Australia’s response to the COVID-19 pandemic has been remarkably successful. After an exponential increase that peaked at more than 400 cases a day in late March, daily cases declined to almost zero a month later. (more…)
Telehealth is not new in Australia but Covid -19 and the new Medicare item numbers have stimulated its rapid adoption across the country. It is clear patients like it. They do not need to expose themselves to potentially dangerous environments such as hospitals and clinics. It saves them time whether in rural or urban environments and it delivers care – and patient education, in their own environment. (more…)
The public-private divide in Australia’s health system disappeared early in the Coronavirus pandemic when all states signed contracts with private hospitals to ensure private beds were available to meet the anticipated tsunami of hospital demand. The same ‘can do’ approach is now urgently required to respond to the second COVID-19 curve, namely the predicted increase in mental ill-health, self-harm, and suicide. (more…)
I am both a daily reader of, and a contributor to John Menadue’s Pearls & Irritations. (more…)
Part of Australia’s response to the coronavirus pandemic was a severe reduction in elective surgery, and so private hospitals have stood almost empty for a month now. (more…)
The growth in COVID-19 cases in Australia appears to have slowed across all states, through a combination of tighter border control and spatial distancing.
Two zombie policies stalk the Private Health Insurance (PHI) policy world: A ‘Hospital Benefits Schedule’ and ‘Medicare Select’. Here’s why both should have been put to rest long ago. (more…)
Australians are dissatisfied with private health insurance. Premiums are rising and consumers are dropping their cover, especially younger people, who are less likely to need health services. Those who are left are more likely to use services, driving insurance costs up further. Government subsidies for private health insurance and private medical care – currently running at more than $9 billion every year – and financial penalties to encourage people to take out private insurance are becoming less effective. The industry fears a death spiral. (more…)
The A$1.25 billion Community Health and Hospitals Program Prime Minister Scott Morrison announced this week should be awarded a big policy fail. (more…)
JENNIFER DOGGETT. Keeping people well and out of hospital should be a primary focus of our health system. Yet the evidence is that we could do much better in preventing and managing problems in the community, before they require hospital treatment.
In the post below, Professor Stephen Duckett, Health Program Director at the Grattan Institute, provides some useful advice to state/territory governments on how to focus own hospital avoidance without losing funding under the current ‘activity-based’ system. (more…)
Our dental care system is not working for a lot of Victorians. More than half a million Victorians say that the cost of dental care stopped them from getting care when they needed it in the past 12 months. (more…)
Every day we hear stories about innovation in health care – new drugs, new machines and new tests that will help us live longer. We have got used to thinking that any improvements in health care will come at a price – often a big one, given the years of development and testing needed to bring the innovation to market. (more…)
Indigenous Australians suffer racism when they seek or require medical treatment. The good news is that the medical profession acknowledges there is a problem. The bad news is that doctors are not doing nearly enough to bust the systemic bias against our First Peoples. (more…)
The government has totally squibbed the latest pharmacy regulation review, and consumers will be the losers.
Every five to 10 years in Australia, the government establishes a review of the regulations governing pharmacies. Those reviews invariably come to the same conclusion: community pharmacy is over-regulated, and a reduction in regulation would benefit consumers. Just as invariably, the government response is to do nothing. (more…)
One in every nine patients who go into hospital in Australia suffers a complication: when something preventable goes wrong with their care. They might develop an infection from a hygiene breach, for instance, or be given the wrong dose or type of drug. (more…)
The debate in the Victorian Parliament about assisted dying has tended to focus on the terrible personal experiences of deaths of family members. That focus is understandable, but it has been at the cost of consideration of the need for much more attention to the need for better palliative care. (more…)
Australians pay too much when they go to medical specialists. The government can and should do more to drive prices down. A current Senate Inquiry on out-of-pocket costs will hopefully lead to some policy action. (more…)
The Labor Party has released a summary of the proceedings of its ‘National Health Policy Summit’, held in Canberra on 3rd March. Good on the ALP for holding the summit. Trouble is, the ‘communique’, while summarising the views of the quite diverse range of participants, gives no clear indication of where Labor might be heading. (more…)
The evidence is that currently there are significant harms and costs associated with the consumption of sugary drinks, both to those who are obese and the community more generally.
In the coming weeks I will be posting articles on the high costs and corporate nature of pathology in Australian. The following article by Stephen Duckett in The Conversation, even though posted in February this year, helps set the scene. John Menadue
The Mid-Year Economic and Fiscal Outlook (MYEFO) set the cat among the pathology pigeons late last year. One of the government’s flagged changes, estimated to save around A$100 million a year, was to abolish the bulk-billing incentive Labor introduced in 2009. (more…)
The Mid-Year Economic and Fiscal Outlook (MYEFO) set the cat among the pathology pigeons late last year. One of the government’s flagged changes, estimated to save around A$100 million a year, was to abolish the bulk-billing incentive Labor introduced in 2009.
The industry mobilised, threatening to charge consumers significant out-of-pocket co-payments for pathology tests for blood, tissue and other bodily fluids. The threatened increases were well in excess of the A$1.40 to A$3.40 cut to the bulk-billing incentive, which companies received for not charging patients out-of-pocket charges.
A campaign was organised, focusing on the increased cost of pap smears. It included apetition supported by more than 200,000 people.
Health Minister Sussan Ley escalated her rhetoric, pointing out that Medicare was notdesigned to be a guaranteed bankable revenue for corporations, nor a taxpayer-funded payment to cross-subsidise pathology companies for other costs of doing business.
The minister noted:
… complaints from stock exchange-listed pathology companies about this MYEFO decision have revolved around impacts on ‘shareholders’ – not patients – exposing what is really motivating these criticisms.
The MYEFO-induced furore about bulk billing provides context for a wider “root and branch” review of pathology payments. As the Grattan Institute’s report, Blood Money, published today, shows, there is money to be saved in pathology. This can be done in ways that don’t affect patient access to needed tests.
The Blood Money report addresses several questions. First, why is bulk billing on the agenda for pathology tests at all? All out-of-hospital pathology tests should be bulk-billed.
There should be no “incentive” for pathology corporations to bulk-bill. Rather, bulk-billing should be a requirement to participate in this market.
The place of co-payments in health care is highly contested. Those who argue for co-payments say they help to reduce demand, particularly for frivolous use of health care.
But consumers almost never initiate pathology services. Professionals order tests to assist them to make a diagnosis or to track a patient’s condition. In those circumstances, there is no theoretical argument to use financial disincentives for consumers, in the form of co-payments, to limit demand.
Industry consolidation and technological advances have completely reshaped the pathology industry over recent decades. But the way governments pay for pathology services hasn’t kept up.
Fee-for-service was originally a way for individual consumers to pay their medical practitioner for professional services. Health insurance then evolved to provide insurance for those costs. Medicare, when it was introduced, followed the same model.
But what was suitable for cottage-industry medical practice is not necessarily appropriate as a payment system for big corporations. More than three in every four Medicare-billed pathology tests are analysed by one of two big corporations: Sonic Healthcare and Primary Health Care. Both companies suffered a share price drop when the MYEFO cuts were announced.
Many parts of the pathology schedule are now highly automated. The large corporations benefit from economies of scale as the costs of an additional test to run through an analyser are trivial. But Medicare pays the same for the tests processed by the machine for the thousandth patient as it does for the first.
A 2011 discussion paper on pathology funding proposed that Medicare negotiate with providers to share the benefits of technological change by discounting the schedule for high volumes by, say, 5%. The Commonwealth Department of Health should dust off this paper and use it as a basis for proper commercial negotiations with the big pathology corporations.
The bulk-billing incentives should be in the mix as well. Serious negotiations of that kind would save taxpayers about A$175 million per year; A$100 million from bulk-billing incentives, the balance from a 5% trim.
The government should also consider going to tender for the right to bill Medicare for out-of-hospital pathology. In other words, companies would bid to be involved in the out-of-hospital pathology market by offering to provide tests at particular prices.
The tender specification might incorporate provisions that the price to be paid by government goes down after a particular number of tests is performed.
A pilot scheme of tendering should be established in Victoria for 2017, with the scheme allowing for multiple successful winning bids to ensure continued competition in the pathology marketplace. Tenders could be rolled out in other states after an evaluation of the Victorian experience.
Tendering should generate greater savings than the 5% trim.
Tendering introduces price competition into the pathology market. Rather than companies responding to a government-regulated price, they would have to specify the prices at which they think they can operate. If a company bids at too high a price, they may not be among the group of successful tenderers.
The 2011 pathology discussion paper notes strong savings from other departments tendering pathology services:
Neither paid the equivalent of a bulk-billing incentive. Further savings, on top of a negotiated trim, could therefore be achievable.
There are savings to be made in pathology payments and they should come from narrowing the margins of profitable corporations, not from cutting services to the ill and vulnerable.
In a time of increasing deficits, the government must prioritise reforms that reduce spending without compromising the health of Australians. Pathology payment reform provides an opportunity to do this – an opportunity that should not be missed.
Stephen Duckett is Director of the Grattan Institute‘s Health Program.
This article was originally published on The Conversation. Read the original article.
We start 2016 as we started 2015 – with big challenges for the health system and uncertainty as to how governments will meet them.
The health care headaches in 2016 are, in fact, the same ones we faced a decade ago, albeit different in severity and symptoms. They include population growth, ageing and the rise of chronic disease; inequality in access to care and health outcomes; technological change (the good, the bad and the expensive) and the seemingly inexorable rise in health costs.
Circling for landing are three major reviews on private health insurance, primary care, and low-value care. Their recommendations, and the government’s response to them, are very much up in the air.
Adding to the uncertainty is the broader review of federalism and its consequences for public hospital funding, along with speculation around the 2016 federal election date and what each party’s Santa sack of election promises might contain.
The number of people with private health insurance continues to creep up but the market is not in good shape.
The rebate is one of the fastest growing areas of government health expenditure and complaints about the product abound. High levels of coverage are being achieved throughcarrots (the rebate) and sticks (penalties for the uninsured) rather than genuine consumer appeal.
One solution being floated is for the whole subsidy framework to be thrown out. Instead of subsidising private insurers, which pay private hospitals, the government could subsidise private hospitals directly.
Government advisers are impressed by the efficiency gains that activity-based funding (paying hospitals per procedure rather than a lump sum) brought to public hospitals and believe similar improvement can be brought to the private sector.
The mechanism to achieve this could be a Hospital Benefits Schedule which, like the Medicare Benefits Schedule, would prescribe a schedule fee for private hospital care, based on existing Commonwealth payments for public hospital services under activity-based funding. The same schedule may later be used for public hospitals, replacing grants to the states.
However, it will only be politically palatable if it is cost neutral for consumers or comes with reduced private health insurance sticks.
The devil is in the detail of a new policy such as this. Will payment be to the hospital or surgeon? Will it cover the surgeon’s fee, as in public hospitals? Will it cover diagnostics? Without this information it is impossible to forecast the impact of the shift.
This will be a challenging year for public hospitals. Major reductions in Commonwealth funding for hospital admissions – which continue to grow – will kick in from 2017, and states are likely to start the belt-tightening early.
The cuts far exceed the productivity gains that can be made, so a reduction in services is certainly possible. Efficiency may be improved somewhat by the ongoing expansion of activity-based funding to mental health and “sub-acute” care such as rehabilitation and palliative care.
The possible changes to private health insurance and a Hospital Benefits Schedule may be one way to put money from the federal government back into the system, but there is no sign that Treasurer Scott Morrison is keen to loosen the purse strings.
Hospitals will also be under pressure to lift quality. Hospitals face increasingly stringent “quality standards” with tougher monitoring covering a broader scope of issues, including access and timeliness.
Meanwhile, the increasing array of publicly available data is putting variation in hospital performance under the spotlight more and more, with commensurate calls for greater accountability.
Two independent reviews of Medicare are expected to land sometime in 2016.
The first examines primary care. It could address any number of challenges, including chronic disease management, “six-minute medicine”, co-payments, frozen rebates, and the growing corporatisation of general practice.
Management of chronic diseases such as diabetes, heart disease and cancer poses the main challenge. The rise of chronic disease is imposing big costs on a system that wasn’t designed to provide the complex, continuous and coordinated care now needed.
The government will have to consider far-reaching reform with only limited and equivocal evidence to draw on. Options on the table include a shift in the balance of payments to practices, with less emphasis on payment for attendances (fee-for-service) and more emphasis on payment for care over the episode of illness or year (capitation payments).
There may be other changes in payment structures. The government’s long-standing desire to reduce perceived incentives for six-minute medicine may see a minimum consultation time imposed on the standard (level B) fee.
If sense prevails we won’t see a resurrection of the GP co-payment policy zombie. We should, however, see an end to the freeze on medical rebates; the only question being when and with what trade-offs.
A further issue to be addressed is the shift toward practices owned by corporate chains that profit from referrals to and provision of diagnostic services, such as blood tests and X-rays. The implications of changed ownership structures for practice are not at the forefront of practice payment redesign but should be.
The second review looks at quality and cost-effectiveness of items on the Medicare schedule. The review got off to a rocky start with wild claims about 30% waste in the system, and release of its first list of items targeted for delisting in the sleepy period between Christmas and New Year.
The work on modernising the schedule will come to fruition in 2016. There will be individual and group losers in this process who undoubtedly will scream loudly with varying levels of effectiveness.
It isn’t yet clear whether Health Minister Sussan Ley’s appetite for reviews portends massive reform to the sector, or simply a politically judicious preference for treading water in a portfolio still reeling from tumultuous management by her predecessor. However, the auguries are good for the former.
The scene for change has been set, at least with the medical profession. Respectable leaders are engaged and leading some of the review processes. Hopefully this will be the year the health system rises to meet the big challenges of 21st-century health care.
Director, Health Program, Grattan Institute. This article first appeared in The Conversation on February 1, 2016.
Time for policy rethink as frequent GP attenders account for 41% of costs.
The Commonwealth government’s big idea for primary health care in the past year was to charge everyone who visits the GP a A$7 co-payment. The idea had many problems – it could have led to a blowout in emergency department demand; it was inequitable; and itmay not have worked anyway. It has finally been abandoned.
The failed policy betrayed a simplistic belief that all patients are basically the same. The government thought all patients should make a co-payment and all would respond to it in the same way. Eventually, the government decided to exempt some people, but even then, patients were only divided into two categories.
A new report from the National Health Performance Authority, released today, shows that all patients are not equal. It divides GP users into six groups:
The very high attender group comprises just 3.8% of the population but consumed 17.7% of Medicare out-of-hospital expenditure (see the graph below).
On average, each of these very high GP attenders accounted for A$3,202 of non-hospital Medicare expenditure in 2012-13, compared to an Australian average of A$690.
By grouping together the very high and frequent attenders, we see that 12.5% of the population were responsible for 41% of Medicare out-of-hospital expenditure.
Frequent and very high users account for 41% of the costs
As well as being responsible for a large share of total costs, people who visit the GP more often are more likely to live in the most disadvantaged areas, and to report being in poor health.
A conventional measure of quality is care continuity – that a patient sees the same doctor regularly rather than shopping around. Very high GP-attenders saw an average of 4.8 GPs in 2012-13. More than one-third of them (36%) saw five or more GPs.
Seeing so many different GPs can lead to duplicated tests and treatments, which might help to explain why the frequent GP visitors got so many tests and referrals to specialists. On average, referrals to specialists, x-rays and pathology tests by these people were almost 50% higher than their spending on GPs. Frequent GP visitors spent A$906 on GPs per head, and A$1356 on other services.
The National Health Performance Authority report clearly shows why one-size-fits-all thinking in health care policy development isn’t good enough.
People who see the GP most often tend to have more health problems than low-attenders and a greater level of disadvantage. But the original A$7 co-payment policy applied the same set of incentives to both groups. The A$5 rebate reduction was barely more nuanced.
The next generation of health policies should respond to complexity and diversity, not pretend it doesn’t exist. Does the system work for all kinds of patients? Which patients are getting costly care that doesn’t benefit them? By asking these questions, we can uncover how to improve the quality of care while also saving money.
People who see the GP every two weeks probably need better co-ordination of their care. They might also need a different team of health care workers helping them.
For many frequent GP visitors, the traditional model of paying doctors a fixed fee per visit isprobably wrong. Instead, part of a GP’s payment should be for helping a patient draw on the right mix of appropriate, effective and efficient care. That might include support to manage their own care better, getting regular advice from a pharmacist or nurse at short notice, maybe online, and seeing the GP less often.
Differentiating among types of patients can lead to better policy. So can distinguishing among types of providers.
Previous Grattan Institute work has found that some hospitals have extreme, unjustified costs. Despite this, little is done to rein in these costs – hospitals that run a deficit are often treated much the same as those that manage their costs well. The funding and management of hospitals remains fairly one-size-fits all, despite huge variations in efficiency.
Our upcoming work will show that different hospitals also vary widely in whether or not they provide ineffective treatments. Once again, we can do a lot more to distinguish the best hospitals from those that have serious problems and to manage them differently.
The National Health Performance Authority report is a reminder that we have more information than ever about patients, just as we do about providers and treatments. We should make the most of it by looking at how these patients, providers and treatments differ and what that means for policy.
Stephen Duckett is Director, Health Program at Grattan Institute.
This article appeared in today’s The Conversation.