Pearls and Irritations

Lesley Russell

  • LESLEY RUSSELL . How knee replacement surgery highlights issues of access, affordability and best practice in Australia’s two-tiered healthcare system – Part 2

    Part 2 – Best practice and improved surgery outcomes

    As the population ages, total knee replacement surgery is becoming commonplace.  It is one of the most expensive surgical procedures. Most replacements are performed as elective surgery in private hospitals. Those patients who must rely on the public system are waiting longer than ever.  

    In Part 1 of this paper, the variations in frequency of knee replacement were considered. Given that most such procedures are cnducted in the private sector, the dependence on private health insurance creates disparities in access. Little information is available on preferred prostheses.

    Part 2 considers patient satisfaction with knee surgery, access to rehabilitation after surgery and the broader consequences of knee surgery for national productivity. (more…)

  • LESLEY RUSSELL. How knee replacement surgery highlights issues of access, affordability and best practice in Australia’s two-tiered healthcare system – Part 1

     PART 1 – Access and affordability

    As the population ages, total knee replacement surgery is becoming commonplace.  It is one of the most expensive surgical procedures. Most replacements are performed as elective surgery in private hospitals. Those patients who must rely on the public system are waiting longer than ever.  

    (more…)

  • Private Health Insurance: focus on premiums ignores the cost of using it

    Last week’s announcement from the Turnbull Government purported to be about making private health insurance “simpler and more affordable” but in fact delivered more for health insurance funds’ bottom lines than for Australians’ budgets and highlighted the contorted, confused and controversial logic that underpins the government’s push requiring taxpayers to contribute to the financing of both tiers of a two-tiered healthcare system. (more…)

  • LESLEY RUSSELL. Private Health Insurance – a low-value proposition?

    Private health insurance has been allowed to undermine the universality Australian healthcare to the extent that international experts now downgrade the Australian system in comparison to those of similar countries because it is two-tiered. Growing public concerns about increasing premiums, unexpected out-of-pocket costs and inequalities have led to a focus on whether health insurance provides value for money. The focus should be widened to investigate the extent to which private health insurance supports low-value and low-quality healthcare services. (more…)

  • LESLEY RUSSELL. The impact of private health insurance on equity and access in specialist healthcare

    Most specialists charge fairly and reasonably, but there is clearly a need to name and shame those who are over-charging and over-servicing to ensure a level playing field for the good guys – and to protect, respect and care for their patients.
    (more…)

  • It is disingenuous of the Coalition to claim it has no intention of privatising Medicare.

    The election campaign battle over Medicare should come as no surprise. It echoes disputes during previous campaigns and have their origins in ideological divides that date back to well before Medicare was founded and have persisted through the subsequent political disputes. Labor sees the health of Australians as a matter of sufficient national importance that it requires government intervention; the Coalition sees it more as a matter of personal responsibility and individual choice.

     

    The compromises struck in order to enact Medicare have meant that Australia’s healthcare has been a blend of public and private systems, with precise relationships, both competitive and cooperative, never fully delineated. The pendulum has swung in favour of one or the other aspect – public or private – depending on who is in government and the financial pressures of the times.

    Political and voter reactions to these swings are compounded by the efforts of key stakeholders to protect their own interests. Organised medicine, most obviously the Australian Medical Association, has been a powerful and disruptive player in healthcare politics, driven primarily by the fear that governments of both political persuasions will interfere in their conditions of work and pricing power.

    The AMA has a love–hate relationship with Medicare and a tradition of opposing key health reforms, good and bad, from both political parties. Their price for agreeing to the introduction of the Pharmaceutical Benefits Scheme in the 1940s, extracted from then opposition leader Robert Menzies, was a referendum to change the constitution to prohibit any form of “civil conscription,” thus effectively making a socialised system like Britain’s National Health Service impossible and shaping the role of private providers in the delivery of Medicare services.

    Together these issues highlight why Medicare is so vulnerable to claims of privatisation and why these claims have validity. It is disingenuous of the Coalition to claim it has no intention of privatising Medicare when this option has clearly been considered; and it’s important to remember that the Coalition has said nothing that would preclude private initiatives from competing alongside Medicare. History shows that while ideologies may be temporarily cast aside for political gain, they are never abandoned.

    The fight to introduce Medicare was bitter and protracted. During 1973 the Coalition twice blocked the enabling legislation for Labor’s first version, Medibank, in the Senate, and it did so again after the election in 1974. This forced a joint sitting of the parliament in August 1974, which finally passed the bill by ninety-five to ninety-two votes. Notwithstanding its election commitment to keep Medibank, Malcolm Fraser’s Coalition government, which came to power in November 1975, dismantled the program in all but name.

    Labor returned to office in 1983, having pledged to reinstate “the basic principle of the right of all Australians to health services according to their needs.” The following year, under prime minister Bob Hawke, the government reintroduced the original model, now called Medicare. For all of the following twelve years in opposition, the Coalition remained strongly opposed to Medicare. As opposition leader, John Howard spoke out often and vehemently. He declared Medicare a “disaster” and a “nightmare” and promised that under his government “bulk billing under Medicare would go, except for those classified as disadvantaged and there would be the option of belonging either to Medicare or to a private health fund.”

    It was only in his push to win the 1996 election that Howard realised he needed to reassure the electorate about the future of Medicare and bulk-billing. He conceded that his commitment to retain Medicare was based on a pragmatic view of voters’ priorities rather than on his party’s political convictions or a change in the system itself: “It’s not a question of whether it’s become better. It is a question of us believing that Medicare is seen by the overwhelming majority of the Australian community as an important part of the social security infrastructure.”

    This commitment was undermined by his government’s push, using a series of financial carrots and sticks, to bolster the uptake of private health insurance, and by its erosion of bulk-billing rates. An effective Labor campaign around bulk-billing and rising out-of-pocket costs saw an interesting set of responses from the Howard government. In 2003, it introduced a $900 million policy package, A Fairer Medicare, which was highly criticised by all stakeholders. A parliamentary inquiryreportdescribed the package as “a decisive step away from the principle of universality that has underpinned Medicare since its inception.” Its enabling legislation was blocked in the Senate.

    With the 2004 election looming, the government, with Tony Abbott as health minister, announced a compromise policy package called Medicare Plus (soon to become Medicare Plus Plus, after Abbott negotiated a deal with Senate independents to ensure its passage). The new arrangements included higher reimbursements for doctors who bulk-billed and an Extended Medicare Safety Net aimed at addressing out-of-pocket costs. As bulk-billing rates climbed and safety-net payments burgeoned, Abbott declared the government “Medicare’s greatest friend.”

    These Howard–Abbott policies were enacted in support of political ideology (in the case of the private health insurance rebate) and out of a pragmatic need to address voters’ demands (in the case of Medicare changes). There was little evidence to support the changes, and their financial imposts and impact on equity remain as serious problems for the healthcare system.

    The Extended Medicare Safety Net tied the amount of Medicare benefit to the doctor’s fee rather than the Medicare reimbursement; with no government control over specialists’ fees, the safety net was predictably arecipe for fee inflation. Not surprisingly, that means the vast bulk of the benefits find their way to high-income electorates. Costs have burgeoned despite parameter adjustments by both Coalition and Labor governments.

    In the 2014–15 Budget, the Abbott government revealed plans to “simplify” Medicare safety net arrangements. The enacting legislation was rejected by the Senate in 2015, though, over concernsabout the impact on chronically ill Australians and the reductions in outlays ($267 million over the forward estimates). Health minister Sussan Leypromisedfurther consultation but there is no evidence these have occurred.

    The private health insurance rebate is one of the most contentious issues in health policy. The 2016–17 budget papers show that it currently costs $6.5 billion annually, and both the rebate and the cost of health insurance premiums are allowed to grow at rates well beyond those deemed acceptable for Medicare and the Pharmaceutical Benefits Scheme.

    It’s an anomaly – some would say an outrageous one – that “private” health cover is so heavily subsidised by the public purse. Despite this, less than half (47 per cent) of Australians have private hospital cover. There is no evidencethat the private health insurance rebate is achieving its policy intent, and it has been a significant factor in driving up costs.

    Economist Saul Eslake says the rebate should be scrapped. “Subsidising people to do something they would do anyway is a waste of taxpayers’ money,” he wrote earlier this year. “The rebate reduces the discipline on health insurance funds to keep their premiums under control. And it’s a form of middle-class welfare that the country can no longer afford.” Figures from the Parliamentary Budget Office show that ditching the rebate could save the federal government as much as $10 billion over the next four years.

    Yet, despite all the evidence and the criticisms from a wide range of health experts, Tony Abbott was right when he said that “private health insurance is in our DNA.” This is certainly true for the Coalition, but successive governments of both persuasions have failed to convincingly articulate why Australians need what is increasingly a duplicate health care system – with duplicate costs for many – and why the federal financial contribution to private health insurance should be so substantial.

    Since coming to office in 2013, the Coalition has undermined public confidence in a public, universal healthcare system with talk about budget unsustainability and the overuse of Medicare services. A surreptitious shiftfrom public to private is occurring via increased co-payments, the abolition of bulk-billing incentives, the freezing of Medicare fees to doctors, and other measures. Out-of-pocket costs are the fastest rising part of the healthcare budget.

    Expert advice requested by the government has more overtly supported privatising Medicare. The 2014 National Commission of Audit raised the possibility of requiring higher-income earners to take out private health insurance for basic health services in place of Medicare. Like the Harper Competition Policy Review, it also advocated an expanded role and less regulation for the private health insurance sector. Responding to the Harper review in November 2015, the government committed to commissioning aProductivity Commission review of how competition principles can be applied to the human services sector.

    The government has also signalled its agenda to allow private health insurance to play an expanded role in primary care. Some of the larger funds are already expanding their activities in this sector, but with little regulatory oversight.

    Despite the prime minister’s protestations that moves to outsource the payment systems for Medicare and the PBS do not constitute the privatisation of Medicare, the public is rightly sceptical. It’s surprising that the AMA is not similarly concerned. Semantic games have gone on about what constitutes privatisation and about the differences between Medicare payment systems and Medicare services, as have disputes about whether the findings of advisory groups and calls for expressions of interest can be said to indicate certain actions, and what the new buzz words of “competition” and “contestability” really mean for health care. More forthright statements from the prime minister might actually help his case here.

    The risk is that Australia is headed stealthily but inexorably towards a two-tiered health care system in which those with resources and access can purchase the services they want, regardless of need, and Medicare becomes a ragged safety net for the less well-off. Labor’s scare campaign is biting because enough voters remember where we have been with Medicare policies and can see where we are headed. The Coalition would do well to read the results of a 2008 poll that showed a striking preference for public over private healthcare, with those surveyed clearly favouring an improved public health care system supported by the public purse.

    Lesley Russell is the Adjunct Associate Professor at the Menzies School of Health Policy at the University of Sydney. She has been a senior policy adviser to the Federal Parliamentary Labor Party.

  • Lesley Russell   Too high: the impact of specialists’ fees on patients’ health

    In today’s health care debates around the centrality of primary care, moving towards patient-centred medical homes, improving care coordination for people with chronic illnesses and whether private health insurance provides value for money, there is one element that is almost always missing – the role and the costs of specialist services.

    In 2014 over 28 million specialist services were billed to Medicare and 21 million of these were for out-of-hospital services. Only 30% of these services were bulk billed, and the average out-of-pocket cost for the remaining 70% of services was $70.89. However gaps of several hundred dollars are not uncommon.

    Specialist fees are the main driver of Medicare out-of-pocket costs and the main reason why people access the various Medicare safety nets (Extended Medicare Safety Net, the Original Medicare Safety Net and the Greatest Permissible Gap measure).

    The Government has moved to make changes to the Medicare safety nets in the name of ‘simplification’ and the Health Insurance Amendment (Safety Net) Bill 2015 is currently before the Senate where it has been sent to the Community Affairs Committee for review.

    Reforms to the Medicare safety nets are long overdue. There is considerable evidence that the current arrangements are inequitable, do not benefit those with the greatest need, and continue to be inflationary, despite legislative tweeks. This has led to increasing economic pressures on patients from their out-of-pocket costs with consequences for their health outcomes and quality of life. There are also pressures on hospital budgets from preventable admissions that can result when patients skip specialist appointments and fail to comply with treatment regimes because of cost.

    As federal parliament considers the new safety net legislation, it is crucial to ensure that this does not have the unintended consequences that were inherent in the Extended Medicare Safety Net (EMSN). One such consequence was that the EMSN actually increased the ability of specialists to charge higher fees, particularly in areas such as obstetrics and assisted-reproductive technology services. In 2009 it was estimated that for every dollar the government spent on the safety net, only 57 cents went towards reducing patients’ costs and the remainder went towards increased doctor fees.

    Preventing such problems will require an informed study of the impact of specialist fees and how specialists are likely to respond to efforts to limit reimbursements to patients of fees that are in excess of the Medicare Benefits Schedule (MBS). As it stands there is very little publicly available information in this area. Considerable work was done on a relative value study in the 1990s (regrettably with no outcomes) and the specialist medical colleges presumably have data from their members, but the Department of Health has shown no inclination to analyse their data or to make it available to academic centres for such work.

    Medicare data for the June quarter 2015 show the following:

    • The average bilk billing rate for specialists (for services in and out of hospital) is 30.2% although this varies dramatically by speciality.
    • The average fee observance for out of hospital services is slightly higher at 43.4%.
    • The average patient contribution for services that are provided out of hospital and are not bulk billed is $70.89. This varies considerably by state and territory – it is lowest in South Australia ($53.94) and highest in the Northern Territory ($89.38).

    Over the past decade there have been some interesting changes in these figures that tell a story of policy and community pressures and influences.

    Although the average bulk billing rate for specialist services delivered out of hospital has barely changed, the average out-of-pocket cost has more than doubled (from $32.66 to $70.89). For individual specialties there have been some dramatic changes. For example, the bulk billing rate for obstetrics, currently 51.5%, was only 21.8% in the June quarter of 2005. We can assume that the increase in bulk billing is due to the increases in Medicare reimbursements that were made as part of an effort to tackling the inappropriate use of the ESMN. But the bad news is that those obstetricians who don’t bulk bill have continued to increase their fees and the patient’s average contribution has risen from $51.75 in 2005 to $247.79 today. Moreover, my previous work on Medicare obstetric costs highlights that when loophole is closed, obstetricians look to shift their costs around between capped and uncapped and outpatient and inpatient billing items.

    Specialists who work in radiotherapy and nuclear medicine have also changed their billing behaviours over the past decade. While bulk billing rates have increased impressively from 13.3% in 2005 to 68.5 % in June 2015, presumably in response to government agreements and legislation, average out-of-pocket costs for patients who are not bulk billed have more than doubled, from $16.33 to $38.74.

    It’s important to think what the growing costs to see a specialist mean for patients such as older Australian with multiple chronic illnesses. A recent study shows 27% of older Australian reported having at least three chronic diseases, with high blood pressure, arthritis and cancer as the most prevalent diseases. Such patients may have a very competent bulk-billing GP coordinating their care, but in addition to the cost of specialist consultations there will be costs for diagnostic tests and monitoring, prescription medicines, over-the-counter medicines, and supplies for conditions such as diabetes, colostomies and incontinence.

    National Seniors Australia found that older Australians with five or more chronic conditions spend $3528 per year on out-of-pocket health care costs. Small wonder then that approximately 10% of adults referred to a specialist delay or do not keep their appointment because of cost. This proportion rises to over 12% in the most socioeconomically disadvantaged fifth of the population. The current freeze on Medicare rebates to doctors will only aggravate the growth in gap fees. The gap between what Medicare pays and the AMA-recommended fee for MBS item 104 (initial referral to a specialist) is now $97.72; the new safety net will ignore $40 of this.

    There are no Medicare incentives to encourage specialists to bulk bill. Because poorer Australians can’t afford to pay the gap fees to reach the safety net thresholds, less than 4% of EMSN benefits go to the most socioeconomically disadvantaged 20% of the population while over 50% of benefits go to the most advantaged 20% of Australians. This exemplifies the inverse care law – and poor public policy – as it is the poor who are most likely to suffer ill health, who have the lowest discretionary income, and who are most in need of protection from out-of-pocket costs.

    The government’s “simplification” of safety net arrangements, eliminates the confusion of multiple Medicare safety nets and caps on reimbursement for selected items and ostensibly will make it easier for people to qualify for support if they have high out-of-pocket expenses. But this comes at a cost for patients – the new safety net actually provides patients with less financial protection against high out-of-pocket costs – and a saving for government.

    It is estimated that new threshold levels will mean an additional 60,000 people will qualify each year for the Medicare safety net. The big question is whether the reforms will lead to a change in the type of people who qualify for safety net benefits and that is not easily answered. In testimony to the Senate Community Affairs Committee, Dr Kees Van Gool indicated that the answer depends on how many concession card families experience annual costs between $400 and $638 how many general families have out-of-pocket costs between $1,000 and $2,000 because these are the people who stand to benefit under the new arrangements. However he noted that concession card status is a poor proxy for household income. Capping the amount of out-of-pocket costs that contribute to the safety net threshold will have further implications for how many and what type of families qualify for the new benefits.

    This reform may invoke a number of behavioural changes by both doctors and patients seeking to derive maximum benefits from the safety net. There are clearly greater incentives for patients to seek out doctors who charge less than 150% of the MBS fee and this, in turn, may invoke price competition amongst doctors. Doctors may act to redistribute their fees across an episode of are, as obstetricians have done, or increase the volume of services they offer. The Minister for Health has indicated that she wants to prevent the inappropriate provision of complicated medical services outside of hospitals, although it is not clear how the safety net legislation will address this.

    In an era of budget restraint, what can be done to address the impact of rising specialists’ fees on the federal and individuals’ budgets in ways that do not undermine the business needs of the medical profession? In a paper written earlier this year, Jennifer Doggett and I proposed greater transparency around specialists’ outpatient fees and the out-of-pocket costs to the patient. This approach was also put forward by Dr van Gool in his testimony to the Senate Community Affairs Committee.

    Anecdotal evidence indicates a wide range of fees charged, with some specialists charging dramatically more than the Australian Medical Association recommended fee (which is itself higher than the MBS reimbursement). However there is no evidence that specialists charging the highest fees deliver the best outcomes and patients and referring GPs might make different choices about specialist care if they knew the costs involved. At the very least the major outliers should be named and shamed. It is also important that consumers are provided with comprehensive information about their health care choices and are made aware of options, such as public outpatient clinics, where they can receive specialist services at no (or lower) cost.

    There has been some support for this approach from the medical profession, perhaps driven to action by the fact that a few greedy colleagues are making life difficult for those doctors who bulk bill or have only a small gap fee. In July 2014, the Royal Australasian College of Surgeons spoke out against excessive fees, saying that the College “is highly concerned at the amount of reported out-of-pocket costs being incurred by patients in the health-care sector“ and further stating that the College “believes that extortionate fees, where they are manifestly excessive and bear little if any relationship to utilisation of skills, time or resources, are exploitative and unethical. As such, they are in breach of the College’s Code of Conduct and will be dealt with by the College”.

    An information sheet on the College website strongly supports full disclosure and transparency of fees as early as possible in the patient-doctor relationship, advocates that patients understand all available treatment options, and encourages concerned patients to seek second opinions on recommended treatments and the fees to be charged.

    Just recently, the Urological Society of Australia and New Zealand has been prompted by a study showing that out-of-pocket costs for prostate cancer can be in excess of $30,000 (this includes not just specialists fees but private hospital services, medicines and other costs) to talk to its members about the perils of extortionist fees and of not telling men about public health options for treatment.

    Most importantly, the issue of out-of-pocket costs for patients and the impact these have on health outcomes and costs elsewhere in the health care system and the federal budget needs to be addressed across a range of issues currently under consideration – not just Medicare safety nets, but the Medicare Benefits Schedule review, the mental health and primary care reforms, and welfare supports. Many people will predictably always have trouble meeting their health care costs, and the solutions will not always lie within the purview of the Health portfolio.

    There are branches within the Department of Health that deal with the medical profession, the pharmaceutical industry, and private health insurers; it’s time for a branch with specific responsibilities for consumers’ and patients’ needs. It’s an important part of the effective, efficient and equitable delivery of health care services.

    Dr Lesley Russell is an Adjunct Associate Professor at the Menzies Centre for Health Policy, University of Sydney.

     

     

  • Lesley Russell. The debate we’re yet to have about private health insurance.

    The six previous papers in this series highlight the poorly defined role private health insurance plays in the funding and delivery of Australian health care, and how the Abbott government might allow this role to expand.

    But major changes to Australia’s iconic Medicare system should not happen by stealth. They require full analysis and debate about whether a more integrated public-private system is a feasible option that fits with Australian values and can improve efficiency in health care financing.

    Successive governments of both persuasions have failed to convincingly articulate why Australians need what is increasingly a duplicate health care system – with duplicate costs for many – and why the federal financial contribution to private health insurance should be so substantial. The 2014-15 Budget Papers show the cost of the private health insurance rebate will grow from A$5.997 billion in 2013-14 to A$7.187 billion by 2017-18.

    Private health insurance is variously seen as an essential feature of a “balanced” health care system comprising both publicly and privately funded and provided health care, or as an instrument of patient choice and responsibility that relieves the pressures in increasingly strained public services.

    Most recently, the National Commission of Audit (NOCA) has raised the possibility of requiring higher-income earners to take out private health insurance for basic health services in place of Medicare. Both the NCOA and the Harper Competition Policy Review advocate an expanded role and less regulation for the private health insurance sector.

    These are ideological arguments and much of the dilemma facing those who would work to implement effective policy in this area is the dearth of information about what drives people to purchase health insurance and to use it.

    Since 1999 a raft of government initiatives – financial carrots and sticks – have aimed to encourage more Australians, especially those who are better off, to purchase private health insurance.

    For the most part, these were not evidence-based and consequently have had little or no impact. Only the Lifetime Health Cover Loading and the “run for cover” campaign had an impact and this has been interpreted as a response to a deadline and an advertising blitz, rather than a pure price response.

    University of Adelaide economist Terence Cheng has estimated the price elasticity of demand and found that a 10% increase in premiums would result in a reduction in private health insurance coverage of less than 2%. So most Australians who have private health insurance would retain it even if the rebate was completely dropped.

    The prevailing wisdom is that people purchase private health insurance to have their choice of doctor and hospital facilities, but as researcher Sophie Lewis and her colleagues at the University of Sydney have found, it is really more about shorter wait times for hospital procedures, perceived quality of care and “peace of mind”.

    Having private health insurance provides the ability to “jump the queue” to access a range of elective procedures in private hospitals. But this comes at a price for all patients.

    People with private health insurance are likely getting services ahead of people without insurance but with greater need. The private patient who gets their orthopedic or cataract surgery within weeks rather than months will very often end up with substantial, unexpected out-of-pocket costs.

    Contrary to government claims, the increase in services delivered in private hospitals has done nothing to ease the pressure on public hospitals and in fact waiting times for urgent procedures in public hospitals has increased.

    Private health insurance does not buy extra quality and safety either. The Productivity Commission found that the larger, most comparable public and private hospitals have similar adjusted premature death ratios. And team-based care in large public hospitals means better care coordination.

    The peace of mind that private health insurance is supposed to bring is very often illusionary. Sometimes it’s the realisation that certain procedures or prostheses are not covered; more often it’s the shock of unexpected out-of-pocket costs. More than 20% of private care is paid for by patients’ out-of-pocket costs, which in 2014 averaged A$285 per hospital episode.

    The mix of levies, surcharges and rebates – and funds that constantly change their policies – make it difficult for even astute consumers to judge the true cost and value of their private health insurance.

    In fact, many people know little about the policy they purchase – what it covers, how much it covers, whether it is good value and suited to their needs.

    The Commonwealth government’s decision to subsidise private health insurance means it has a substantial financial stake in the private sector alongside its existing stake in the public sector. However, while there are incentives to encourage the purchase of private health insurance, there is no requirement for it to be used.

    About a quarter of people with private health insurance choose to use the public system. Therefore, a significant proportion of the private health insurance rebate is effectively wasted as people purchase cover for financial rather than health reasons.

    Public policy experts Ian McAuley and John Menadue have made the case that private health insurance is an expensive and clumsy way to do what the tax system and Medicare does better: distribute funds to those who need health care and the effective management of health care costs.

    International evidence shows that private health insurance decreases cost controls and it has been argued that gap insurance has underwritten the dramatic growth in specialist fees. Further, pushing higher income earners (who generally have better health) to take out private health insurance, and then increasingly prejudicing access to services in their favour ensures a widening of existing health disparities.

    In the absence of a clearly stated and managed role for private health insurance – either as competitor or collaborator – it is effectively undermining the power of Medicare as a single payer and the role of Medicare as a universal provider. This situation is predicted to unravel further, as the Abbott government signaled its agenda to allow private health insurance to play an expanded role in primary care.

    Some of larger funds are already expanding their activities in this sector, but with little oversight.

    Last year Medibank Private began a program in Queensland that guarantees Medibank members same day GP appointments, fee-free care, after-hours GP visits and a range of health assessments. Medibank claims the trial is operating within the bounds of the law because it pays only for administrative costs, as opposed to funding the doctors directly.

    The concerns this raises about the generation of a two-tiered health system are further fuelled by the possibility that private health insurance funds were eligible to tender to run the new Primary Health Networks.

    It’s an indictment of the passivity of federal government policymakers that private health insurance funds are more willing to kick start the innovative initiatives that are needed to deliver more proactive preventive care, better care coordination and a greater focus in health outcomes.

    It’s more troubling that these initiatives are currently occurring in a policy vacuum with a narrow focus on solutions led by the funds for the benefit of their members. This will not assist the millions of Australians who don’t have private health insurance and could have a major impact on the equity and efficiency of the health care system and the budget bottom line.

    Lesley Russell is Adjunct Associate Professor, Menzies Centre for Health Policy at University of Sydney. This article first appeared in The Conversation on 2 April 2015.