasingly out of touch as we cling to fee-for-service style payments. We are lagging behind most developed countries with FFS and even the US which has the most expensive and inefficient health services in the world.
In a meeting with nearly two dozen leaders representing consumers, insurers, providers, and business leaders, Health and Human Services Secretary Sylvia M. Burwell today announced measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.
HHS has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs. This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.
To make these goals scalable beyond Medicare, Secretary Burwell also announced the creation of a Health Care Payment Learning and Action Network. Through the Learning and Action Network, HHS will work with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners to expand alternative payment models into their programs. HHS will intensify its work with states and private payers to support adoption of alternative payments models through their own aligned work, sometimes even exceeding the goals set for Medicare. The Network will hold its first meeting in March 2015, and more details will be announced in the near future.
“Whether you are a patient, a provider, a business, a health plan, or a taxpayer, it is in our common interest to build a health care system that delivers better care, spends health care dollars more wisely and results in healthier people. Today’s announcement is about improving the quality of care we receive when we are sick, while at the same time spending our health care dollars more wisely,” Secretary Burwell said. “We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement.”
“We’re all partners in this effort focused on a shared goal. Ultimately, this is about improving the health of each person by making the best use of our resources for patient good. We’re on board, and we’re committed to changing how we pay for and deliver care to achieve better health,” Douglas E. Henley, M.D., executive vice president and chief executive officer of the American Academy of Family Physicians said.
“Advancing a patient-centered health system requires a fundamental transformation in how we pay for and deliver care. Today’s announcement by Secretary Burwell is a major step forward in achieving that goal,” AHIP President and CEO Karen Ignagni said. “Health plans have been on the forefront of implementing payment reforms in Medicare Advantage, Medicaid Managed Care, and in the commercial marketplace. We are excited to bring these experiences and innovations to this new collaboration.”
“Employers are increasingly taking steps to support the transition from payment based on volume to models of delivery and payment that promote value,” said Janet Marchibroda, Health Innovation Director and Executive Director of the CEO Council on Health and Innovation at the Bipartisan Policy Center. “There is considerable bipartisan support for moving away from fee for service toward alternative payment models that reward value, improve outcomes, and reduce costs. This transition requires action not only by the private sector, but also the public sector, which is why today’s announcement is significant.”
“Today’s announcement will be remembered as a pivotal and transformative moment in making our health care system more patient- and family-centered,” said Debra L. Ness, president of the National Partnership for Women & Families. “This kind of payment reform will drive fundamental changes in how care is delivered, making the health care system more responsive to those it serves and improving care coordination and communication among patients, families and providers. It will give patients and families the information, tools and supports they need to make better decisions, use their health care dollars wisely, and improve health outcomes.”
The Affordable Care Act created a number of new payment models that move the needle even further toward rewarding quality. These models include ACOs, primary care medical homes, and new models of bundling payments for episodes of care. In these alternative payment models, health care providers are accountable for the quality and cost of the care they deliver to patients. Providers have a financial incentive to coordinate care for their patients – who are therefore less likely to have duplicative or unnecessary x-rays, screenings and tests. An ACO, for example, is a group of doctors, hospitals and health care providers that work together to provide higher-quality coordinated care to their patients, while helping to slow health care cost growth. In addition, through the widespread use of health information technology, the health care data needed to track these efforts is now available.
Many health care providers today receive a payment for each individual service, such as a physician visit, surgery, or blood test, and it does not matter whether these services help – or harm – the patient. In other words, providers are paid based on the volume of care, rather than the value of care provided to patients. Today’s announcement would continue the shift toward paying providers for what works – whether it is something as complex as preventing or treating disease, or something as straightforward as making sure a patient has time to ask questions.
In 2011, Medicare made almost no payments to providers through alternative payment models, but today such payments represent approximately 20 percent of Medicare payments. The goals announced today represent a 50 percent increase by 2016. To put this in perspective, in 2014, Medicare fee-for-service payments were $362 billion.
HHS has already seen promising results on cost savings with alternative payment models, with combined total program savings of $417 million to Medicare due to existing ACO programs – HHS expects these models to continue the unprecedented slowdown in health care spending. Moreover, initiatives like the Partnership for Patients, ACOs, Quality Improvement Organizations, and others have helped reduce hospital readmissions in Medicare by nearly eight percent– translating into 150,000 fewer readmissions between January 2012 and December 2013 – and quality improvements have resulted in saving 50,000 lives and $12 billion in health spending from 2010 to 2013, according to preliminary estimates.
To read a new Perspectives piece in the New England Journal of Medicine from Secretary Burwell:http://www.nejm.org/doi/full/10.1056/NEJMp1500445
To read more about why this matters: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26-2.html
To read a fact sheet about the goals and Learning and Action Network:http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26-3.html
To learn more about Better Care, Smarter Spending, and Healthier People:http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26.html
Participants in today’s meeting include:
In August 2013 I wrote about Rupert Murdoch’s abuse of power and his intense fascination with party politics. That blog is reproduced below.
Rupert Murdoch is a frustrated politician. He loves the political game. Usually he works indirectly through ultra-loyal and uncritical editors and journalists. But new technology, particularly twitter, allows him to indulge his love of political intrigue more personally. The family must hope that sometime soon he will call it a day, but I think Murdoch will persevere to the end.
I can’t recall such a blatant abuse of power as Murdoch’s call on Tony Abbott to sack Peta Credlin. ‘If [Abbott] won’t replace Peta Credlin she must do her patriotic duty and resign’. Murdoch should admit that his unprofessional and biased support of Tony Abbott at the last election was misplaced. But rather than directly state the view he clearly holds about Tony Abbott, he blames a staffer and a woman. What a gallant performance by Murdoch.
This personal attack on Tony Abbott via his chief of staff is even more bizarre than the appointment of Prince Phillip as an Australian knight. Tony Abbott described the social media reaction to Sir Phillip’s appointment as ‘electronic graffiti’. He may think the same now about Murdoch’s social media effort.
Murdoch wants to micro manage Tony Abbott’s office but failed in managing scores of telephone hackers in the London Sun and News of the World!
Every politician that Murdoch supports pays a price in the end. Tony Abbott is now paying that price and his attempts to oblige Murdoch particularly with his attacks on the ABC, count for very little once Murdoch has determined that a political change is necessary.
Perhaps Julie Bishop gave Murdoch an insightful briefing when she called on him when she called on him a few days ago in New York.
Hopefully this latest bizarre twitter effort by Murodch will bring home to him and his family how much he has overplayed his hand. How much more will his loyalist staffers be prepared to accept?
I have no doubt that Murdoch’s intervention will produce a quite contrary effect to what he intends. If Tony Abbott gave way to Murdoch’s demands and sacked Peta Credlin, he would make himself look quite absurd.
Rupert Murdoch’s abuse of power (First published 7 August 2013)
Controlling 70% of Australia’s metropolitan newspapers, one would hope that Murdoch would exercise some responsibility in the use of that power. But none of that responsibility for Rupert Murdoch!
The Australian is the ‘intellectual’ leader of the mad-hatter’s tea party in Murdoch’s Australian media. No matter how badly the government is performing, The Australian can always make it worse. Then the Murdoch tabloids follow.
I worked for Rupert Murdoch for seven years 1967-74 as the General Manager of his Sydney newspaper operations. Looking back on those years, what strikes me most is his convenient memory about important events. The Murdoch media played an important role in backing Whitlam in 1972. Murdoch wanted a favour in return. He raised with me his possible appointment as the Australian High Commissioner to London. He said he would put his newspapers and television interests in a trust so that there would not be a conflict of interest. He also told me that he believed that he could influence other Australian media proprietors in order to avoid flak for the new government. I put Murdoch’s request to Gough Whitlam. In rather colourful language he said ‘no way!’. Rupert Murdoch denies that he sought the London job. I stand by my account. (For more background see ‘Things you learn along the way’ on my website at page 113.)
I had lunch with Rupert Murdoch in Canberra four days before the Whitlam dismissal on November 11, 1975. He told me that he was quite certain that there would be an election before Christmas and an election specifically for the House of Representatives. I pointed out that the half-Senate election was the only possibility. He rejected my view and said that he would be staying in Australia for the election. To reassure me, as I was then the Secretary of Prime Minister and Cabinet, he said that I had no need to worry as I would be appointed in the event of a Liberal victory as the Ambassador to Japan. Malcolm Fraser had obviously told him. About 18 months later I was in Japan as Rupert had predicted. Once again, Rupert denies my account but I stand by it. (See page 157)
What drives Murdoch is that he is really a frustrated politician. He wants to play the political game. He can’t help himself. He is a political addict. He loves the exercise of power. He once discussed with me that he might seek to become a member of the Australian parliament. He was close to Jack McEwen who was the leader of the Country Party. I assumed he would seek Country Party pre-selection for the seat of Hume within which his country residence of Cavan near Yass was situated.
What impertinence it is for the Murdoch media which abuses its power everywhere and hacked telephone conversations up and down the UK to tell the Australian voters in such an aggressive way how they should vote. He leads an organisation without a moral compass.
Rupert Murdoch is not even an Australian citizen. For business advantage in the US, he gave up his Australian citizenship long ago. What role should a grumpy 80 year old American Republican billionaire play in Australian politics today?
In the 1975 election, journalists on the Australian went on strike over Murdoch’s election bias. I wonder if any of his courtiers now, whether executives or journalists, will make a stand for editorial independence and integrity.
In Part 1 of this series I described the areas in our health sector that need reform. In Part 2 I spoke of the obstacles, particularly those imposed by vested interests in the health sector to protect their own interests by delaying or stopping reform. In this article, I will be suggesting ways in which we can overcome these obstacles to health reform. But make no mistake: it will be hard without political leadership and political will.
Don’t rush the process
The political process encourages parties seeking election or re-election to address problems with high political salience – waiting lists in public hospitals, needs among certain groups with chronic illness, and identified funding gaps. The political response is to develop specific proposals, usually involving carefully-calculated calculations of budgetary costs.
Such a process, while providing short-term solutions to proximate problems, fails to address the structural problems identified in Part 1 – the fragmented nature of our health care arrangements, inequities, gaps in services, such as dental care, the allocation of resources towards high-cost hospital interventions at the expense of promotion, prevention and primary care, and the distortions associated with private health insurance.
It also privileges those vested interests outlined in Part 2, who can mobilize resources to block all but the most minor reforms.
Those pursuing reform need to go over the heads of the vested interests and find out what the community really wants, rather than paternalistically assuming that they know what’s best. In recent years the paternalistic assumption has been that the community prefers tax cuts to improved health services, even though evidence tends to point in the opposite direction.
System-wide reform takes time. And it takes open minds. Governments need to realize that even when they can set aside their own financial or professional interests, “insiders” find it hard to imagine any significant departures from existing arrangements. That was a major shortcoming of the Rudd Government’s Health and Hospital Reform Commission. Outside perspectives are important.
In order to lift the process beyond immediate concerns, those pursuing reforms can set out a basic set of principles, and, in a well-managed consultation process, can inform the community of options, and invite the community to discuss and agree or amend these principles. Such a path to reform contrasts with the quick-and-dirty proposals which emerge from processes such as the Abbott Government’s Commission of Audit. Rather, reform can draw on the tradition of white paper – green paper policy development and the reform process pursued by the Hawke-Keating Government. The Senate Committee system should also be utilised.
Guiding principles
As in any public policy the basic principle should be pursuit of efficiency and equity. Contrary to some simplistic notions, there is not necessarily a trade-off between these principles. An inefficient system is a high-cost system, and a high-cost system generally tilts the balance towards those who have most ability to pay. That is the basic failure of the United States system.
Economic considerations should extend beyond governments’ own fiscal costs. Rather they should take into account costs and benefits throughout the community. There is no benefit in saving people $1.00 in taxes through Medicare if the result is that they have to pay $1.10 of $1.50 for the same or inferior services in private markets through PHI.
Equity should be concerned with ensuring that income, wealth or personal influence does not give individuals preference in treatment, displacing those with greater needs but lesser means. A related principle should be one of solidarity or social inclusion. This means that all should have access to the same high-quality services, rather than a segregated system with special services for the poor or “indigent”, to use the derogatory American term. In Australia we should resist most strongly the conservative notion that Medicare should be reduced to a safety net for the poor. The same high quality service should be available for all .While people with different means may make different payments, they should all be using the same services. The present “two tier” arrangements, where those with means are more likely to use private hospitals, violate this principle.
Within such a shared system, there should be scope for users to exercise autonomy and choice, so long as these do not impose costs on other users. Financial incentives on providers and users should not detract from the principles of personal responsibility. Health care services need to be perceived as components of a set of policies promoting good health. In this regard, the community’s health should be seen as an asset worthy of attention in all government policies – taxation, urban design, trade agreements (patents), labour relations and wages policy, social security, environmental protection, sport etc. Public health should be of concern across all portfolios, and health ministers, state and federal, should have the same standing as treasurers.
The government should consider alternatives to fee-for-service remuneration for primary care and other services. The New Zealand Government, for example, pays episodic care by doctors on a fee-for service basis but chronic care is paid on an annualized basis.
Health programs should have a user focus, rather than a provider focus. The user drawing on different services should not have to confront multiple institutions with their own funding arrangements, records and protocols of care. Policies should aim to integrate and not merely coordinate medical services, pharmaceutical care, hospital care and rehabilitation. Such flexibility should be guided by the principle of subsidiarity. That is, services should be managed at the most feasible local level, provided such autonomy does not conflict with needs for central standards in important areas.
Funding needs to be based on a judicious balance between individual (“out-of-pocket”) payments and pooled payments. While a lack of means should never present a barrier to those who need care, there is no reason why those with means should not make personal contributions.
The balance between individual and collective funding is one which needs community consultation. There are arguments for a completely free, tax-funded system, and there are arguments for more individual payments where price signals play a role, but the choice needs to be put to the community in a way that explains the costs and the benefits of each method of payment. Most probably the community, presented with an informed choice, will opt for some balance.
For that proportion of costs the community chooses to share, this sharing should be through a single national insurer, with the capacity to use its purchasing power to keep costs under control, and guided by principles of ensuring access for those with limited means and covering all against high expenses. As with other high-cost and heavily-subsidised industries, such as clothing and footwear, the $7b plus per annum subsidy to PHI should be steadily phased out. If people wand private health insurance that is their right but there is no reason for the taxpayer to provide a subsidy.
While the government should take responsibility for pooled funding, provision of health services should allow for both government and private involvement. In regulated markets private providers should be assured of reasonable returns on their investments (including their investment in human capital), but they should not be permitted to take advantage of any privileged position in the market. Public policies should recognize that commercial incentives which are about expanding markets and good public policy which is often about encouraging personal responsibility and reducing dependence on health services do not always align.
All systems of remuneration, to private or public providers, should be subject to full accountability, and all services should be subject to the general principles of competition policy but without promoting competition where it serves no public purpose, such as a proliferation of look-alike high-cost private insurers. Accounting systems should expose all instances of cost-shifting – from Commonwealth to state governments, from governments to individuals, and from present outlays to future outlays. While there may be reasons for costs to be reallocated between different parties, such reallocations should be for reasons of equity or efficiency, and not for budgetary impression management.
All health care services should be subject to professional governance and accountability, with clear charters of responsibility but at arm’s length from executive government. We really don’t know much about how doctors perform in private practise. We hear about occasional mal practise but very little about general performance and competence.
The related issue of Commonwealth-state relations needs resolution. There are many possible paths to reform. One possibility for consideration is for health services to be administered by joint Commonwealth-state commissions in each state, with pooled Commonwealth and state funding. Tasmania with its small and comparatively aged population could provide the basis for a trial. See link to ‘The Blame Game in Health’ that I posted on 3 June last year https://publish.pearlsandirritations.com/blog/?p=1756/.
The role of institutions
Health reform is too important to be left to health departments particularly the Commonwealth Department of Health and Ageing and bodies with superficial mandates such as the recent Commission of Audit.
Fortunately the Commonwealth has bodies such as the Productivity Commission, an organisation with not only technical expertise to analyse policy proposals, but also with the capacity to sound out those with policy interests. It gives all a forum to voice their concerns, to tease out likely unintended consequences of policy proposals, and to direct corporate interests to contribute to problem-solving and policy design rather than to defending their vested interests. Most important, it can bring an “outside” view to public policy, addressing questions and options that may be beyond the imagination of “insiders”.
While the Productivity Commission can bring forth practical recommendations, the questions in health reform are so basic, however, that they require a wider and more inclusive process before specific issues can be addressed. Questions such as how costs are shared, and how scarce resources should be allocated, particularly for high-cost interventions with minor benefits, involve basic moral considerations.
One possibility is to establish a Health Reform Commission composed of independent and professional people to inform and lead public discussion and advise on important health reform issues. Clinicians should be included, but not the AMA or any of the vested interests. The Law Reform Commission established by the Whitlam Government in 1975 is an example of how enquiries and consultations can be conducted with the community in order to make recommendations to government that are well-informed. The Law Reform Commission estimates that over 85% of its reports have been either substantially or partially implemented making it an effective and influential agent for reform. The Reserve Bank is another example of how a respected, professional and independent body can be a leader in public discussion of important issues. A major objective of a Health Reform Commission would be to outflank the vested interests and carry an informed discussion with the community, particularly of the key principles that should drive health care. Ahead of establishing such a commission in government it would be useful to establish an interim group of professional and independent people who can facilitate informed public discussion and provide advice.
There are various ways to deal with public participation but the basic approach and method is that communities should be consulted to find what they want, and in successive rounds experts should analyse and report back on the costs and consequences of their proposals. For example, explaining that a completely free system would involve higher taxes and may involve greater waiting times.
One other model is the “citizen jury” – so named because the citizens to be consulted are selected on a random basis, and are informed by professional and independent experts. They could be asked to provide their advice back to government on such key issues as: to what extent do we want to share the costs of healthcare; how co-payments should be reformed; how to overcome the commonwealth state blame game; how the workforce should be reformed. End of life issues could also be canvassed as well as many expensive interventions that have limited effectiveness. These citizens’ juries in health could be important vehicles for a national conversation on health, a conversation that we do not have at present.
I see parts 1,2and 3 on Health Policy Reform as outlined as, hopefully, a means to put the debate on health reform onto a more constructive and pragmatic path. Unless we get our processes working more effectively and particularly how to bypass vested interests, reform will continue to be very difficult. When we improve our processes we can be more confident of addressing the particular policy issues outlined in these three papers.
Unless we address the issue of power and how and who exercises that power in the health sector we will not achieve worthwhile reform. Power is in the hands of providers. It is not in the hands of the public or governments. That is the key issue. We need leadership, institutions and processes to focus on how we overcome this central issue.
In Part 1 on health policy reform I outlined the main areas where health reform is necessary. In Part 2 I examine the reasons why I think health reform is so hard. In part 3 I will consider ways in which the necessary path of health reform can be quickened.
There is a major barrier to health reform. It is the power of providers or at least their assumed power. When I was asked by the National Hospital and Health Reform Commission to describe in a sentence or even one word the obstacles to health reform I said ‘power’, the power of providers. I don’t the Commission got what I was driving at!
A succession of Australian health ministers may have been in office but they have not been in power. Aneurin Bevan who launched in the 1940’s in my view the best health service in the world knew a few things about health but more importantly he knew much more about political power and how to exercise it in the public interest. He drew on the strong support of the community, a minority of doctors and the majority of nurses. He won the day and not surprisingly the UK National Health Service was the centre piece at the London Olympic opening ceremony in 2012.
The previous Australian health minister said we needed a conversation on health. The new minister says she will consult widely after the fiasco on co-payments. But if past practise repeats itself the conversation and consultation will be limited to the AMA and the Pharmacy Guild.
The difficulties of sensible reform are obvious in the health field but they are a generic problem in public policy today. It has been most obvious in climate change policy where Ross Gaunaut has described the power of vested interests as a ‘diabolical problem’.
The power of insiders – or the faintheartedness of politicians
Reform disrupts established arrangements. In general, the longer those arrangements have persisted, the greater becomes the pent-up need for reform, meaning that reform is going to be disruptive to existing interests. By the same token, as arrangements become more entrenched, the more do those who benefit from them feel threatened, and the more political clout they develop to resist reform.
That resistance is often based on financial self-interest, but it also aligns with a general fear of change and professional conservatism. It is difficult for those who are “inside” a system – be they administrators, professionals or policymakers – to conceive of other ways of delivering services. Institutional inertia is a strong force. And in health care it is easy to lose sight of the fact that delivering services is not, in itself, the objective. That objective surely is serving the community by helping to keep the population healthy.
One group with a stake in current arrangements are those who administer health services. Health is a highly technical, large and complex field that is difficult for outsiders to come to grips with. This gives disproportionate power to health administrators on the inside.
“Joined at the hip” with these administrators are much the same vested interests (rent seekers) that batten on the health service and dominate the public debate. These are much the same vested interests who so selfishly and ferociously led the opposition to Medibank in 1975. They are still with us today but in a different guise. The AMA has a long and dubious history in opposing key health reforms going back to its opposition to the Pharmaceutical Benefits Scheme In 1942.
These vested interests include the Australian Medical Association (AMA), the Australian Pharmacy Guild, the private health insurance funds, Medicines Australia and the state and territory health department bureaucracies. In addition, there is a general “pro-business” push to open up all aspects of health care more to the private sector, particularly pathology and radiology.
The AMA in its role as a medico- political organisation opposes reform of the fee for service (FFS) system of remuneration. FFS is an administratively convenient means of remuneration, but it carries perverse incentives because it rewards over-servicing, over-referring and over-prescribing. It is particularly inappropriate for care of the chronically ill.
Even among the most dedicated professionals, financial incentives influence behaviour, and tend to reinforce professionals’ desire to apply their skills to problems – rather than encouraging people to become less dependent on health services.
Where possible, financial incentives should encourage practitioners to keep people healthy, rather than to deliver services to the sick. There is no “one-size-fits-all” method of remuneration – FFS has its place, but it should stand alongside other systems, such as capitation and salaried payments.
The perverse incentives in FFS come to play particularly strongly when health care takes on a corporate structure, where business objectives such as return on shareholders’ funds displace professional service objectives traditionally associated with medical practices. Businesses operate on the basis of expanding their markets, not on the basis of telling customers they may be over-using their services. The AMA, however, is turning a blind eye to the growing corporate takeover of general practise and the associated vertical integration into radiology and pathology.
Excuse me for dropping names but in a round table I attended with Margaret Thatcher in the late 1980s she was asked, “Now that you have fixed the restrictive work practices of the miners and the printers, what are you going to do about the restrictive work practices of the doctors? She replied that she would leave it to her last term. She never got around to it.” And so far neither have we.
The Pharmacy Guild strongly defends the privileged position pharmacists have gained through political influence. On the one hand the Guild strongly defends the many restrictions on competition enjoyed by pharmacists – prohibition on pharmacies in supermarkets, prohibition on price advertising, restrictions on location of pharmacies and exclusive rights to sell many non-prescription medications. On the other hand it does nothing to encourage integration of pharmacy with general practice. Thus there persists the anachronistic practice of a separation of pharmaceutical from medical services.
It is not only in retail pharmacy that Australians are overpaying. Governments are also generous with taxpayers’ money for the mainly foreign pharmaceutical firms who are able to exploit their power in patents. Medicines Australia, the body representing manufacturers and distributors of drugs, has successfully lobbied the Commonwealth to pay high prices for prescription pharmaceuticals. Twenty years ago Australia stood out as a world leader in using government purchasing power to keep pharmaceutical prices under control. Now Australia pays top prices: for example, Australians pay $2 billion per annum more than New Zealanders pay for equivalent drugs.
The private health insurance companies are expensive financial intermediaries, receiving a $7b annual taxpayer subsidy through the rebate, and additional support in the form of the Medicare Levy Surcharge, which subsidises those with high incomes to hold PHI. Not even at the height of manufacturing industry protection were people actually given cash subsidies to buy Holdens and Falcons.
Private insurers don’t deliver any health services; they are simply high-cost financial intermediaries taking commissions. As I outlined in Part 1, PHI benefits the wealthy and most importantly weakens the power of Medicare to control prices. Gap insurance through PHI has underwritten an enormous increase in specialist fees. Now the private insurers are edging their way into general practice. The Managing Director of Medibank Private also reportedly told doctors that private health insurance policy holders should have priority in public emergency departments. What an outrageous proposal.
Government subsidized private insurance is a major threat to health care in Australia. At first sight it may appear to relieve public budgets and to take pressure off public hospitals, but that’s not the way it plays out. It actually sucks resources out of the public hospitals. The remeration of most specialists in private hospitals are multiples of the remuneration of specialists in public hospitals. And as PHI pushes up costs, governments, still left with funding a large part of health services, find that they become passive players, accepting prices set by private service providers and insurers. As a result, In the United States the government’s partial programs – Medicare and Medicaid – now cost more as a proportion of GDP than do completely publicly-funded insurance systems in the United Kingdom and many other European countries. The cause of this problem in the US is PHI.
Yet, in spite of this economic danger, and the example of the clearly dysfunctional American system, governments in this country – Coalition and Labor – have been reluctant to take on the PHI industry. Before the 2007 election Kevin Rudd wrote to the industry assuring it that their taxpayer subsidies would continue.
In an economy where many traditional industries, from manufacturing through to print media, are facing huge competitive pressure and disruption, health care is seen as one last remaining growth sector, offering easy picking for business – if only the government would get out of the way.
Those are the private interests. We also have eight state and territory health department bureaucracies supported by their ministers. In a nation where state governments feel that more and more financial and political power is accruing to the Commonwealth, it is natural that they defend their shrinking turf. Such considerations override any concern to see an integrated national system. In response, the Commonwealth is reluctant to stare down the parochialism of the states.
Reform is possible
Australian governments have a strong record on economic reform. In the 1980s the Hawke-Keating Government took on vested interests, and negotiated a wide-ranging set of reforms in the manufacturing, transport and financial services industries. Earlier, in the mid-1970s, the Whitlam Government, when it introduced Medibank, successfully stared down the AMA and the health insurers. Although the Fraser Government unwound many of these reforms, the Hawke Government successfully resurrected universal public insurance in the form of Medicare.
But there has been no significant reform of the health sector since then. In 1977 the Productivity Commission recommended a comprehensive inquiry into health financing, but no government has initiated such an inquiry. Corporate interests have become more involved in health care, and PHI has become established once again.
Governments generally over-estimate the power of lobby groups. They can make a lot of noise – particularly when, as a result of successful rent-seeking in the past, they have accumulated large funds to spend on scare campaigns at the public’s expense, but the capacity to make noise does not equate to a capacity to influence voters. Opinion polls consistently show that the public believe Coalition governments are too much influenced by big business, which means reforming governments should be able to gain electoral advantage from standing up to rent-seekers.
The problem is not just about financial self-interest, however. It is also about the inertia of established practices, and an incapacity of those on the “inside” to imagine any significant variation on current arrangements. Practices such as the separation of pharmacies from medical services, fee-for-service funding, the dependence of private hospitals on private insurance, the separation of medical from hospital services in private hospitals, and so on, have become entrenched in the thinking of policymakers, politicians and many journalists. There is a deficit of imagination, an incapacity to think beyond the present.
A large part of the problem lies in the Commonwealth bureaucracy. Commonwealth Ministers for Health are very dependent on the Department of Health and Ageing, particularly, as is often the case, when ministers are not across the issues and don’t have a clear policy program themselves. Aneurin Bevan showed how important political leadership is.
The Department is ill-equipped to cope with policy reform. Rather, its objective seems to be to keep the peace with provider lobbies, and to keep the minister out of any public brawl or argument.
The Department is structured in ways that reflects the interests of providers such as doctors and pharmacists, rather than on the basis of community interests, such as acute care, chronic care or demography. It has expertise in administering existing programs but it has little economic expertise. Fiscal concerns tend to crowd out any consideration of economics. One very senior Commonwealth official said to me that the Department does not have any strategic sense in health policy.
In fact the Department doesn’t even effectively integrate the Commonwealth’s own major programs, let alone make any real progress in bridging the Commonwealth and state divide. During the difficult negotiations with the states on health reform during the Rudd Government period, the Department of Prime Minister and Cabinet effectively had to step in because DHA was not up to the job. Even the task or rolling out e-health, a minor but important reform, proved to be a difficult one for the Department. DHA sees Medicare as a funding vehicle and not a policy instrument. Medicare is, in fact, is not even within DHA. Health policy is an after-thought and health reform is right off the agenda.
The Ministerial/Departmental model in health has failed. It is incapable of contesting the power of the rent seekers. The community is effectively excluded.
Unless the health debate is taken to “outsiders”, away from the insiders – the rent seekers and vested interests– we are unlikely to see significant progress in health reform. The vested interests invariably win out over the public interest, time and time again.
Political struggles between the public and rent-seekers are not uncommon, but there are reasons why in health care the public interest has a hard time securing a voice. Most of the public most of the time have little contact with health services. The intense users tend to be the chronically ill (who are reasonably active but do not constitute a majority) and those who are nearing the end of their lives and are not in a position to exert political influence. It is unlike services we all experience such as education or transport, where strong public lobby groups naturally arise. Also, health lobby groups are able to exploit the public’s trust in health care provider’s services – a trust which is well-justified on the grounds of professional competence, but which should not logically extend to trust on financial or political matters.
The media stories tend to be about failures – often in public hospitals because they handle the most difficult cases – and about corporate activities. Press releases from pharmaceutical firms, health insurers and other rent-seekers provide easy material for under-resourced journalists. It is easy for governments and so-called “business interests” to raise scare campaigns about the affordability of government health services. They don’t mention that when those services are privatized they are generally more expensive), but it is very hard to engender a debate about health policy. The superficial slanging match about the Commonwealth’s GP co-payments is illustrative of the paucity of the public “debate”.
In Part 3 I will address governance and issues of process which are necessary to break through the inertia and counter the power of the vested interests that batten on the health system.
I will be posting three articles on health policy.
This article outlines the priority areas where reform is necessary.
Part 2 will explain why reform is so difficult but not impossible. The key issue is power and how it is exercised
Part 3 will be about processes and governance issues that are necessary to move us beyond the present inertia, incrementalism and tinkering, with suggestions for policy directions. I will not be proposing specific policies.
The Rudd-Gillard Government – lost opportunities
Traditionally, in Australia and elsewhere, Labor and similar governments have been the initiators of health reform. Conservative governments, in general, have opposed or wound back health reform.
In Australia the Labor Party, guided by principles of universalism, equity and economic efficiency, gave us publicly-funded health insurance – initially through Medibank and then through Medicare.
In spite of high expectations in health reform, however, in its 2007-2013 period in government Labor really did little more than muddle through. Kevin Rudd promised to take over state hospitals if the states continued to stonewall, and polling suggested that the public agreed with his approach. But in the end he gave way: fragmentation of services between the Commonwealth and the states continued, as did the practices of cost and responsibility shifting between those two tiers of government. He focussed on hospitals and not on primary care.
The Rudd Government established a National Hospital and Health Reform Commission (NHHRC), but it was composed largely of health insiders who seemed to be incapable of seeing health policy from a broad perspective, and who failed to grasp the basic economics of health care. The process achieved very little and chewed up a great deal of time and money. It was a wasted opportunity.
To its credit the Rudd and Gillard Governments had one major policy achievement – plain-packaging of cigarettes, and before it lost office was making progress on other aspects of public health. The success of these public health reforms, in contrast with the minor achievements of health care programs, is consistent with the possibility that reform of these programs is impeded by institutional inertia and the power of rent-seekers, a point taken up in Part 2. The tobacco industry is well-heeled, but it does not have friends in health departments.
Case mix funding to improve hospital efficiency was also a useful reform
Indigenous, mental and rural health all remain in a parlous state. Health programs operate in isolation from one another. The funding of health care through multiple public, corporate and private channels results in serious inequities. And, in general, there are administrative inefficiencies and a poor allocation of scarce resources.
Since 2013 the situation has worsened. The Abbott Government has abolished the Australian National Preventive Health Agency and Medicare Locals, has foreshadowed deep cuts in funding for state hospitals, and has put up ill-considered proposals for GP co-payments.
Getting the most from what we have
In considering health reform, we need to start with an appreciation that we have one of the best health services in the world in both efficiency and equity, thanks to Medicare. But Medicare was established over 40 years ago. It is now a bits and pieces operation – some parts added in good times and with cut-backs in difficult times. Some additions have been made by Labor governments and some by anti-Labor governments. There is little coherence or consistency in what we have at the moment. Our health care arrangements could not be called a ‘system’. They have no clear and underlying principles or philosophy.
As a result of that lack of coherence and fragmentation there is waste in our health care arrangements. Nurses, doctors, paramedics and others are all working hard and professionally, but there are managerial inefficiencies and high bureaucratic costs in both the private and public sectors: I have estimated that reforms would result in a saving of at least ten per cent of our health bill or about $15b in today’s costs. Abolition of the taxpayer subsidy of over $7b per annum to private health insurance would represent about half of these savings.
But a big waste is in misallocation of scarce resources. Capacity to pay often overrides consideration of therapeutic needs. Governments seek savings in public health and primary care – savings which are more than offset by higher needs for hospitalization and high cost specialist care. Demarcation rigidities result in overwork for some and under-utilisation of skills for others such as nurses. In all, the whole is far less than the sum of its parts.
Seldom do we stand back and ask the central issue: what do we need and expect from a health system? That question should be a starting point for reform.
The concerns of health policy – a system approach
Incremental reforms addressing real or perceived shortcomings in particular programs, even if they achieve some economies, are going to do no more than to perpetuate existing problems. Reform needs to cut across programs, and concerned with the following six issues.
1. Primary care. Primary care has been largely ignored in health reform. It should be the starting point for any consideration however of preventive health and chronic care. Early interventions and health check-ups can head off costly and debilitating illnesses.
Specialist care has become very expensive. We have an obsession with hospitals. But hospitals should be the last resort rather than the first. Countries such as the United Kingdom and New Zealand have high quality care in part because of the philosophy underlying their systems, but also because those systems are grounded in primary care, which is the most efficient and equitable way to deliver health services for all regardless of income. It is where care is best integrated.
Fee for service (FFS) remuneration in primary care has encouraged “turnstile medicine”, excessive treatment and increasingly the corporatisation of general practice. FFS is a major barrier to reform in primary care. FFS may be appropriate for episodic or occasional care for walk-in patients but it is not appropriate for chronic and long term care, particularly mental and indigenous health care. Our governments have failed in this key area.
A major barrier of course to improved health services through primary care is that the Commonwealth funds GPs and other medical services, other than those in public hospitals, while the states operate public hospitals. There are substantial savings in keeping patients out of hospitals but with different funding steams there are few incentives to do so. In fact, when the Commonwealth is more concerned with its fiscal balance than with sound economics, it has every temptation to skimp on primary care, essentially imposing higher costs on the states and poorer health outcomes on the community. The Commonwealth’s fiscal obsession has outweighed any sense of economic responsibility
2. Workforce. Health is the largest and fastest growing sector of the Australian economy. Its structure and workforce are riddled with 19th Century demarcations and restrictive work practices. For example there are several hundred nurse practitioners in Australia when there should be thousands, performing routine functions such as administering regular vaccinations. About 10 per cent of normal births in Australia are delivered by midwives: in New Zealand that figure is over 90 per cent.
We don’t have a shortage of doctors so much as a misallocation of doctors. Nurses, allied health workers and ambulance staff are denied opportunities to upgrade and realise their professional potential and improve services.
Pharmacies should be providing more basic health services for the community and should be active partners with doctors in the front line. Pharmacists are the most underutilised and highly-qualified professionals in our health sector. They need to be integrated into primary health care.
There will never be adequate delivery of service to people, particularly the aged, without radical workforce reform, mainly within primary care. As Minister for Health, Nicola Roxon enabled some nurse practitioners and midwives to access the Medical Benefit Scheme but the access was quite minor. The MBS can be the lever for major workforce renewal.
It is quite remarkable that we have endless talk about the need for workforce reform everywhere but in the health sector. Surely governments could not be frightened of the AMA! In our modern economy the restrictive work practices and demarcations in the health sector are a disgrace.
3. Program structures. Health services are structured and funded around providers – medical services by doctors, pharmaceuticals through big Pharma and the Pharmacy Guild, and hospitals through state governments and private agencies. The structure of the Department of Health and Ageing reflects this provider focus rather than a focus on consumers.
Such a provider-based structure, rather than a user- or customer-based structure, is reminiscent of corporate structures abandoned in the private sector a half-century ago, and is inconsistent with the “outcomes” focus of public sector reforms of the 1980s. Yet it survives in the health sector with the only institutional recognition of consumers is through the Health Consumers Forum of Australia, a body funded by the Commonwealth and which seems more like a marketing arm of the Department of Health and Ageing than a group representative of consumer interests.
We need to progressively change the focus of health programs to serve the community rather than providers. One possible structure would be around types of users – acute, chronic and occasional. It would help reduce the competition between different provider areas for limited resources. The Department of Health and Ageing shows no serious interest in consumers but together with the Minister always seems to have an open door for the rent seekers such as the Pharmacy Guild.
4. Funding. Funding of health services is a mess, resulting in serious inequities, high administrative costs, and misallocation of scarce resources. Some services, financed either through private health insurance or Medicare, are free at the point of delivery, while others can leave consumers with massive out-of-pocket expenses.
We have some of the highest co-payments in the developed world but they lack rhyme or reason. They are a “dog’s breakfast” with the level of government subsidies varying enormously. Some co-payment arrangements work on a safety-net basis, while others, such as for psychologists, leave the consumer bearing open-ended risks. The Abbott Government’s “reforms”, if implemented, would make the situation worse. Medical and pharmaceutical co-payments have little in common, and dental services are much more poorly funded than medical services. The safety nets are unfair and lead to abuse.
Persons on high incomes should pay more for health services through efficient and defensible co-payments. A “universal” service does not necessarily mean it should be free. Subject to a means test, there needs to be more discipline by consumers in their use of health services. Jennifer Doggett at the Centre for Policy Development has proposed workable means-tested reforms in this area with a Health Credit Card. See http://cpd.org.au/2009/07/out-of-pocket-rethinking-health-copayments/ There is no sign the Commonwealth is concerned about the problem however, even though most other countries have better models to emulate. The Nordic countries, for example, insist on a single public funder and universality but with efficient and equitable co-payments.
The other great funding distortion in Australian health care arrangements is private health insurance (PHI) – essentially a high-cost mechanism which allows some, particularly those with high incomes, to jump the queue for health services, thus worsening waiting times in public hospitals and diverting resources to private hospitals, contrary to the claim that it takes pressure off public hospitals. It penalises country people because there are few private hospitals in the bush. Australia’s arrangements also mean that private and public hospitals operate on different funding streams and with little integration of services.
The government, through means testing rebates for PHI, has removed some inequities, but PHI remains a costly and inequitable way to do what the tax system and Medicare do much better. Also, PHI is administratively inefficient with bureaucratic costs about three times higher than Medicare.
Private gap insurance promoted by PHI has facilitated enormous increases in specialist fees. Most importantly, the expansion of PHI progressively weakens the ability of Medicare to control costs. The evidence world-wide is clear that countries with significant PHI have high costs without any better health outcomes.
The stand-out example of PHI causing high costs and poor outcomes is the United States. President Obama may have substantially achieved universal coverage, but PHI with its lack of cost control will ultimately cripple and finally destroy his reforms. Warren Buffett has described PHI companies as the “tape worm” in the US health sector.
The Commonwealth already has a sound model of a single payer operated through the Department of Veterans Affairs – a model which retains the strong control of a single payer accountable to the community whilst allowing private practise involvement in service delivery.
The Commonwealth has failed to understand the damage that PHI is already doing in Australia. PHI is a Damocles sword hanging over Medicare. We must assert the key importance of a single public funder.
It is interesting to note that the $7b plus per annum taxpayer subsidy to PHI is more than would be required to fund a Medicare dental scheme!
5. Defining Medicare. This great Labor monument needs a review. Medicare has become a passive but efficient funding mechanism, providing a partial subsidy for certain health expenses, rather than the public insurer it was intended to be. After all, it is still called the “health insurance commission”, but it is nothing of the sort, and it is not even within the health portfolio.
Medicare has a remarkable database which should be used to highlight and inform policy concerning over and underutilisation of services across the country. Why for example do rates of caesarean section vary enormously across the country and why are Australian rates very high in world rankings? There are many other large variations in clinical procedures that must be made public and explained. Medical services should be subject to the same rigorous cost-benefit examination as pharmaceutical services. Medicare is not doing it.
Even more potential lies in the use of that database for research into efficacy of treatments. This was an intention of Medicare’s designers, who envisioned the day when computing power could extract clinical information from that database. That day has arrived, but the government, although willing to invest billions in some areas of medical research, shows no interest in using this valuable resource, or in the integration of MBS and PBS data which would provide rigorous pharmaceutical evaluation at a tiny fraction of the cost of clinical trials.
6. Cost and blame shifting. Governments, more concerned with their fiscal balances than with economic efficiency, try to shift costs on to other governments, Commonwealth to state and vice versa, on to individuals, or on to future generations for example in neglect of public health. Attempts to resolve the Commonwealth/state blame and cost shifting have been largely unsuccessful and certainly expensive with the Commonwealth succumbing to state political pressure without fixing the lack of integration.
In Part 2 I will be looking at the major obstacles to health reform, including the influence of the vested interests who are concerned to protect their own territory rather than serve the public interest.
Conservative commentators and the Business Council of Australia speak endlessly about the need for industrial and workforce reform particularly in the blue-collar area where there has already been very substantial reform and improvement. Changes in the Australian workforce have helped transform the Australian economy in the last 30 years. It was begun under the Hawke/Keating governments and continued under the Howard governments.
But the health sector has scarcely been touched. I ‘guesstimate’ that there is a potential productivity dividend of at least 40% in health workforce reform over the next decade. That 40% may be on the low side. The Productivity Commission estimated a few years ago that a 10% efficiency improvement in health would deliver an $8 b dividend at that time.
Reform of the health workforce structure, work practices, multi skilling, teamwork, and flexible training, are the key micro-reform issues that we face. The most obvious example of restrictive practices in health is in obstetrics and midwifery. In Australia, less than 10% of normal births are managed by midwives. In the Netherlands it is over 70% and in the UK over 50% In NZ it is 90%. The reason why Australia is so far behind the field is opposition by obstetricians who want to protect their market share and high incomes. They are highly favoured through the Medical Benefits Scheme.
Health is Australia’s largest industry, and employs about 7% of the civilian workforce. About 70% of every health dollar of expenditure is in labour costs. Such a large area of expenditure cannot be excluded from workforce reform. It is more important than any other workforce issue. Health workforce reform will not be easy but it is essential. Above all else it requires political courage to face down the special and entrenched interests that dominate the health sector.
Several years ago, an emeritus professor at University of Sydney, Professor Kerry Goulston described the problems he saw as follows.
Our medical workforce management in hospitals is rigid and antiquated. Job sharing is rare. … Most hospitals are staffed on the front line at nights and weekends by junior medical staff, often without onsite supervision…. The traditional roles of doctor, nurse and allied health personnel have to be redesigned around the patients’ needs. Many procedures carried out by doctors could be done by non-doctors. Many medical duties could be done by other health professionals. In places where it has proven impossible to recruit doctors, nursing staff have been upskilled to provide a higher level of clinical care. It is clearly possible to extend this model for use in public hospitals where better supervision is available, but would require a reduction in the strict demarcation of clinical roles. … The morale of our hospital workforce is low. Disengagement and loss of commitment is a real issue.
We clearly need to dramatically reshape our health workforce. The Productivity Commission made the first serious attempt to address the problem. But progress has been very slow.
My own view is that the financial lever of the Medical Benefits Scheme is the best way to promote reform. Nicola Roxon made a few changes in this regard but it was quite minor.
We need concerted and strong political and administrative action to break down the old historic workforce boundaries and boxes and establish new ways of working – teams working across professional and organisational boundaries; flexible working to make the best use of the range of skills and knowledge of staff; streamlined workforce planning and development which stems from the needs of patients not of professionals; maximising the contribution of all staff to patient care, doing away with barriers which say only doctors or nurses can provide particular types of care; modernising education and training to ensure that staff are equipped with the skills they need to work in a complex, changing health system; developing new, more flexible careers for staff in all professions; expanding the workforce to meet future demands and more flexible deployment of staff to maximise the use of their skills and abilities. .
We need for example to consider nurses undertaking greater responsibility for prescribing, diagnosis and triage in hospitals; nurse anaesthetists complementing and substituting for medically qualified anaesthetists; enrolled nurses taking on some of the tasks currently done by registered nurses; midwives substituting for obstetricians; new allied health assistants supporting allied health workers to increase their capacity to treat more patients; practice nurses undertaking some of the work currently performed by GPs, including some prescribing, screening and triage.
Professor Peter Brooks has drawn attention to the 60,000 physician assistants in the United States who grew out of the ‘medics’ in Vietnam. They are trained for about two years in 100 professional programs across the United States, concentrating on science and clinical aspects.
Clearly nurses, allied health, ambulance officers and community health workers could undertake more skilled work except for the barriers erected by other professionals. Pharmacists need to employ their professional skills in primary care with less of their time spent as shop keepers.
The great problem is that our health and community services workforce is trained and works in boxes – ‘there are boxes everywhere’. We need dramatic change, up-skilling, multi-skilling, broad banding and teamwork.
Failure to tackle these major workforce problem results in clear loss of morale and high staff turnover across the health and community sector. We see the problems like the tip of the iceberg, only when they are revealed before a court or medical board. The powerful sectional interests still call the shots and resist change. If they had blue collars, rather than white coats, the story would be different.
What is lacking is courage and determination to address the problem. Excuse me dropping names but in the late 1980s, I attended a round table discussion with UK Prime Minister, Maggie Thatcher in Sydney. She was asked ‘now that you have reformed the work practices of the printers and coal miners in the UK, what do you propose to do about the restrictive practices of doctors and lawyers?’ She replied, ‘It is a very serious problem, but if you don’t mind I will leave it until my last term’. The coal miners and printers were fair game, but not the doctors and lawyers who were put in the ‘too hard’ basket.
The health and community workforce structure is at the end of its design life. The whole health system is built around provider demarcations. It must be efficiently built around patients’ needs.
This is part 2 of a series on health prevention. It was initially posted in October last year. John Menadue.
Yesterday, in part 1, I began the task of analysing the cuts to the Commonwealth’s health budget and to the promised payments to the States and Territories in the area of prevention. Are the cuts well justified by the statistics?
Obesity – Nutrition and Physical Inactivity
Other than tobacco and excess alcohol consumption, the rising rates of obesity are the most concerning statistics in the area of preventable diseases. People’s diets and their levels of physical activity both contribute to obesity and overweight. By mid 2012, almost two thirds of Australians over 18 years were either overweight or obese according to the Australian Bureau of Statistics, a significant increase from a decade ago. The current combined level for obesity and overweight is 63% for adults (70% of men and 56% of women). Of children between the ages of 5 – 17, about 18% are overweight and 8% are obese; this is very bad news, but at least it isn’t worse news – these numbers for children are largely unchanged since 2007-08. Unsurprisingly, a clear pattern of socio-economic disadvantage is visible: the prevalence of obese children, for example, is four times higher in disadvantaged areas.
Australia is now in the top league tables in the obesity stakes, still lower than the United States but we’ve been catching up fast.
On specific metrics for exercise and nutrition, the AIHW (Australian Institute of Health and Welfare is also being abolished as a standalone statutory body by decision of the 2014 Budget with the functions to be amalgamated in a mega ‘productivity and performance’ entity) reported this year that: 92% of Australians did not eat 5 serves of vegetables per day and 52% did not eat 2 serves of fruit; and only 43% of adults were active enough to meet recommended guidelines of 150 minutes per week of walking or other moderate or vigorous activity.[1]
The nation has a long way to go on the obesity problem. Dutton often cites the alarming obesity statistics – but mainly as a precursor to argue for his plans to charge people more for primary care from their GP – which is of course where a lot of prevention advice is given and where lower-income people are most likely to go. Given the current minister is well aware of the problem, presumably there are major initiatives to tackle obesity. However, there is no evidence in the federal budget of anything much being done. Perhaps the government is making good on its comment that this is a matter for people’s personal responsibility.
Other Risk Factors
There are of course other risk factors both behavioural and biomedical – eg. high blood pressure, high cholesterol, high salt intakes – but it is in particular the key risk factors described above which drive the major increases in chronic disease. So while not unimportant, the Commonwealth, States and Territories chose to focus their efforts and funds on the SNAP behavioural risks that could potentially be influenced in a better direction.
Where to now?
So, with the data under our belts, does the picture suggest less attention or a reduction in funding for prevention activity? The answer is self-evident. More emphasis on prevention is clearly in order. And that is what most countries are doing – increasing considerably their attention to the difficult area of lifestyle risk factors in order to counter the significantly increasing burden of preventable chronic diseases. The head of the World Health Organization, Margaret Chan, has noted that chronic noncommunicable diseases have overtaken infectious diseases as the leading global cause of morbidity, disability, and mortality and stated that “prevention must be the cornerstone of the global response.” So what’s going on in Australia? Why this attack on lifestyle-related prevention activity.
There are perhaps two interrelated answers.
That the Abbott Government is proving to be highly ideological – not a feature of their campaigning before the election – is hardly a matter for debate any longer. The extent of the ideological thrust is however a surprise to many as is the extent of the influence of the far right think tanks like the Institute of Public Affairs. The IPA had waged a highly visible campaign against nanny state prevention activities in the election lead up. During the Budget, the ideological tenor of the government was especially on display when increasing spending. More money for medical research! Terrific idea? In principle, you’d think so. But the funds are for Medical – big M – research; Dutton made clear that it’s a Medical Research Future Fund – not a Health Research Fund – which is far more likely to rule out research into, for example, factors influencing behavioural elements like fast food or alcohol consumption. Particularly ironic (depressing) – but sending the clear ideological message – the savings from killing off the COAG Preventative Health Partnership and abolishing the national Prevention Health Agency are being directed into the Medical Research Future Fund according to Budget Paper #2.
Just as worrying, and well documented by others, is the influence of the alcohol and food industries on the government (see for example Big Food with a regional flavour – how Australia’s food lobby works). The embarrassing Fiona Nash’s behaviour in hiring a junk food lobbyist as her chief of staff was probably just the visible tip of a very large iceberg. Her hamfisted attempt to delay the website and possibly wipe out the food star labelling system – and this is a voluntary system for the industry! – created the first scandal for the then new government. Given the level of control over ministerial staff appointments out of the PM’s office, one could suppose the PM thought there was no problem with having a junk food voice so intimately involved in the food minister’s work — a supposition largely confirmed in his refusal to have his non-performing junior minister resign over the matter. (As an aside, however, his reluctance could well be compounded by that fact that there are rather few women in the ministerial club and losing one – and a Nat at that – might have been rather problematical). At least they don’t let Nash out in public very often – although her launching of the most recent phase of the national tobacco campaign from a party base that still accepts Big Tobacco funding had a number of us seriously exceeding the NHMRC alcohol guidelines for single occasion risk!!
Where the industry influence and the ideology will take us eventually is probably not to better health outcomes. Cuts to areas like prevention, just like undermining investment in newer green technologies, do not have outcomes that are immediately visible – the negative results take some time to manifest. Eventually, our performance or rather lack of it, in prevention will become evident in the burden of disease measures and in comparison with other countries who are diligently tackling the tough lifestyle issues. The actions of an ideological government, out-of-touch with international evidence and action on these matters, is not likely to serve Australia’s longer term interests.
[1] Australia’s health 2014, AIHW
This repost is an outstanding article on prevention that I originally posted in October last year. Part 2 will follow tomorrow. John Menadue
One of the more curious decisions of the Abbott Government in its 2014 Budget was the decision by Health Minister Peter Dutton to reduce Commonwealth expenditure on prevention.
Funding for population health broadly is set to decline substantially – although the brunt of the cuts are for later years and the real devil is in the finer detail.
For the Commonwealth Department of Health in Outcome 1 – Population Health, the pain in the first full Dutton year is minimal – a decrease from $167M in 2013-14 to $166M in 2014-15 – peanuts! But even in this set of numbers, there are interesting messages. Prevention includes activities that “look like” medical work, for example immunisation and cancer screening programs. These areas were largely protected.
But prevention also includes the more difficult and contentious health promotion tasks – regulatory policy for alcohol and tobacco and food (which requires examining industry behaviours like advertising of junk foods, salt levels used in processed food, and alcohol promotions) as well as programs targeting people’s lifestyle choices in areas such as smoking, alcohol use, physical activity and eating habits. As we saw last week with Liberal Democrat Senator David Leyonhjelm’s outburst on “excessive’ smoking taxes and his right to accept Big Tobacco donations, these lifestyle messages and the regulation of these industries in the interests of population health is political by definition and is likely to be an anathema to libertarians and the hard right. The imagery reached for is that of a ‘nanny state’ – see the Institute of Public Affairs (another recipient of Big Tobacco largesse) for a detailed exposition of the position.
It is this latter area of work that took the real Budget hit.
Programme 1.2 of Outcome 1 (for us non-bureaucratic mortals this is the part of the budget dealing with drugs like alcohol, education against illicit drug use, and tobacco) was reduced from $224M in 2013-14 to $161M in 2014-15. And it goes on. This area will be further reduced to $131M by 2017-18 according to the forward estimates – a decrease in nominal terms of over 40% – while some of the other population health activities actually see some modest increase in that period. The axe is being swung not only at the federal level. With the Dutton death blow to the COAG[1] Partnership on Preventative Health, some $400 million of promised funding for the State and Territory Governments’ lifestyle prevention initiatives were axed as well – programs in particular focussed on children’s physical activities, community exercise and nutrition initiatives, education about lifestyle related risks and so on.
Is there good logic to this – why cut prevention rather than, for example, reducing funding for some of the 150 low-value medical interventions that have been identified?[2] Had the need for work in prevention lessened? Were the metrics now moving so clearly in the right direction that government could turn its attention (and money) elsewhere? Almost all other developed countries had also been significantly increasing their attention and expenditure on prevention in the 21st century, were they cutting back too?
SNAP – but no crackle and pop
In 2011, the primary driver for establishing the National Partnership on Preventative Health was the alarming increase in preventable chronic disease related to people’s lifestyles. These lifestyle issues – in particular Smoking, poor Nutrition, Alcohol misuse and Physical inactivity – the SNAP lifestyle risk factors – already accounted for some 40% of potentially preventable hospital admissions according to the Australian National Preventive Health Agency (not just a cutback but abolished in the 2014 Budget). The growth of lifestyle diseases worrying those watching health expenditure were primarily in diabetes, various cancers, COPD, strokes and other preventable cardiovascular system diseases.
Let’s check how the SNAP risk factors are doing.
Tobacco
Tobacco reduction strategies are the star performers on a population basis – a national decrease from about 35% in 1980 to 16% in 2012. That’s one of the lowest adult smoking rates in the world. But with some big holes. The COAG Reform Council, whose job was to assess performance of governments against their stated targets (the Council was also abolished in the May 2014 Budget), reported on the performance of the Preventative Health Partnership in 2013 and noted that Indigenous smoking rates were much higher than those of the rest of the population – still over 40%. Also important were socio-economic factors – if you are in the lowest socio-economic demographic, you have a 25% likelihood of being a smoker as compared to a someone in a more advantaged situation. Further, the city-country divide is extraordinary. The National Health Performance Authority (to be abolished as a standalone statutory body by decision of the 2014 Budget with the functions to be amalgamated in a mega ‘productivity and performance’ entity) reported in October 2013 that in areas such as the Grampians, smoking rates were 28% as compared to city areas such Inner West Melbourne where the rate was 8%. In general, on most of the risk factors for chronic disease, the further from the city you live, the less healthy you are likely to be![3]
While overall population figures might suggest that smoking is largely ‘done’, what the more granular data suggest is that success has been high in higher-income higher-educated urban populations and that significant effort is needed elsewhere where rates look like statistics from 30 years ago. Some focused attention was in fact occurring, in part. A major initiative – Tackling Indigenous Smoking – spearheaded by Tom Calma – was rolling out across Australia; it has had its expansion “paused” to undergo a review of its efficiency during 2014. One note of optimism: although not quantified in terms of expenditure, the May 2014 Budget committed to continue Australia’s defence of the plain-packaging of tobacco cases brought within the WTO and bilateral trade treaty arrangements.
Alcohol
There’s good news and bad news on alcohol. The evidence about alcohol as a risk factor has been mounting, and it’s a Group 1 carcinogen (ie good evidence it’s harmful to humans). This led a couple of years ago to a tightening of the guidelines from the NHMRC on alcohol consumption (the NHMRC is a medical research funder – and medical research is Abbott’s favourite thing – so it wasn’t significantly cutback, planned to be amalgamated or otherwise mauled in the Budget apart from the plan to set up a duplicating bureaucracy in the new Medical Research Future Fund).
Harmful consumption of alcohol has two forms – long-term consumption at risky levels and single occasion risky consumption (basically binge drinking). Latest stats are that about 20% of the population continues to drink at levels risky to their long-term health – pretty well unchanged from the ABS results in 2007-08; half of males and one-third of females drank riskily for single occasion risk. These are quite high statistics at a population level. The good news is that since the 1970s, our per capita alcohol consumption has declined although it remains above the OECD average.
By far the most concerning SNAP areas are the ones leading to the disturbing trends in obesity and overweight. Both nutrition and physical activity contribute to obesity – more on the statistics and their implications in the next blog tomorrow.
***************
[1] Council of Australian Governments
[2] Elshaug AG, Watt AM, Mundy T, Willis CD. Over 150 potentially low-value health care practices: an Australia study. Medical Journal of Australia, 20212; 197(10): 556-560.
[3] Risk Factors Contributing to Chronic Disease, AIHW, 2012.
The recent murders perpetrated in France have been rightly condemned by all people who take seriously morality and human rights. However, the accompanying discussion of the right to freedom of speech has reflected different points of view. For some the right to freedom of speech means the claim to be free to say whatever one wants to say, whether this injures the rights of others or not. This view can justify any kind of remark from adolescent attempts to shock to the inane “sledging” in which our politicians so frequently indulge. The right to freedom of speech as a right has meaning only in the context of justice.
Does it make sense to claim, as Amanda Vanstone does, that we cannot realistically support Charlie Hebdo and not support Brandis’ contention that everyone has a right to be a bigot to express that bigotry? (The Age, Monday, January 19, 2016, p. 16). Justice would require that we construct and support the social and legal institutions that are needed to protect journalists from violent attacks. But justice does not require us to accept whatever an individual or group might want to say. Justice clearly does not require us to accept the inflammatory rhetoric of the propagators of jihad. A bigot is defined by the Concise Oxford Dictionary as one who holds some view irrespective of reason and attaches disproportionate weight to that view. Other dictionaries add to the definition intolerance of other views. Since the bigot is by definition irrational in the views he holds, he cannot ask rational persons to listen or to take any notice of what he says. Similarly, he cannot demand that otherwise tolerant persons and communities tolerate his own intolerance; he has set himself outside the tolerant community. The appropriate sanction for the bigot is to ignore him since he has declared himself immune to reason and to vote against him if he, or she, should seek election.
The statement: “I disapprove of what you say, but I will defend to the death your right to say it,” has been cited frequently in connection with the recent events. The words are often attributed to Voltaire, but Voltaire did not say this. To accept this literally, would mean declaring oneself ready to defend to death the right of the jihadi to continue his rabid discourses. To better understand the right to freedom of speech it is worth recalling Voltaire’s own campaigns. A most notorious case was that of the French Protestant Jean Calas. Calas was falsely accused of murdering his son in order to prevent his converting to Catholicism. After being tortured, which included “water-boarding,” Calas was condemned by the court of Toulouse to death and tortured to death by being broken on the wheel. Voltaire took up the case and defended Calas. The verdict was eventually overturned. In 1765 Calas was posthumously exonerated of all charges. This was a genuine exercise of the right to freedom of speech on the part of Voltaire. The basis of the right to freedom of speech is an obligation in justice to use speech in defense of the violation of the rights, those of others or one’s own rights in justice. The assertion, “Everyone has a right to be a bigot,” is rightly rejected as nonsense.
The recent gathering of European leaders in Paris was no doubt a genuine gesture of solidarity with the victims and a protest against violence. It was also a manifestation of commitment to freedom of speech. It is easy to proclaim one’s support for this freedom; but such proclamations are empty unless one uses freedom of speech on behalf of justice. For example, none of the three, France, Britain or the U.S.A., have an unblemished record on this. Both the French and the British governments have suppressed freedom of speech. The most egregious examples have been in relation to torture, which both governments and their agencies have condoned.
The practice of torture and killing carried on by French officers in Algeria during the conflict that preceded Algerian independence was documented by the French-Algerian journalist Henry Alleg in his book La question. When the book was published French authorities banned it. The celebrated 1966 film The Battle of Algiers that depicts the torture carried out by French commanders Massu and Aussaresses was banned and shown uncensored only decades later. President Hollande has called colonial rule in Algeria “brutal and unjust” but did not apologize for its violations.
Aussaresses taught his torture methods throughout the world. The notorious U.S. Phoenix Program in Vietnam applied the French tactics of interrogation, torture and summary execution. He also instructed the Chilean secret police under Pinochet. Unlike Aussaresses, his commander in Algeria, Massu eventually abandoned his defense of torture and urged the French government to condemn its use in Algeria. Former French soldiers admitted that the torture they practiced had produced a mass of misinformation and that the lives they may have saved were far outnumbered by those taken by the new terrorists they created.
http://www.thedailybeast.com/articles/2013/12/04/french-torture-mastermind-paul-aussaresses.
In 2013 the Guardian revealed that the British government was still concealing secret government files from the closing period of colonial rule. These included documents concerning the mistreatment and torture of Kenyans suffered during the Mau Mau insurgency. The foreign secretary William Hague promised that these documents would be declassified and opened to the public. Elderly Kenyans were trying to sue the British government for compensation.
The files that were withheld are part of a cache of documents that were hidden in a secret archive of the Foreign and Commonwealth Office (FCO). This was in violation of the laws that govern the handling of official papers. Hague ordered an inquiry and promised disclosure.
He told MPs: “I believe that it is the right thing to do for the information in these files now to be properly examined and recorded and made available to the public through the National Archives. It is my intention to release every part of every paper of interest subject only to legal exemptions.” The documents were not released. The Foreign Office held back the documents, claiming a legal exemption based on a clause within the same law that it broke by maintaining the secret archive in the first place.
(http://www.theguardian.com/uk/2013/apr/26/national-archives-colonial-documents-secret)
The mistreatment and torture was revealed in a book by Caroline Elkins in a book published in 2005 entitled Imperial Reckoning, the Untold Story of the British Gulag in Kenya. Eventually, in 2013 a judge compelled the Foreign Office to release its documents. The British government made an unprecedented apology and agreed on a settlement. Each surviving victim received about $4,000. Elkins reported that the official documents confirmed, in explicit detail, the accounts of victims, both male and female, that she had collected. There was “forced sodomy with broken bottles and vermin and snakes and just horrific, horrific things,” she says. “So not only was it absolutely wrenching to read these, but it was also validating on so many levels and particularly that the British government had been calling them liars,” she says, “All the while sitting on the evidence proving that they were actually telling the truth.”
(http://www.npr.org/2013/06/09/189968998/britain-apologizes-for-colonial-era-torture-of-kenyan-rebels.)
The U.S.A., the Senate Intelligence Committee report on CIA torture is an historically significant example of the exercise of the right to freedom of speech by a government body. A 525 page portion published on December 9th. 2014 included key findings and an executive summary. However, the rest of the document remains classified. It will be interesting to see whether a fuller publication will ever follow. Governments have seldom been exemplary practitioners of freedom of speech.
Voltaire would have found an appropriate pungent phrase for this kind of official behaviour regarding freedom of speech. Caroline Elkins and others like her have taught us what freedom of speech really means.
Brian Johnstone is a Catholic priest who taught moral theology in Rome for nearly 20 years. Currently he teaches at the Catholic University in Washington.
Bridging our growing divide: Inequality in Australia is an important report tabled without fanfare in the Senate by its Community Affairs References Committee. The report is clearly argued and well-buttressed by data and references. The points it makes about an issue central to the kind of society we are developing in Australia deserve wide community discussion.
The inquiry terms of reference called for a review of the extent of income inequality, the rate at which it is increasing and its impacts on access to health, housing, education and work.
The senators were also asked to inquire into specific impacts on disadvantaged groups. These included the likely impact of government policies – especially 2014-15 budget measures – on rates of inequality, the principles that should underpin social security payments and practical measures that government could implement to address inequality.
The six-month inquiry engaged 13 senators – five from the ALP, five from the Liberal Party, two Greens and one independent. The 273-page report, tabled in December 2014, drew on 64 written submissions and seven public hearings involving 59 witnesses from government and voluntary agencies around the nation.
The report makes it clear the non-government representatives reached consensus on the key findings. The government members, led by Zed Seselja, were uncomfortable with the conclusions. They tabled a dissenting report.
I was a co-author of a report by the Australia21/Australia Institute, Advance Australia Fair? What to do about growing inequality in Australia. This was released in mid-2014. I met the committee as a witness and spoke about the origins of the report in a roundtable of experts at Parliament House in January 2014.
Arising from that rich discussion we proposed ten ways to move to a fairer Australia. These included promoting a national conversation about inequality, its effects and ways of dealing with it.
The committee’s majority report states that income inequality has increased in Australia since the mid-1980s. It asserts that the budget measures will be likely to exacerbate income inequality and poverty. The report emphasises that the Newstart payment is too low – for a single adult recipient it is more than A$100 per week below the poverty line.
The report points to the important role of the minimum wage and the fact that lower incomes are associated with poorer health outcomes. In addition, low transfer payments or low incomes often compound the disadvantage felt by groups such as Aboriginal and Torres Strait Islander peoples, people with disability, people living with mental illness, single parents and new migrants.
It also argues the need to consider how the income-support system can assist the large and growing group of people with insecure work. The report notes that regional variations in labour markets can seriously limit people’s employment opportunities.
It goes on to underline the importance of Commonwealth rent assistance and of long waiting lists to enter public and social housing. According to the report, a decent wage is the best way to lift people out of household stress.
Finally, the report discusses the importance of a one-on-one approach for reconnecting people with education, training and employment opportunities. It argues the need to invest in programs that connect with young people at risk of leaving school early, that develop tailored training for workers aged 50 and above and that provide long-term unemployed people with mentors.
The report makes 13 recommendations to act on these key findings.
The government senators’ dissenting report affirms that Australia is a prosperous egalitarian society, which provides security and opportunity for all. It argues that while Australia has some significant issues with poverty and much can be done to improve opportunity and circumstances for all Australians, the majority report adds little to the debate. It says history has shown that a strong economy that provides employment is the best way to build a prosperous society.
The dissenting senators say arbitrary comparisons between relative income levels pale in significance compared to Australia’s capacity to grow wealth and lift people out of poverty through employment and education. The majority report fails to make the case that inequality is driving poor socioeconomic outcomes, they say, and does not meaningfully engage with budget policies to improve these outcomes.
The five-page dissenting report has a single recommendation:
That the Senate implements the government agenda to build a strong and prosperous economy for the benefit of all Australians.
That this is the government members’ response to inequality in Australia shows why the public needs to join the debate.
Robert Douglas is Emeritus Professor, National Centre for Epidemiology and Population Health at ANU. This article first appeared in The Conversation on 13 January 2015.
Beyond the tourist fantasy of the Louvre and the Eiffel Tower, France today is a fabulously colourful mixture of Christians, Muslims, Jews, Buddhists, Hindus, atheists. This is the situation all over Europe. Yet many Europeans are deeply uneasy with this diversity.
The names of Charlie Hebdo victims reveal the diversity hidden by the Je suis Charlie hashtag: cartoonists and writers Charb, Cabu, Wolinski; psychoanalyst Elsa Cayat; proofreader Mustapha Ourrad; policemen Franck Brinsolaro and Ahmed Merabet; two students killed in a kosher supermarket, Yoav Hattab and Yohan Cohen.
Yet media and government often still refer to Muslims as “them”: tolerated foreigners, immigrants graciously accorded rights by the state. And Muslims often respond by considering themselves unwanted outsiders, even enemies.
Until the Second World War, many believed that Jews could not be French. That lie was at the heart of the Dreyfus Affair that tore the country in two. Under the Nazi occupation, millions of Jews were arrested across Europe and sent to their deaths. Since the 1980s, France has come to terms with the ugly truth about its role in those deportations. When it comes to Islam, however, many Europeans still suffer from historical amnesia.
Most French people forget that Algeria was part of France for 130 years. They are unaware that the current Republic was born out of the bitter struggle over Algerian independence. France’s colonial domination extended through Asia, Africa, the Caribbean and the Pacific, but its heart was in the Muslim lands. Algeria became an integral territory of France after the Revolution of 1848.
In that year French men were the first to gain universal suffrage. Muslims, however, were excluded from voting for almost a century. Only after 1945 could Muslim men vote, along with French women. It took another 13 years for Muslim women to gain that basic right.
The Fourth Republic collapsed in 1958, when settlers fighting to keep Algeria French carried out a wave of terrorist attacks across France, culminating in an attempted coup d’état. Wartime leader Charles de Gaulle was hurriedly recalled and given emergency powers.
Against violent settler opposition, de Gaulle signed Algeria’s independence in 1962. A million European settlers, along with hundreds of thousands of Algerians, crossed the Mediterranean to France. French companies kept their lucrative interests in petroleum and mining. The two countries remained indissolubly linked.
Yet after decolonisation, most French citizens simply erased the colonies like a bad dream. Algerians could not do the same. In the 1990s, things turned nasty after the secular, French-backed regime in Algiers annulled elections won by an Islamist party. A bloody civil war broke out, killing more than 100,000 people. For Algerians in France, this horror left trauma, distrust and anger.
In 1995, the violence hit France when a bomb in the Paris subway left eight people dead. The atrocity ramped up French support for the authoritarian Algerian regime’s “war on terror”.
At home, the Muslim headscarf was increasingly targeted as a dangerous symbol of defiance against French secularism. The authorities banned the hijab in public schools, and made face covering in public illegal. Women wearing facial veils could be arrested in the street, forced to undergo searches, or pay fines. Rather than promoting secular freedoms, these laws fanned extremism, and pushed Muslims further to the margins.
A position once associated with the far-right, denouncing the loss of “French identity”, has now moved into the centre, where even elements of the former Left have joined it. The French values trumpeted by this republican fundamentalism are abstractions that have little connection to the reality of French society. Freedom of speech is one of these.
Right-wingers and libertarians alike enthusiastically applauded Charlie Hebdo’s bravery for publishing cartoons offensive to Muslims. Yet it is not clear what they were actually meant to achieve. To insist on abstract principle over negotiation, respect and compromise is what we usually think of as fanaticism.
Leaders of the fascist-leaning Front National (FN), eager to profit from the potential backlash, now mourn a magazine that consistently reviled them. Je suis Charlie, agreed former leader Jean-Marie Le Pen – adding that he meant Charles Martel, who expelled Muslims from France in the Middle Ages.
The attackers, French citizens of Algerian descent, also saw things in black and white. Their Islamist beliefs were built on a violent rejection of difference, a refusal to tolerate disagreement, dissent and compromise. This virulent religious nationalism is a mirror of movements like FN that rely on fear of Islam to build their constituency.
But all is not lost. Asked what he was thinking during the minute of silence for the victims, one man said he was staring at the words on the column before him. Liberty, Equality, Fraternity.
These are not French values. They belong to everyone. They are not easy, nor are they unstained by violence. Heads on pikes, the guillotine, wars, revolutions: it took a century of struggle for French people to agree on these words. They were almost lost in the brutality of colonial oppression, in the dark years of the German occupation and the anti-Semitism that some French people – including, sadly, many Muslims—perpetuate even today.
We must confront the past in its richness and its ugliness. France has never been the postcard fantasy of cheese and baguettes. There have always been Muslims, Jews and Christians in France. As one Muslim wrote during the French Revolution:
No matter where I first drew breath, or the religion in which I was born, we are brothers.
Many Muslims feel the same today.
Of liberty, equality and fraternity, the last is the biggest challenge. It is not just an idea but a way of life with deep roots in the French tradition. It is equally familiar in Islam. Fraternity is more than solidarity. It asks us to engage in the difficult project of living together, not as “us” and “them”, not in black and white, but in celebration of the vibrant colour that is Europe today.
Ian Coller is senior lecturer in History at Latrobe University. This article first appeared in The Conversation on 13 January 2015.
You might be interested in part 2 of these articles on the Nordics.
In my earlier postcard from Denmark, I described the Nordic success.
I didn’t mention that they are rated the happiest people in the world, have the lowest rates of corruption and are on track to achieve their target of 50% renewable energy by 2020. Copenhagen is a very liveable city.
But why have Denmark and other Nordics, Finland, Sweden and Norway been so successful?
Obviously a small country like Denmark with less than six million people has advantages in terms of social cohesion. A small population makes for stronger personal and community ties, and national unity. But a smaller population does not have the advantages of scale although with higher value added production this is probably less of a problem than in earlier years.
Amongst their other features, the Vikings were great traders. That tradition continues today with Danes actively pursuing overseas markets. The people are well equipped to do so. In my admittedly brief stay in Copenhagen I did not find any local who was not reasonably fluent in English. It contrasts sharply with our failures in developing Asian languages to equip us in our region.
In the 1970s and early 1980’s Denmark came to the conclusion that it’s remarkably high taxes and high welfare was not sustainable. Changes needed to be made, but in the process they did not shred everything from the old model. The country continues to have high taxes and provides very generous welfare. This reflects the close linking of national identity and social responsibility which is central to Denmark’s welfare model.
On discovering that the old social democratic consensus was no longer working, Denmark let some of it go with remarkably little fuss and introduced new ideas from across the political spectrum. They were determined to push through reforms. There was a hard-headedness and pragmatism about it.
This pragmatism explains why the new consensus so quickly replaced the old one. Few social democratic politicians now want to dismantle the conservative reforms put in place in recent years. Denmark has seen an amalgam of left and right wing policies that are broadly agreed across the community. Winners don’t take all in Denmark. Compromise is essential. A left wing coalition led by Social Democrats and Social Liberals was returned to power in 2011.
An underlying factor in the successful changes in recent years has been strong trust in government. The Danes do not see the state as a dead hand. They see government as enabling opportunity, promoting individual autonomy and social mobility. They trust their government and politicians to a remarkable degree. What a contrast it is to Australia.
This Danish trust in institutions is quite remarkable. A survey by the European Commission in November 2012 found that 53% of Danes had public trust in institutions. In Europe it was only 32%. By comparison in Australia, Essential Media reports that our ‘trust in institutions’ ranges from above 50% for the High Court, the ABC and the Reserve Bank but down to 20% or lower for trade unions, business groups and political parties. We have a long way to go to catch up to the Danes and other Nordics in trust in public institutions. We badly need to renew our public institutions that have been badly damaged. Just think of the deliberately created chaos in our last Parliament.
Trust in government has been a feature in Denmark for centuries. That results in high quality people joining the public service. Citizens and companies pay their high taxes without a great deal of complaint, and play by the rules. Government decisions are widely accepted and few go to the courts to settle disputes.
This trust in institutions is reflected in the fact that Danes expect their public leaders to keep their word. In his History of Denmark, Professor Knud J.V.Jespersen puts it this way.
‘The fundamental attitude of modern Danes is that the state is a friend and ally, not adversary, a protector and not an enemy. This is very much an unconscious result of the fact that for generations, the Danes have been accustomed to a state of law fashioned by the Danish Law to express… the relationship between the individual, society as a whole and the state. … The code stated that any promise intended to create obligations of a legal nature should be considered as binding irrespective of the form of the promise and whether it related to commerce or any other contractual circumstance. Even a verbal promise to give a present or to sell a property was considered as binding as if it had been in writing. … It is still true in Denmark that a man is a man, his word is his word, and should anyone in public life in modern Denmark fail to deliver on his word or promise, the public will judge him accordingly….
The most recent and spectacular example of this was when the previous Prime Minister, Poul Nyrup Rasmussen made a public promise in the run-up to the 1998 elections not to tamper with the rules for early retirement. When he did so anyway, after forming a government, he was embroiled in a crisis of confidence from which he never recovered. He lost the next election in 2001, not so much because he had chipped away at the system of early retirement benefits, which most people anyway thought was a sensible thing to do, but because he had breached a fundamental principle of Danish Law, the binding contract, which dates back to the Fifth Book of the Danish Law.’
As part of this trust in government Danes insist on honesty and transparency. They insist on rigorous scrutiny with access to almost all official records.
In the economic sphere, they let the economy rip but underpin that very liberal approach with support and retraining for those who are unemployed. The labour market is very flexible. Universal and free education encourages all students, regardless of social background, to achieve their potential. In taxation, husbands and wives are treated separately and on equal footing. Universal day-care for children makes it possible for both parents to work full time. This Danish emphasis on building human capital is not only a key to greater equity but major economic benefits.
That commitment to human capital development is dramatically shown in its support for skilling in architecture, design and film.
The Danes have clung to a strong public funder in health and have refused to go down the path of subsidised, costly and inequitable private health insurance
The Danes have clearly shown the benefits of getting a few important things right. They are pragmatic enough to make major changes when necessary. We could learn something from that in Australia at the present time.
At its core, the Danes have trust in institutions and government in particular. They see the government as a positive influence. Freeloading by any group or person is not tolerated. Governments in turn must earn that trust. Trust is perhaps a little fuzzy and hard to define. But we instinctively know it is essential in both private and public life.
The greatest damage to public trust in my lifetime was the dismissal of the Whitlam Government in 1975.Our Governor General and High Court Justices deceived the Prime Minister and damaged our public institutions. We have not recovered from that appalling episode. Our ‘betters’ who extol the importance of institutions and the value of conventions, trust and tradition were the very people who caused such damage.
We could learn from the Danes about good governance and trust, and the importance of developing human capital. They are the keys to their success.
You might interested in this repost of part 6 on the economic role of government.
The economic role of government
In addition to key principles the second immediate issue is the economic role of government. Those who would benefit from weak and distrusted government have deliberately undermined the legitimacy of the public sector.
We are often told that there is really no difference between the major parties. In some respects that is unfortunately true but I suggest there is a major and continuing difference. And that difference is over the role of government. The Labor Party has always rejected the view set out in the Liberal Platform ‘that only businesses and individuals are the creators of wealth and employment’
Australians have been encouraged to forget that their prosperity is based on both public and private goods. To many people government has become ‘invisible’, except as a vehicle for distributive welfare. Australians have lost sight of the contribution of the mixed economy, not only in providing public goods, but also in ensuring that the forces of greed and short-sightedness don’t lead to economic and social collapse. It is noteworthy that despite the continued denigration of government and the public sector, the three most trusted institutions in Australia are public institutions – the High Court, the ABC and the Reserve Bank. In the survey by Essential Research there was not a private group in the top eight most trusted groups and institutions in Australia. The three least trusted groups were business, trade unions and political parties.
Even conservatives acknowledge that only the public sector can provide some services such as national defence and management of the money supply. In addition, however there are economic functions where private funding or provision is possible but only at high economic cost, with distorted incentives and with serious consequences for equity. These include education, health insurance, energy and water utilities and communication and transport infrastructure. In these and other areas there are market failures for which prudent economic principles require a strong government role in funding or provision. Unless Labor articulates and defends the proper economic role of government – a pre-requisite to improving Australia’s weak taxation base – economic growth will be restrained by inadequate public spending and investment.
Of these investments, the most important is human capital to ensure that people can develop their capabilities so that they can contribute to their full potential through employment, business or unpaid work. In the competitive global economy of this century, human capital is a nation’s only secure asset. Scandinavian countries demonstrate this. A population with skills and with incentives which match rewards to contribution will draw less on distributive welfare, preserving public revenue for needed social insurance and public goods. The best antidote to disadvantage and low self-esteem is not welfare but well paid and meaningful employment.
Labor will find it hard to make these investments if it allows itself to be depicted as the party of big welfare spending. In fact conservative governments, because of under-investment in human capital and physical infrastructure, and neglect of economic adjustment, have spent strongly on distributive welfare to compensate for inequalities rising from a weakened economic structure. Over the last 50 years, social security assistance has risen from 5% of Australians’ household disposable income to 12%. Examples of this expanded social security assistance are baby-bonuses, family allowances and superannuation concessions for the wealthy. Governments are moving to wind back some middle class welfare, but the justification is more about immediate budgetary management rather than an expression of principles. Rather, Labor should be the party which ensures that Australia becomes less reliant on distributive welfare. Instead of referring to ‘the education revolution’ in isolation, it should present its human capital policies in the context of a unified set of principles in infrastructure, education, health, environmental protection, underpinned by principles of investing in capabilities, nurturing individual freedom and autonomy and supporting social inclusion.
There is an opportunity to differentiate Labor from what has emerged as continuity between Howard and Abbott in that both are strong on distributive welfare while ready to sacrifice other aspects of government which would strengthen the economy’s capacity to provide well-paid and productive employment with less need for social transfers.
A reframing of policy in terms of strengthening the economy in order to reduce the need for distributive welfare would not only neutralise the ‘right’s’ attack on Labor as the party of the welfare state but would also give a unifying theme to many policies. It would link policies in industry adjustment, infrastructure, education, health and social inclusion. It would overcome the false framing of a trade-off between equity and efficiency. It would give Labor parliamentarians an opportunity to engage more openly with the public without the need for spin and carefully prepared texts.
In the last 5 blogs I have argued that Labor should be explicit about the principles that drive policies and programs. Those key principles were
Fairness
Freedom
Citizenship
Stewardship and
Ethical responsibility
In addition to these principles Labor should stand for democratic renewal, including of itself and the key role of government in a strong economy and society.
The Asylum Seekers Centre is presenting an art exhibition – ‘Seeking Humanity’ – by renowned Australian artist, Wendy Sharpe. It opens in Ultimo, Sydney, on 17 February, for four weeks, before moving to Canberra on 20 March, and then Penrith.
It is not about politics, but puts a human face to those who have fled situations of great danger in their home country in search of safety and freedom in Australia. The video has been very successful, with over 500 people viewing it within the first 24 hours.
A previous Archibald winner and 2014 finalist, Wendy has drawn portraits of 39 asylum seekers and refugees. Through her art, she shares their lives with us to show that underneath all the troubles and politics around the issue, we are all the same. That we all have the same hopes and dreams.
More info – http://asylumseekerscentre.org.au/seeking-humanity
For holiday reading, you may be interested in this repost.
I have been interested for many years in the economic and social success of the Nordic countries, Sweden, Denmark, Finland and Norway. Together they have a population of about 26 million.
But what triggered my recent interest and decision to visit Denmark was the sheer pleasure of watching several Danish TV series –Borgen, The Killing, The Bridge. They are the best TV series that I have seen in years and far superior to the tosh that we often get from the US and sometimes from the UK. The Danish film industry receives government finance, but more importantly the Danes have invested heavily in human capital and the talent shows in these TV series. Portrayal of a country’s cultural life is important for the country to understand itself better. But in the case of Danish films, I have found them attractive enough to come and visit Copenhagen and spend some tourist dollars. Although I should say that Copenhagen is expensive.
In 2012, the World Economic Forum and several related agencies ranked the four Nordic countries the best performing in the world. The ratings covered global competitiveness, ease of doing business, global innovation, corruption perception, human development and prosperity. Whilst the Nordics ranked 1 to 4 in the world, Australia ranked number 12.
Last year The Economist, a conservative magazine, published a special survey of ‘The next supermodel’. The Nordics were the supermodel. It said ‘If you had to be reborn anywhere in the world as a person with average talents and income, you would want to be a Viking. The Nordics cluster at the top of league tables of everything from economic competitiveness to social health to happiness. They have avoided both southern Europe’s economic sclerosis and America’s extreme inequality. Development theorists have taken to calling successful modernisation “getting to Denmark”.’
It added ‘The Nordics also offer something for the progressive Left by proving that it is possible to combine competitive capitalism with a large state; they employ 30% of their workforce in the public sector compared with an OECD average of 15%. They are stout free-traders who resist the temptation to intervene even to protect iconic companies. Sweden let Saab go bankrupt and Volvo is now owned by China’s Geely. But they also focus on the long-term – most obviously through Norway’s ($US884billion) sovereign wealth fund and they look for ways to temper capitalism’s harsher effects. Denmark, for instance, has a system of “flexicurity” that makes it easier for employers to sack people, but provides support and training for the unemployed. Finland organises venture capital networks.’
The Nordics have traditionally had high taxes and high welfare spending along with strong economic growth and low unemployment. But the global financial crisis and membership of the European Union has forced readjustment and reform to reduce taxes and welfare spending.
These changes are broadly supported by all the major parties. But the sales tax on new cars is still 180%. There are also heavy fuel and parking charges. This shows up in Copenhagen where it is one of the few major cities in the world not being strangled by cars. On the road you have to watch out for bicycles as much as cars. The 25% VAT includes food and restaurants.
Taxes generally are amongst the highest in the world but the community seems broadly to accept them because it is confident that the government will spend the tax money for worthwhile purposes and with equity.
In Denmark there are two or three strong parties and four or five other significant parties. No party has won an outright majority since 1901. No single party has formed a government alone since 1982. With multi parties, negotiation and compromise is essential. The record shows that new governments maintain the thrust of previous government policies although making changes around the edges.
Capitalism is given a fairly free hand and there is acceptance that firms will go bust. But the Danes and others go all out to protect the most valuable resource, their human capital. People who lose their jobs through structural change are given good income support and meaningful retraining.
The Danes have excellent schools and government funded and free health care. They root out corruption and rent seekers. If only we would do the same! Denmark has one of the most liberal labor markets in Europe with a very high rate of social mobility. In information technology and the internet they are ahead of most. 79% of eligible men work and 72% of eligible women work. Child care is readily available. The Danish gross government debt as a proportion of GDP is well below the US and Europe.
In Denmark there is a strong tradition of different classes getting along with each other which is not surprising with such a small population (5 million) and a strong neighbour like Germany to the south.
The absolutist monarchy took serious note of the French Revolution and decided that their survival depended on not resisting democracy and living modestly. Politicians think that it is smarter to be seen riding a bike to work rather than using a government limousine.
The Nordic model is still work in progress with many changes necessary with I suspect more means testing. But they have probably reached the future ahead of others and are grappling with problems that others will face in the years ahead.
The major stain on public life in Denmark, as it is with so many other countries in Europe, and even in far-away Australia, is the xenophobic attacks against refugees and migrants by political conservatives. Only last weekend in neighbouring Sweden the anti-immigration party, Sweden Democratic, polled 13% of the vote.
In my next postcard from Denmark, I will try to describe why the Nordics and Denmark in particular have been so successful, despite high taxes, generous social services and more recently, significant increases in refugees at least compared with the size of their populations.
Obviously organisation is easier in countries with small populations, but I suspect that the most important reason for Denmark’s success is good government. The Danish people see government not as a dead hand or the purveyor of red tape, but very largely an enabler of opportunity and freedom.
You might be interested in this repost . It was part 1 of a six part series. Part 6 will be reposted tomorrow. John Menadue
Labor’s constituency
The Labor primary vote has declined from about 45-50% fifty years ago to 35-40% today. Labor has lost its clear identity with the ‘working class’ and what it stands for. Its natural constituency and membership has declined. To contain the loss, Labor has increasingly committed itself to focus groups, marginal seat strategies and ‘whatever it takes’. Values, principles and ideas have given way to marketing of products .Money has replaced membership as the driving force of campaigns. The trade unions remain the most important institutional Labor supporter. The unions have a proud record but their influence is out of proportion to their role in the community and the ‘Labor constituency’.
Principles as the basis for policy
If Labor is to differentiate itself from conservative parties, it needs to express that difference in a clear set of principles which accord with the best of Australians’ values. Otherwise the political contest is reduced to satisfying short-term materialist ‘aspirations’, appeasing vested interests and managing the media cycle. In such a contest, Labor is engaged in a futile struggle, for the Coalition is adept at conveying the misleading impression that it is the ‘natural party of government’, particularly because of its supposed competence in economic management. Joe Hockey’s performance as Treasurer shows that this supposed competence is a myth but conservative commentators still persist with the myth.
From community values a set of principles of public policy can be developed – principles which define Labor in contrast to other parties. Those principles can underpin a coherent set of policies and programs which implement those policies.
Values > principles > policies > programs.
Moving to the ‘right’ on issues such as refugee policy and health care simply legitimises the conservative position – a position from where exploitation of people’s fear is likely to drive out sensible and reasonable political debate. Selectively compromising – a little socialism here, a little free market there – as was the strategy of Britain’s New Labour – only confuses Labor supporters and the electorate because it presents inconsistent values.
Social democrat parties, including Labor, were founded on an optimistic view of human nature and on recognition of the public sphere where people realise their full capabilities. These ideas can be expressed in consistent and coherent principles such as stewardship, the common wealth, including enhancement of social, environmental and institutional capital and protection of natural resources.
In his emphasis on the ‘social question’, John Curtin gave effect to these principles, acknowledging that only a strong society, including a strong and respected government, can support a strong economy. And of course there is no point in an economy that does not serve social ends.
Curtin’s social democratic vision contrasts sharply with the Liberal Party platform ‘that only businesses and individuals are the creators of wealth and employment’, a view that reduces government to a burden rather than a contributor to the common wealth. Curtin’s vision contrasts with the notion that ‘a rising tide lifts all boats’, which legitimises destructive social divisions, which encourages people to separate themselves from society in physical or metaphorical gated communities (private schools, private health insurance), which allows the connection between contribution and reward to be severed, which encourages rent-seeking, speculation and protection of privilege rather than productive investment and which compensates the ‘losers’ with social security handouts.
Just as Labor governments provided leadership to face great challenges in the 1980s, so too today Australia faces even greater challenges – climate change, population ageing, dilapidated infrastructure, commodity based exports, deficits in human capital and a weak base for public revenue. The politics of ‘what’s in it for me’ discourages us from facing these challenges, for there will have to be trade-offs: some will have to pay more than others and some will have to forego benefits now for the sake of longer term benefits. Such transitions can be painful, but are more likely to gain support when people understand the principles underpinning public policy.
When the Labor Party is unified around a set of principles it can still have a robust debate about how to give effect to those principles. But it would be in control of its message because its parliamentary representatives can engage with the electorate in a consistent and sincere voice, with less reliance on ‘talking points’ and spin and with less concern with the immediate reaction of focus groups. Labor supporters would be much more prepared to accept political compromise if they know that there is strong leadership and there is broad agreement on key values and principles. Labor leadership has to be patient and consistent around these values and principles – and never go backwards. Authenticity and sincerity are then easily recognised.
You might be interested in this repost.
A strong primary health care system based on general practise is the key to a sustainable health service. Unfortunately the government is doing its best to weaken general practice.
Primary care offers the best prospect of improved quality of care and increased efficiency, particularly through new work practices. The evidence is worldwide that primary care provides
Primary care reform is the single most important strategy for improving our health and making the health system sustainable This is true for all countries, developed and undeveloped..
Community level prevention and primary care is essential to restoring universality and efficiency in Australian healthcare. Further, health services should be delivered at the most local level possible – the principle of subsidiarity. The dignity of patients is best safe guarded by treating patients in their homes or as close to their homes as possible.
Hospitals should be the last resort. They are very expensive. A visit to a hospital emergency department costs ten times the cost of a visit to a GP. Too often politicians, the hospital lobby and the media keep telling us that hospitals and hospital beds are the top priority. They are not.
We need to improve general practice rather than weaken it as the government is doing. At the same time we need to review the way doctors are remunerated. Fee-for-service puts up costs and discourages integrated care. The government should consider two possible changes. The first is that the MBS schedule be amended to permit private practices to remunerate a supervising general practitioner in their practices. That supervising GP would be remunerated for over-sighting the treatment and referral of patients and their records. The second is that the government should offer to negotiate contracts with practices, both corporate and non-corporate, that will commit to the delivery of integrated care. I expect that the government would be agreeably surprised at the number of GP practices that would respond because of their concern about the ‘turnstile’ nature of a lot of general practice in Australia today. Doctors should be remunerated for keeping patients healthy rather than remunerating them when their patients are sick. What a perverse incentive we have in FFS!
A related key to a sustainable heath system is health workforce reform, particularly in primary care. We have tens of thousands of health professionals whose skills are underutilised or undeveloped – nurses, allied health, pharmacists and ambulance officers. About 10% of normal births in Australia are managed by midwives. In NZ it is over 90%. We have about 400 nurse practitioners when we should have thousands. The medical colleges have disproportionate influence in controlling access to the professions. Medical training is strongly focused on acute care in hospitals, whereas most of the work of future doctors will be with chronically ill patients in the community. Few are trained to work in team practices. Primary care is not seen as an attractive option for young doctors. Only 13% of final year students have any interest in working in primary care, and only 13% would consider working in rural areas. General practice must be made more attractive and better paid compared with specialist care, but not via fee-for-service.
Our health sector is wracked by nineteenth century work practices. It is the largest part of the Australian workforce. It is the fastest growing. We are regularly told that we need to improve the productivity of the Australian workforce. But the largest part of the Australian workforce in the health sector is not mentioned. We have seen the dramatic benefits in productivity improvements through workforce reform in many areas. But those gains are small beer compared with the potential gains with health workforce reform, leveraged by such means as wider access to MBS and making all Commonwealth health funding conditional on substantial workforce reform.
We need substantially improved health work practices to improve the efficiency of our health sector and to lower health costs. It is also necessary to expand the professional opportunism for tens of thousands of health care workers.
But workforce reform is hard because the AMA is determined to protect the territory of doctors in the name of quality and safety in health care.
The key to a sustainable health system is in primary care and general practise associated with workforce reform. But the government is undermining general practise and talks endlessly about the need for workforce reform but is not game to tackle the vested interests in the health sector.
You may be interested in this repost. John Menadue
Be careful what you wish for.
With the Victorian election result the Labor Party may be hoping to see the demise of Tony Abbott in the New Year. But it should be careful what it hopes for.
Gough Whitlam successfully crippled Billy Snedden as the leader of the Liberal Party in 1974 and got Malcolm Fraser in his place, a much more substantial leader.
Paul Keating pulled the rug from under Alexander Downer and got John Howard instead. We know that John Howard proved to be a much more formidable opponent than Alexander Downer.
What if Tony Abbott was deposed or stood aside and a new leader, after a brief honeymoon, went to an early election?
What is not clear at this stage is when Rupert Murdoch will tap Tony Abbott on the shoulder and tell him that he is no longer marketable and that a new leader would be easier to sell!
Sitting behind the serious problems of the Liberal Party is a nagging concern, what does the Labor Party stand for?
In my blog of 3 January, I discussed our love affair with cars and how cars are crippling our cities.
In the SMH on January 12 this year, Jacob Saulwick takes up the issue of our failure to face up to the futility and cost of building more roads. See link below to the article. John Menadue.
http://www.smh.com.au/
In this article, Paul McGeough in the SMH says ‘Yes, it is utterly inappropriate to go round shooting those who cause offence, but is it appropriate to go round causing offence?’ Paul McGeough also recalled that when Charlie Hebdo republished the controversial Danish cartoons of the prophet Muhammad in 2006, then French President Jacques Chirac issued a swift rebuke. ‘Anything that can hurt the convictions of someone else, in particular religious convictions, should be avoided – freedom of expression should be exercised in a spirit of responsibility’. John Menadue
I have reposted below my blog of September 1 last year about the developing pattern of mission-creep in Iraq. Now, four months later, we are seeing it happening again. Last week in Iraq Tony Abbott made it clear that Australia was receptive to any further requests to send more Australian military to Iraq.
Tony Abbott, with John Howard, have both been part of our disastrous intervention in Iraq. We now intend to continue and expand it.
War is a serious business, but Tony Abbott doesn’t seem to think so, given how easily he makes one military commitment after another. Last week he was pictured admiring the vinyl decal stickers on the side of an RAAF fighter denoting each Iraq bombing mission. What a thoughtless, provocative piece of stupidity to have decals on our fighter in the first place, let alone having the Australian Prime Minister looking on approvingly.
The mission creep continues and how obviously our Prime Minister seems to be enjoying it.
In an excellent article in the SMH [31.8.2014], Paul McGeough writes of our still being at the beck and call of the US and the mission creep already evident as we rejoin the war in Iraq.
Have we forgotten Vietnam and all the other disastrous wars that we have got involved in at the request of the US? Invariably they started with humanitarian aid, then advisers, then logistics support and all the way from there to full-scale military involvement in causes we didn’t understand – except that the US was an ally and we had to be loyal. In Vietnam we lost with disastrous consequences for ourselves, but mainly for the Vietnamese people. In Vietnam and later in Iraq and Afghanistan our role steadily expanded. We are already seeing this mission creep again today in northern Iraq.
We are now committed again to Iraq whilst refusing debate in our parliament. We were told by the Minister for Defence that ‘Were we to delay making decisions as the events confront us, people’s lives will be seriously at risk.’ This is an echo of the false reasoning we have been given in the past. Just forget that our ill-advised decision to join the war in Iraq was based on flawed information and costs hundreds of thousands of Iraqi lives. That foreign intervention in Iraq sowed the seeds of the disaster we are now seeing in that country. For centuries foreign interests have failed dismally in trying to control events in Iraq and Afghanistan. Don’t we ever learn?
Our latest commitment to help the people of Iraq began as humanitarian air-drops. Now we are to provide arms to a break-away province in the north of Iraq. In that province there are strong elements of the Kurdistan Workers’ Party which is a proscribed terrorist organisation. How will we ensure that the arms we are supplying will not finish in the hands of the PKK?
The mission creep has occurred quickly. It has now moved from humanitarian and military supplies to include our Special Air Services to protect air drops of food and deliveries of weapons. It won’t be long before the SAS is asked to extend its role.
But what are our ‘friends’ doing to combat the Iraqi State? There is speculation at the moment rather than clear information that IS is receiving support from some of our friends.
IS is also drawing on local resources. It looted the Central Bank in Mosul of $US429 million. The Iraqi Army that we had helped train fled and left their uniforms and weapons behind. IS has access to oil wells in Syria and Northern Iraq. In the same way as the mafia it extorts taxes from businesses and individuals.
Surely we should be told more about what is involved in our recent rejoining of the war and what we are attempting to do, and how we will avoid the mistakes of the past. Surely the Australian Parliament should be the primary forum for this debate. With Simon Crean as Leader of the Opposition the ALP opposed our joining the US invasion of Iraq in 2003. That same leadership is sadly lacking today.
In terms of our own security, we will now be less safe. The head of ASIO has told us.
Robert Fisk of The Independent traces the Charlie Hebdo massacre back to the French occupation and disaster in Algeria. See link to this article below.
The tide is turning on climate change. It is going out on Tony Abbott and Rupert Murdoch. They will never admit it but the efforts of the Rudd and Gillard Governments will be vindicated.
It is time for the ALP to really go onto its front foot on climate change. In recent months they have been extraordinarily quiet. It is not good enough to rely on the failures of the Abbott Government. The ALP needs to develop and prosecute its own policies.
People in South Australia must be extremely worried about recent bushfires and now predicted heavy rainfalls. But we are hearing little from the ALP about climate change. The Opposition’s Shadow Minister for The Environment, Climate Change and Water, Mark Butler, comes from South Australia.
The evidence on the dangers of climate change is mounting almost daily. Australians are feeling and sensing that weather patterns are changing significantly. The climate change deniers, like Tony Abbott, Alan Jones, Maurice Newman, Dick Warburton and Rupert Murdoch, will surely find that their denial has been unwise and damaging to our national interest.
Tony Abbott tells us that one of his great political successes has been the abolition of the carbon tax. His opposition to the tax was one of his ‘signature policies’. Increasingly we are coming to see that he has misled us. The carbon tax and the associated emissions trading scheme were necessary and good policies.
The evidence on climate change is mounting month after month after month.
Last week the Australian Bureau of Meteorology told us (see link here) http://www.bom.gov.au/climate/current/annual/aus/
Despite Tony Abbott and Rupert Murdoch and the deniers, public opinion is shifting. In a survey released in 2014 the Lowy Institute showed the first increase in public concern over climate change in six years. Almost two thirds of respondents said the government should be giving leadership on climate change.
The international climate change conference in Peru late last year showed an increasing willingness by countries to take action on climate change.
Despite attempts by Tony Abbott to sideline climate change at the G20 meeting in Brisbane, the presidents of the US and China signed a major agreement to combat climate change.
In the fifth report of the Intergovernmental Panel on Climate Change, the world’s most eminent climate scientists overwhelmingly agreed that climate change is a serious and developing problem.
Pope Francis will weigh in in a few months’ time with the first ever Vatican teaching on climate change.
But here, the Australian Government is rolling out its pay the polluter Direct Action Plan and trying to wind back the renewal energy target.
Agriculture Minister Barnaby Joyce in October last year outlined his plans on competitiveness in agriculture and how farmers needed to adapt to climate variability. But there was no mention of climate change. This is quite remarkable as there is probably no group in Australia that is likely to be more affected by climate change than Australian farmers. But tagging along behind the Liberal Party for the sake of a few ministerial posts, the National Party is failing to provide effective leadership for rural Australia.
The tide is turning on climate change.
Is it time to declare Abenomics, the recession-busting strategy of Japanese Prime Minister Shinzo Abe, a failure? If so, was the recent Japanese election purely an exercise for Shinzo Abe to protect himself and the ruling coalition from a half-awake electorate before the deluge?
Launched with much fanfare in 2012, Abenomics promised to cure deflation, revive economic growth, break down structural rigidities in the economy, unlock the talents of women in the workplace and salvage the nation’s deficit-drowned budget. In two years, it has achieved none of these objectives; nor, arguably, has it brought any of them within reach.
Deflation:
After briefly ticking up to around 2% per annum––the central bank’s target––Japan’s core inflation rate has declined again to 0.7%, with some major retailers reporting a further drop in turnover during the recent end-of-year sales. One of the paradoxes of the current situation is that, despite historically loose monetary policy, money in circulation is tight. Japanese households, once famous for their high savings ratio (20%+), are now forced to dip into their savings (i.e. the nation’s domestic savings ratio has turned negative) just to keep their heads above water.
Growth:
Recent GDP data revealed Japan had fallen back into recession. Domestic demand remained a drag, as was––more surprisingly––private investment. The economy has contracted in six of the past 11 quarters for which official data are available. Manufacturers have lowered their expectations, according to the latest Tankan survey, the most authoritative indicator of future trends. If the GDP figure comes in positive for the final quarter of 2014, as some predict, it will be because a weaker yen has helped to boost external demand. However, with European economies going backwards, Chinese growth abating and the U.S. recovery maturing, an export-led recovery hardly seems feasible.
Structural Rigidities:
Structural change is harder to achieve in any economy and must be considered a medium to long-term objective. The problem is that the Abe Government has not clearly articulated what Japan’s future economy should look like. Though it has declared a willingness to join the Trans-Pacific Partnership––the regulatory and investment treaty being promoted by the United States––negotiations between Tokyo and Washington have been painfully slow. Interest groups hostile to the TPP, from the medical to the agricultural sectors, are doing their best to hold up a deal. Free trade agreements with China and South Korea remain a long way off, partly because of soured political relations.
Lately, Abe has put more emphasis on corporate tax reform. One of the ruling coalition’s first actions after being re-elected was to approve a cut in the corporate tax rate by 2.5 percentage points to 32.1%, effective from this April. Another cut to 31.3% is due to follow a year later. The government also delayed the next scheduled consumption tax increase and unveiled a slew of other tax changes and incentives, although nothing radically new was announced. Whether these measures can stimulate demand remains doubtful, given that less than a third of Japanese corporations, according to Reuters, are actually paying tax (the rest are either unprofitable or making use of credits from earlier losses).
Women:
Abe says he wants more women to stay in the workforce (60% quit work when they have their first child) and be given opportunities to advance (female representation on company boards is just 1%). But he is up against a competing lobby among his conservative allies who want greater action to stem Japan’s falling birthrate. Some progress has been made––for instance, an expansion of childcare places––but there is a deep-seated cultural bias in the workplace against full female participation. Long hours of overtime remain the norm in companies, big and small. Studies have shown that the overtime ‘phenomenon’ has less to do with lifting productivity than with maintaining male-dominated corporate hierarchies. Anecdotally there is little evidence of change.
Deficit:
Government debt in Japan, equivalent to more than two years of gross domestic product, has continued to climb under the Abe administration. The fiscal 2015 budget is likely to add about 38 trillion yen (A$380 billion) to the debt. Few observers now believe the government can meet its target of balancing the primary budget (excluding debt serving commitments) by 2020. Fiscal hawks, however, are fighting a rear-guard action, and social security spending is being screwed down, further widening the gap between the ‘haves’ and ‘have-nots’ in society. With fiscal expansion apparently no longer an option, there is a growing tension within Abenomics between expansionary and contractionary policy settings.
Upside:
The most important, and unexpected, wind-shift in favour of Japan, in recent months, has been the collapse in the prices of oil and other natural resources. The depreciation of the yen, engineered by the central bank to help revive corporate profits and support employment, had led to a sharp increase in the prices of finished imported goods and in the input costs of businesses. Energy imports swelled Japan’s large trade deficit, especially after the Fukushima nuclear disaster, but significant relief can be expected in 2015.
Wages:
For some observers, the key to the success or failure of Abenomics is wages growth. Professor Hiroshi Yoshikawa of Tokyo University is one prominent economist who has argued that reversing falling wage-rates, and not monetary easing (the primary focus of Abenomics Mark I), is the way to break the deflationary spiral. Abe’s own economic advisers have derided Yoshikawa’s thesis, but it seems the more pragmatic Abe is starting to pay attention to the professor. At their annual end-of-year soiree, Japanese captains of industry were exhorted by the prime minister to use higher profits to pay higher wages this year. While pressure from the top will probably have some effect, big companies may hand out larger bonuses (which can be adjusted downwards again later) rather than increase base pay-rates.
The year ahead:
Having just returned from a fortnight in Japan, my impression is that conditions have not fundamentally improved. It is easy to gain a false impression, if you are a tourist who only visits the corridor between Tokyo’s Ginza and Shibuya districts, where glitzy retail outlets always seem to have well-heeled customers. But go to the outer suburbs of the capital or to provincial towns and you will find evidence of continuing economic stress: shuttered commercial streets, miserably low casual wage-rates, depopulation, and decaying infrastructure.
Even in the trendier parts of Tokyo, businesses are struggling to attract customers. One anecdote will suffice. I took lunch at a new restaurant in Aobadai that, judging from the smart décor and linen service, could be expected to leave me $50-$75 out of pocket for my meal, if it were in Sydney or Melbourne. I selected a course that included soup, bread, salad, pasta, dessert and coffee. The food was beautifully prepared, delicious, and in generous proportions. It cost me $11. How the restaurant could pay its rent, wages and materials costs, and still make a profit, was a complete mystery.
Japan seems to be surviving on a mysterious, mathematics-defying, leap of faith. Perhaps what we are witnessing will, in time, bear out the old adage ‘it is always darkest before the dawn’. Though I would never underestimate the capacity of the Japanese to reinvent themselves, it is hard to escape the conclusion that something just doesn’t add up.
Journalist and author Walter Hamilton reported from Japan for eleven years for the ABC.