Category: Health

  • John Dwyer. The structural reform of Medicare rather than its funding is the real challenge.

    Part 1; The model of primary care we need for contemporary Australia.

    For months the federal government has been telling us that a mandatory co-payment for a visit to our GP was essential to afford the $19 billion we currently spend on Medicare each year and projected increases. There would be an added benefit in that the payment would send a price signal to remind Australians that such visits can no longer be free. Too many of us are visiting our doctors too often! Additional revenue would be generated by a seven-dollar co-payment for prescriptions, pathology and imaging. Given the above propositions it is confusing to say the least that our government now plans to put every penny raised by these co-payments into a medical research fund that should eventually be the largest such fund in the world. Perhaps Medicare spending is not so unsustainable after all. International evidence tells us that we should be spending more on Medicare funded services to reduce total health expenditure. How would this work?

    Medicare needs to evolve from a universal insurance entity that pays doctors bills to one that funds clinicians who will provide a specific model of care. An uncapped payment of doctors “fees for service” not tied to any health outcome measures is not a satisfactory way to use taxpayers health dollars. World wide the move is to achieve better health outcomes more cost effectively by focusing on delivering  “Integrated Primary Care” (IPC) available from a person’s “Medical Home”.

    In our doctor centric health system, Australians visit their GP when they have a problem. They do this, on average, seven times a year. Many should go far more often to improve their health and many who need care the most visit their doctor infrequently. The burden associated with chronic and complex and often-incurable disease, compromises the quality of life for too many Australians, dominates the care requirements of many GP practices and cost us all a fortune. Given that so much of this suffering is preventable why is their so little emphasis on prevention and the provision of the health infrastructure to facilitate prevention? Only 2% of the annual $180 billion health spend in Australia involves prevention.

    At the other end of the care spectrum our Primary Care system lacks the infrastructure to care for many in the community and thus avoid the need for hospital care. We have more inpatient “overnight” beds per capita than any other OECD country and yet at the moment we need more. We hear almost daily about access problems for patients stuck in Emergency Departments because there is “no room in the Inn”. What our government does not seem to appreciate is that annually some 600,000 of these admissions (cost $ 30 billion) could be avoided with an effective community intervention in the three weeks before eventual hospital admission. The University of Melbourne studied this matter and found that each year seven million bed days are consumed by avoidable hospital admissions. We spend more than $140 billion on public hospital care each year, seven times more than we spend on Medicare. If we had one level of government funding health care instead of our destructive jurisdictional division of government responsibilities (States for hospitals; Canberra for Primary Care) we would readily spend more on Primary Care models that would reduce the need for so many hospital beds.

    The preferred model of IPC involves establishing a practice (Medical Home) populated my clinical teams, (doctors, nurses, allied health professionals a dentist etc) in which patients enrol with the understanding that they and the team share the responsibility for keeping them well and providing the best possible care when they are ill. The psychology of enrolment is all-important as is the principle that the most suitable members of the team will care for one’s current specific needs. Health maintenance is regarded as an active endeavour. This is evidence-based personalised care. Health literacy and lifestyle analysis, and support for needed changes, might be facilitated by specialised nurses and nutrition experts. Continuity of care improves the chance of early diagnosis and treatment of problems that could become chronic (early signs of adolescent mental health issues for example).

    Team management of chronic conditions with a team based case manager and care for fragile members of the practice in the community by appropriate clinicians to reduce the incidence of hospitalisation are also important initiatives. There is one medical record and rapid access to team members is facilitated by IT connectivity.  Well-established IPC units in other countries have reported up to a 42% reduction in the need for hospital care. Such a model makes best use of the unique skill set different health professionals possess, so different from our current “silo” mentality that makes the integration of an individual’s care so difficult. So successful is this model that already universities around the world are concentrating on moving to inter-professional learning curricula, “Team learning to prepare for team practice”.

    This is “Managed Care”, a term that conjures up in the mind discredited model of care available in the US. There are three players making decisions in much of the US system, the patient, the care team and the patient’s insurer. The latter, famously documented in Michael Moore’s documentary on the issue, all too often interfere with care plans even vetoing them on grounds of affordability. We need to think carefully about the wisdom or otherwise of allowing our private health insurance industry (PHI) to cover members primary care expenses. I would be less worried about interference in care plans here than in the likely creation of a “two tiered” primary care system in which those who can afford PHI would enjoy much better primary care than those who could not. The resulting furtherance in the inequity palpable in our current system would not only be un-Australian but expensive.

    Part 2 of this series will be posted tomorrow. It covers the necessary changes in the health workforce. 

    John Dwyer is the Emeritus Professor of Medicine at UNSW.

     

  • Elizabeth Elliott. Compassion goes missing on Christmas Island

    When it comes to children in need, most Australians feel compassion.

    Most will applaud today’s announcement that ‘Boat Kids’ will be released into the community. However this decision does not go far enough. It includes only kids aged less than 10 years (excluding many vulnerable teens); only those detained on the Australian mainland (excluding kids on Nauru, Manus and Christmas Islands); and only kids who arrived before July 19th 2013. Furthermore, the number to be released includes kids already living in community detention housing.  

    Christmas Island is a remote tropical ‘paradise’ in the Indian Ocean, over 2600 km from Perth or Darwin. When I visited with the Australian Human Rights Commission in July 2014, as part of their Inquiry into Children in Detention, it was ‘home’ to 174 children, including 26 unaccompanied minors – all boys aged between 14 and 17 years.  Australia continues to detain kids, despite the United Nations Guidelines on the Detention of Refugees that ‘Children should not be placed in detention’ and that ‘Minors who are asylum-seekers should not be detained’.

    Compassion, it seems, has gone missing on Christmas Island.

    ‘Home’ for families in these immigration detention centres consists of a small metal cabin, some 3 x 3 metres squared in one of two rows of similar cabins separated by a wooden walkway. Add a bunk bed and a cot to the rooms and there remains little space for a child to learn to crawl or walk, or for exploratory play. According to the father of a 2 year old boy “the housing is dirty, sub-standard, hard to be there. The child keeps hitting his head on items in the room – the bed, the shelf – because of the lack of space.”

    Cramped conditions, a punishing climate and overcrowded living in close proximity to scores of families make for little privacy and dire health consequences. Childhood infections spread quickly. When we were there many children had a respiratory virus and there had been outbreaks of gastroenteritis. We repeatedly heard the refrain “my kids are always sick.”

    The air-conditioned environment exacerbates symptoms in the many children with asthma. Others have medical conditions requiring assessment, medical or surgical treatment on the mainland – and for some the long wait for transfer had been intolerable.  A two and a half year old with no speech, a 6 year old with deafness requiring grommets for glue ear, a child with a facial abscess needing surgical drainage, a boy with an undescended testes, a child with rotten teeth, a girl with sleep apnoea….

    Of greater concern than signs of physical ill-health, however, are the psychological symptoms we heard of from many children.

    They reflect past and ongoing trauma, including the depression and self-harm many have witnessed in their own mothers. Stress in young children was manifest by onset, in detention, of bed-wetting, nightmares and defiant behaviour. In older children we heard of refusal to eat, separation anxiety, regression of speech, development of stutter, mutism and social withdrawal. Some expressed their stress through their art. A 10 year drew his ‘family home in jail’ and a six year old drew herself behind bars, with the caption ‘I want go out’ . Crying was ubiquitous in these images.

    Conversations with teenagers, who could articulate their predicament, were particularly poignant.

    They became distressed, describing flashbacks of trauma experienced at home, during harrowing boat trips to Australia, and during their time on Manus, where some were sent as a result of incorrect age determination. According to one boy who went to Manus, ‘I saw with my own eyes one boy hung himself in a cupboard – they were taken to hospital.’ They talked of their fear of being returned to Manus when they turned 18. 

    All spoke of feelings of hopelessness, sadness and lack of a future. They talked of frequent crying, families missed, lost expectations, lack of education and feelings of guilt because they had not fulfilled their family’s hopes after more than a year in ‘Australia.’  One boy summed this up as ‘a horrible situation. I feel depressed, preoccupied with my misfortune. I have not smiled or laughed the last few months. There is nothing to make me happy or to tell my family to make them happy.’  Some talked of self-harm and some spoke of death. In the words of one 12 year old girl ’My life is really deth. I don’t know why I’m in the jail realy. I don’t kill any body.’

    Detention of children for lengthy periods is in contravention to the UN Convention of the Rights of the Child. This states that ‘The arrest, detention or imprisonment of a child shall be in conformity with the law and used only as a measure of last resort and for the shortest appropriate period of time.’ The UN Human Rights Committee reiterates this: ‘Asylum seekers who unlawfully enter a State party’s territory may only be detained for a brief initial period in order to document their entry, record their claims, and determine their identity.’  Most people have now been detained on Christmas Island for over a year and the anniversary of their arrival came as a bitter blow for many.  One man asked ‘Is it the Australian government’s aim to make us all go mad?’

    As victims of a policy that dictates that any arrival by boat after July 19th 2013 will never be settled in Australia, many have accepted their fate of settlement offshore. But their arbitrary detention without assessment for refugee status has left them in an intolerable limbo. One father said ‘If they won’t have us in Australia, find somewhere else for us to go. We can’t go home.’ A mother expressed her anguish, ‘The criminals, at least they know their sentence – we don’t.’ Many felt guilty for placing their children in such a predicament. As one mother said, ‘Even if I did something wrong, coming here, why ruin the life of our kids?’

    As a reflection of their increasing despair and frustration about the adverse conditions for their children, a group of young mothers with young infants resorted to self-harm.

    When we visited 10 such women – deemed at future risk – were under 24-hour surveillance by guards, not nurses. Despite this mental health crisis the centre has no resident psychiatrist. ‘I swear the physical health is not so much a problem. It is the stress and the psychological impact of the detention that is getting to us,’ said one mother of two.

    It is outrageous to keep asylum seekers in the limbo of uncertainty. It is unacceptable to keep children in detention on Christmas Island, and it is unjust to deny children optimal health care and education.  One mother said ‘one of the most important concerns for my baby is he has not received his BCG vaccine – when everyone in the world should receive it. They say ‘we don’t have it’ or ‘later’ – the story changes.’ In the words of one child, ‘I not want to sit in jail? I want to go school….in here no have school everyday. Please help me?’

    Australians might well ask ‘Where is the compassion on Christmas Island?’

    If we are to retain our international standing as a civilised society, we cannot continue to persecute children seeking asylum as a deterrent to others.

    Elizabeth Elliott AM, is the Professor of Paediatrics and Child Health, Sydney Medical School and Consultant Paediatrician at the Children’s Hospital at Westmead.

     

     

     

     

     

  • John Menadue. Who owns Medibank Private?

     The government has announced that it hopes to raise $4 billion from the sale of Medibank Private. But like many of its budget ‘savings’ it might find that it has to rely in this case  on the High Court rather than the Senate to decide if the $4 billion ‘saving’ can be realised.

    The case has been made by many people that the government is not the owner and certainly not the sole owner of Medibank Private. A view is strongly held that Medibank Private is owned by members/policy holders of Medibank Private. There are 3.8 million members. There is not much doubt that Medibank Private’s equity including accumulated reserves has come overwhelmingly from members’ contributions. At 30 June 2013 issued capital was $85m. Retained earnings were $1.3b. The market value of Medibank Private is estimated to be $4b by the government’s financial advisers.         .

    Medibank Private was first launched in 1976 with operations placed in the hands of the Health Insurance Commission (HIC).

    An examination of Medibank Private’s accounts by The New Daily (George Lekakis) reveals that before 1997

    • In 1988 the Chairman of Medibank Private, Fred Miller, wrote to Health Minister Neal Blewett that ‘Medibank Private is a non-profit organisation based solely on its contributors’ funds. The government has no financial interest in Medibank Private’s assets and reserves. Medibank Private’s assets and resources are the property of its contributors.’ This view by the Chairman was spelt out many times in statements and financial disclosures.
    • Members were officially recognised as ‘equity holders’ in the business from 1993 to 1996.
    • The balance sheets of Medibank Private before 1997 clearly show that the members owned the net assets of the company and not the government.

    The accounting treatment of Medibank Private was changed in 1997 by the Howard Government. This established government control and ownership of the fund.

    • In 1997 the term ‘members’ equity’ was removed from the balance sheet and replaced with a new concept of ‘fund equity’.
    • The Howard Government then directed the Health Insurance Commission to transfer equity of the fund to a new government-owned company known as Medibank Private.

    It would seem that the actions of the Howard Government and later the Rudd Government were designed to extinguish the rights of the members/contributors.

    The Australian Government can acquire the private assets of citizens under Section 51 of the Constitution but the acquisition must be on ‘just terms’. It is arguable that extinguishing completely the rights of contributors – the early ‘equity holders’ – can hardly be said to be on ‘just terms’.

    I must confess that I have a personal interest.  I have been a contributor/’equity-holder’ since 1976. I have contributed tens of thousands of dollars in premiums. Most of it has been a waste of money, but I suppose it gave me something called ‘peace of mind’ but not much more.

    Who owns Medibank Private? The High Court may be called upon to tell us.

     

    In my blog of March 26, 2014 ‘Privatising Medibank Private, who cares’ I argued the all health insurance, whether public or private is parasitical. Warren Buffett described PHI as the tapeworm that is destroying the US health system.

  • Peter Sivey. Health budget: GP care isn’t the problem, costly specialist care is.

    The opening of eight new medical schools in Australia in the past decade has seen a massive increase in the number of new doctors entering the workforce. The number of new junior doctors graduating in Australia doubled between 2004 and 2011. But while fears of an overall shortage of doctors seem assuaged, we don’t have the right mix of doctors.

    A recent trend is the increasing specialisation of the medical workforce. In 1999, 45% of Australian doctors were general practitioners (GPs) but this proportion had fallen to 38% by 2009. Similar trends can be observed in the United States and United Kingdom.

    This trend is concerning because primary care, provided by general practitioners, is the most efficient and equitable type of health care, particularly preventive care and the management of chronic disease. These components of GP-provided care have the potential to improve health outcomes, lower costs and reduce the need for future more costly interventions.

    In contrast, specialists tend to be reactive and expensive, seeing patients only when a health condition has taken a turn for the worse, when surgery, expensive pharmaceuticals, or other intensive treatments are required.

    Of course, a modern health-care system needs a high-quality specialist sector; specialists are the doctors patients rely on when they’re sickest. But workforce planners should strike the right balance between primary care and specialist physicians.

    So what is causing the growing imbalance towards specialism in medical career decision making?

    Our recent study asked junior doctors in Australia about their job preferences. We did this using a discrete-choice experiment, where respondents made hypothetical but realistic choices about their future career. By analysing their responses statistically, we could tell what factors drove their choices.

    Our results show a range of factors affect choice of speciality. Opportunity to practice procedural work and academic opportunities are some of the factors that drive junior doctors to specialise rather than choose general practice. But the elephant in the room is money.

    Specialists in Australia earn almost twice as much as GPs. Survey data shows average earnings in 2012 of $194,000 for GPs and $360,000 for specialists. Even when adjusted for the longer hours that they work, specialists’ hourly wages are still 60% higher than GPs.

    We found expected earnings have a large effect on choice of speciality. But lowering the income gap could redress the situation. Our modelling shows that increasing GPs’ earnings by A$50,000 per year (a 28% increase from 2008 levels) would increase the number of junior doctors choosing general practice by 11%, or 247 more trainee GPs per year.

    So, how can policymakers increase GPs earnings relative to specialists?

    The main policy tool available is Medicare. Medicare influences GPs’ earnings via rebates for the consultations they provide. Increasing Medicare rebates for GP services would therefore be a simple way of increasing their earnings. Of course, this is entirely the opposite of current government policies to introduce co-payments for bulk-billed consultations and reduce rebates.

    Innovative payment mechanisms may provide a more cost-effective way of increasing GPs’ relative earnings. Introducing additional funding sources using capitation (where doctors are paid for looking after enrolled patients for a whole year, not just per consultation) and pay-for-performance would allow earnings increases to be linked to higher quality of care, rather than just the number of consultations provided.

    Increased earnings for GPs needn’t blow a hole in the budget either. Offsetting savings could come from targeted reductions to Medicare rebates for specialist services, which would reduce the earning power of specialists, especially those working in private hospitals on privately-insured patients.

    In 2012/13, the government spent $3.9bn subsidising private specialist consultations. A proportion of these Medicare subsidies could be redirected to GP consultations.

    Together, these measures could reduce the relative earnings advantages of specialists over GPs, encouraging more junior doctors into general practice.

    Peter Sivey is Senior Lecturer, School of Economics at La Trobe University. This article was first published in The Conversation on 7 August 2014.

     

  • How does Australia’s health system compare.

    The Treasurer, the Minister for Health and the Commission of Audit have warned us in one way or another that the Australian health service is unsustainable, particularly with an ageing population. The Treasurer tells us that the age of entitlement has to end in health as elsewhere.

    We need to keep modernising Medicare but by almost any international comparison we have one of the best and most sustainable health services in the world. We need to keep our problems in perspective.

    The Commonwealth Fund publishes a regular research report on health systems in major countries. The Commonwealth Fund is a highly regarded private US foundation that compares major systems around the world to stimulate innovative policies and practices in the US and elsewhere.

    In its 2014 report ‘Mirror, mirror on the wall’ it compares the performance of healthcare systems in eleven major countries. The comparisons cover quality of care, access, efficiency, equity,‘healthy lives’ and health expenditures per capita.

    Its overall health ratings for these eleven countries were as follows:

    1. UK
    2. Switzerland
    3. Sweden
    4. Australia
    5. Germany and Netherlands (equal)
    6. .
    7. New Zealand and Norway
    8. .
    9. France
    10. Canada
    11. US

    On almost all the measures the UK with its National Health Service is a stand-out performer. It has well and truly stood the test of time. The single payer nature of the UK health service is its strength. The regular laggard in almost all these rankings is the US. It tells us a great deal about the failure of a health service based on multiple private insurance payers. (Our private health insurance lobby is trying to take us down this disastrous US path.)

    When one looks at the break-down of these rankings, the UK ranks at the top in quality of care, access, efficiency and equity. US ranks last in access, efficiency and equity. What is more, the UK system is the cheapest at $US3,405 per capita in 2011 compared with the US, the most expensive at $US8,508 per capita in that same year.

    As indicated above, Australia stands at number four in overall rankings amongst the eleven countries. In particular areas we ranked as follows

    • In quality of care we ranked number 2.
    • In access, we are well down the list at number 8. This reflects in part our high level of co-payments or out of pocket costs. The proposed $7 co-payment will add to our problem of access.
    • In efficiency, we rank number 4.
    • In equity we rank number 5, which reflects in part our failures in mental health, indigenous health and in remote healthcare.
    • In ‘healthy lives’ we rank number 4.
    • In health expenditure per capita in 2011 at $US3,800 we were the third lowest amongst the 11 countries.

    Another measure of our success of course is our high life expectancy.

    It is quite clear that by world standards we rank quite well. We are behind the UK, but far ahead of the US. The single payer Medicare has also stood the test of time.

    But there are ways that we could improve our health services.

    • Mental health, indigenous health and remote healthcare are major shortcomings.
    • Our co-payments are confused and inequitable.
    • Subsidised private health insurance makes it harder for Medicare to control costs. (I find it hard to put up with the gall of the private health insurance funds that will never publicly debate their cause, privately lobby ministers in order to achieve results that will take us down the disastrous US path.)

    There are many ways in which the efficiency of our system could be improved and costs better managed.

    • The split of commonwealth and state responsibilities adds to costs and hinders integration of hospital and non hospital care.
    • The remuneration of doctors through fee-for-service is a perverse incentive which encourages over-servicing and over-prescribing. It also hinders the treatment of long-term chronic sufferers.
    • The government subsidy to private health insurance adds $5 billion plus per annum to government costs, benefits the wealthy and weakens Medicare.
    • Australian drugs cost substantially more than in NZ..at least $2b. pa.. because of the clout of Medicines Australia in negotiating prices with the Australian government.
    • With its lobbying power, the Australian Pharmacy Guild protects pharmacists from competition.

    There is a lot we can do to improve healthcare in Australia and better manage costs. But overall, we have a very good and sustainable health service which ranks well against comparable countries. We need to keep a sense of proportion.

    For further information on the Commonwealth Fund Report, including the overall rankings, google The Commonwealth Fund and search Mirror, Mirror on the Wall 2014 Update.

  • Turning the federation clock back to 1901.

    The Commission of Audit has made many unhelpful suggestions about budgetary and economic issues. It seems to have been driven more by ideology than fact.  See my blog of May 1 2014 “The Commission of Audit and facing the wrong way”.

    One of its most unhelpful suggestions is that Australia returns to the 1901 intentions of the federation fathers and with clear lines of responsibility drawn between the commonwealth and the states as set out in Section 51 of the Constitution. The Abbott Government’s terms of reference for its White Paper on Federalism also suggest that his government would like us to go back to the arguments about sovereignty. We are being urged to look back to 1901 rather than focus on the way our constitution has evolved to date and will need to evolve in the decades ahead.

    This sterile debate about states’ rights comes and goes, but the issue is never resolved. Malcolm Fraser attempted to do what Tony Abbott now suggests – defining sovereignty clearly between the commonwealth and the states. But Malcolm Fraser’s plans went nowhere. The same will happen over the present intentions of the government.

    In his blog on the Federation on May 23, 2014, Michael Keating set out very persuasively I thought why the national government has become pre-eminent and why that trend is likely to continue.

    • We now have a national market and face strong global competitors in a way that our founding fathers would never have dreamt of.
    • The powers of the commonwealth government have grown remarkably eg pensions, health services, managing the national economy and migration.  The exercise of these powers by the commonwealth government has been necessary and beneficial.
    • The commonwealth government dominates the taxation field and that will continue. The states could impose state income taxes but have chosen not to. High Court decisions over the long term have been consistently against the states in key areas.

    With three levels of government, commonwealth, states and local government, we are over-governed. With the territories we have nine departments of health, nine departments of education, nine departments of transport, and so on. There is great waste and duplication.

    The best solution would be to abolish the states as Jeff Kennett and others have suggested and replace them with fewer local government bodies that have substantially increased powers and coverage. That would best serve Australia’s interests but unfortunately the abolition of the states is not going to occur.  The states remain poor and proud.

    But there are possible ways that we could reduce duplication, waste and the blame-game between the commonwealth and the states.

    The two biggest areas of overlap, confusion and expenditure by the states and the commonwealth are in education and health. In 2010-11, education spending by the states and territories was $48.1 billion or 24.3% of total state spending. In that year, spending by the states and territories on health was $49.9 billion or 25.1% of total state spending. Health funding by the states is likely to remain the fastest area of expenditure growth.

    Together education and health are responsible for over one half of state budgets. Reducing overlap, confusion and spending in these two areas would make a substantial contribution to our federation and particularly the delivery of improved education and health services at lower cost.

    For years I have argued that in the health field the best solution to end the blame-game and confusion, and to integrate health services and improve the quality of care, would be to establish a small joint commonwealth-states health commission in any states where political agreement could be achieved. See my blog of June 3 ‘The blame-game in health’. A small planning commission would cost very little compared with large likely cost savings. Further the cost could be reduced by scaling back commonwealth and state government health department costs.

    A joint agreement on governance in health, the pooling of all commonwealth and states health funds in that states, and the implementation and monitoring of an agreed health plan in that state would be a major improvement in health services. Those services would continue to be delivered by the existing suppliers – commonwealth, states, local or private. An obvious example of the benefits of such a joint health commission is a reduction in hospital admissions. It is estimated that about 750,000 admissions to public hospitals each year in Australia could be significantly reduced if the commonwealth government improved the services available in primary care in the critical weeks before hospital admission. The problem is that the commonwealth largely funds primary care and the states largely fund public hospitals with poor integration between the two.

    Implementation of such a joint arrangement would be relatively easy. The real obstacle is securing a political agreement.

    We should also keep in mind that when Kevin Rudd proposed a takeover of states hospitals as a last resort, there was strong public support for this action as shown in opinion polls. Unfortunately he backed down and the health confusion continues.  The public would be open to a major reform in health.

    I am confident that joint arrangements in health that I have suggested would be the best way to end the confusion between commonwealth and state responsibilities. It would be more in keeping with our current needs and aspirations than going back to the federalism of 1901.

    It was a great achievement for Australians to come together in the federation of 1901. It was a real break-through at the time but the split of commonwealth and state responsibilities in 1901 is not particularly helpful for us in this century or the next.

    The key features of such an arrangement in health could be applied in the education field.

    Although with some rancour, our federation has evolved since 1901. We should look forward to the sort of society and economy that we should become in the future rather than nostalgically looking back to 1901.

  • Rod Tiffen. ‘The Australian’ and tobacco consumption.

    As the Australian approaches its 50th anniversary amid much self-congratulation, an insight into its editorial standards and how it conducts itself in controversies is provided by its recent reporting of competing claims over tobacco consumption.

    Tobacco is still the largest preventable source of premature death in the world.

    Despite the scale of its damage the Australian’s owner Rupert Murdoch has always had a curious attachment to the tobacco industry.  He was on the Philip Morris Board for a decade, and members of that company have often been on the News Corp Board.  Internal Philip Morris documents in the US described him as sympathetic to their position and his newspapers as ‘our natural allies’ and noted that his papers rarely publish anti-smoking articles.

    The fight to reduce the problems caused by tobacco has been a great policy success in Australia.  While around 37 per cent of the adult population (15+) smoked cigarettes daily in 1970, only around 16 per cent do now, and the decreases in per capita tobacco consumption have been even more dramatic, now around one third of their 1970 levels.

    There have been three strands to achieving this reduction.  The first has been public education….  The second has been raising the price of cigarettes…  The third has been legislation restricting areas where people can smoke, and importantly the ability of the industry to advertise its product, to give smoking a ‘cool’ image.  This was gradually extended from advertising on radio and television to print advertising to event sponsorship.

    The latest such measure came when under the Labor Government, led by Health Minister Nicola Roxon, Australia became the first country in the world to mandate that cigarettes could only be sold in uniform plain paper packaging, a move aimed at making young people less likely to take up smoking.

    It is interesting to note that before the enactment there were several scare campaigns by the tobacco lobby.  Tim Wilson, of the Institute of Public Affairs, which is reported to receive funding from the industry, said that the legislation could cost Australian taxpayers $3 billion in lawsuits over the intellectual property surrounding cigarette packaging.  The sum at the moment is closer to zero.

    On June 6, in a front page ‘exclusive’ by Christian Kerr was headlined ‘Evidence “World’s Toughest Anti-Smoking Laws” not working’/Labor’s Plain Packaging Fails as cigarette sales rise’.  It began ‘Labor’s nanny state push to kill off the country’s addiction to cigarettes with plain packaging has backfired, with new sales figures showing tobacco consumption growing during the first full year of the new laws.’  A supporting editorial began ‘Suck it up nanny, plain cigarette packs have not cut smoking.’  Columnist Judith Sloan followed up ‘The nannies are panicking’, and referred to ‘Head Nanny, Nicola Roxon’.  Henry Ergas similarly began ‘Not every nanny encourages her charges to take up alcohol and tobacco, but then again not every health minister is like Nicola Roxon.’

    The one piece of hard evidence in the original article is an industry survey commissioned by the tobacco industry to be used in lobbying against the introduction of similar laws in Britain.  More problematic than the provenance of the data is that the company was only prepared to release selective snippets, which makes it difficult to evaluate its overall worth and meaning.  The industry claim that smoking sales had increased was fleshed out with anecdotal evidence.  Except for a one paragraph ritual denial from the Labor shadow minister all the examples went in the one direction, that the policy was having no effect.  The owner of a convenience store, for example, was cited, but no public health experts.  A later story quoted a ‘proud’ Brisbane smoker saying the policy had had no effect on her.

    It is especially notable that the newspaper did not cross-check its industry data with any official data sources.  Others soon filled the gap.  The blog by leading economic analyst, Stephen Koukoulas, ‘the Kouk’, challenged the story by using Australian Bureau of Statistics National Accounts figures which indicated a decline in smoking over the calendar year 2013.

    A much bigger reaction followed Paul Barry’s dissection on the ABC TV’s Media Watch on June 16.  Skewered yet again by its arch-enemy, the Australian reacted vigorously.  It ran five stories on the topic the following Wednesday.  In the subsequent week or so, there were two editorials, a couple of references in ‘Cut and Paste’, and several news stories and commentary columns. Such huge attention was clearly more due to bruised editorial egos than to audience interest.  The coverage offers an instructive guide to how the Australian conducts controversies about itself.

    In this tobacco controversy legal affairs editor Chris Merritt criticised Media Watch for not disclosing that Stephen Koukoulas had worked on Julia Gillard’s staff for 10 months, and using Professor Mike Daube who had been a member of the government panel that recommended plain packaging laws.  Daube is an eminent authority on public health, while Koukoulas was a senior member of the Treasury for many years, and is a leading economist.  But red trumps expert in the eyes of the Australian.  Conversely the paper did not indicate that two of its staff working on the story – Christian Kerr and Adam Creighton – had worked for the Liberal Party, while one of its experts, Sinclair Davidson, had links to the Institute for Public Affairs, which is supported by the tobacco industry.

    The newspaper then wheeled out its three favourite academics – Judith Sloan, Henry Ergas and Sinclair Davidson – in its defence.  All three got the basic facts wrong.  Davidson asserted that ‘I have no doubt that the consumption of cigarettes has risen since plain packaging was introduced; we just can’t be sure whether it is by existing smokers or new smokers’.  Sloan repeated this claim.  Ergas claims that Australian Bureau of Statistics data shows tobacco consumption increased by 2.5 per cent in volume terms in the year immediately after the introduction of plain packaging.

    In fact, the statistical evidence is fairly clear, and in the other direction.  According to Media Watch the industry admits that the number of smokers fell in 2013 by 1.4%, and also that the number of cigarettes smoked per person fell by 1.4%.  Alan Austin gives the quarterly figures on household expenditure on tobacco consumption for nine quarters from March 2012 to March 2014.  Each quarter in 2013 was below its 2012 equivalent except for the December quarter.  Then there was a sharp fall in the March 2014 quarter.  Later Treasury data was released, and it advised that ‘tobacco clearances’ fell by 3.4 per cent in 2013 compared with 2012.  Clearances are an indicator of tobacco volumes in the Australian market.’

    The one exception to this consistent picture of declining consumption – and the one that the newspaper’s commentators have seized on without giving its context – is a spike in the last quarter of 2012.  This was almost certainly due to the anticipation by retailers and some customers of the large customs rise which was scheduled to occur in December.  Predictably this momentary increase was followed by a large decrease in the next quarter.

    The other figure used in several reports is a trend towards increased sales at the cheap end of the market.  But this is not inconsistent with a decline in aggregate sales.  Cheaper cigarettes now command a larger share of a shrinking market.  Their growth has been more than cancelled out by the decline in the more premium brands, no doubt to the chagrin of the tobacco companies.

    All three of the Australian’s columnists based their commentary on a false reading of the data.

    The paper’s economics correspondent, Adam Creighton (19-6-2014) argued that the data ‘do not discredit the Australian’s claim the policy might have contributed to rising sales of cigarettes.’  Actually, there was no ‘might’ in headlines such as ‘Plain fact: more people smoking’.  He also still believed that ‘as of now there is no evidence to refute the industry’s claims of a rise in the number of cigarettes being smoked …’

    What would a reader relying solely on the Australian know after all this coverage?  They would not have a clear idea of what the paper’s critics had been saying, or why they were saying it. They would not know that the AMA and Cancer Council had criticised the paper’s coverage as misleading.  They would probably think that tobacco consumption had increased rather than decreased.  They would not have had a clear and unvarnished account of the official statistics, or where the weight of the evidence lies.

    One cannot help thinking that the Australian in 1964 would have covered the tobacco story more competently than did the Australian in 2014.

    Rod Tiffen is the Emeritus Professor, Government and International Relations, University of Sydney. The above are extracts from a paper which will shortly be published by Inside Story.

  • Woolworths and Pharmacies.

    The response of the Australian Pharmacy Guild (APG) to Woolworth’s proposal for free health checks was entirely predictable. It was about protecting the territory of pharmacists.

    But the APG did have a point. Are the leviathan department stores who sell large amounts of alcohol and tobacco really serious about our health? I don’t think so?

    But if the challenge of Woolworths would help curb the anti-social behaviour of the APG that would be a real public service.

    Pharmacists are the most over-qualified and under-utilised of health professionals. In the national interest and in their professional interest, pharmacists must participate in the transformation of our health sector. The 5,000 or so pharmacies on high street are a highly accessible and high profile resource, more so than GPs’ surgeries. Pharmacy attracts HSC students with high academic scores. Standing at the boundary of self-care pharmacists provide a range of services to customers – advice on medications, advice to see the GP, aches and pains, colds and flu, burns, rashes and abrasions. I cannot see why pharmacists for example shouldn’t almost immediately undertake blood tests, as well as flu injections and managing repeat prescriptions.  Their more active involvement in preventive health programs and primary care in general is essential.

    But the APG sees pharmacists primarily as shop keepers rather than health professionals

    Professor Sansom, described as Australia’s ‘pre-eminent pharmacist’, a former Chair of the PBAC, and the Australian Pharmacy Examining Council, put it bluntly a few years ago. ‘The profession would miss out on inclusion in future healthcare models unless it changed its current structure.’  He added ‘the current structure which is heavily structured on drug distribution…All of those things together and independently restrict the innovation and development in pharmacy practice which will promote this profession as a legitimate partner in new primary healthcare delivery models rather than being seen simply as a distributor.’

    Andrew Gilbert, Professor and Director of the Quality Use of Medicines and Pharmacy Research Centre at the University of South Australia, also described the problem very graphically a few years ago…

    ‘I know from the many telephone calls I get from disgruntled young pharmacists who are expected to dispense over 300 prescription items a day. They say that they are instructed that their primary duty is to supply the product, correctly labelled to the right person and that this type of professional performance measure limits any attempt to work with patients, to use Consumer Medicines Information Sheets as part of the patient consultation process and to provide a primary healthcare service. … These [supply] requirements leave no time for patient-centred healthcare, primary healthcare services, patient education and training, professional development through mentoring by experienced pharmacists and discussions with other health professionals regarding the care of complex patients. Professional services … [are] viewed as optional extras by many community pharmacists; services that may be provided if they are not too busy with the core business – supply. … Why is one of the most valuable professional services a pharmacist can offer, a pharmaceutical care focussed review in collaboration with the patient and their doctor only offered as an add on service in some pharmacies that chose to participate.’

    In addition to resisting the enhanced professional role of pharmacists the APG is in the front line in resisting competition. For example pharmacies must generally, in urban areas, be 1.5 km from each other? One consequence of this restriction of competition agreed to by the PGA and  Australian governments is that the number of community pharmacies has remained substantially unchanged at 5,000 since 1993.(At 30 June 2012  there were 5298 community pharmacies)  There are Pharmacy Location Rules which effectively put a cap on pharmacy numbers, This capping of pharmacy numbers is despite  population increase of almost 30 % since 19993 and an increase in PBS services, including Repatriation Pharmaceutical Services of over 80% since 1993.  In 1993, the average number of PBS prescriptions per pharmacy was 21,200. Last year it was close to 40,000.

    The consumer organization, Choice, in 2005 commissioned a study by the Allen Consulting Group on these location rules. Choice commented that ‘the location rules provide little consumer benefit and only advantage existing pharmacy operators’. (Choice, August 2009, p65)

    Last week the Productivity Commission said ‘There has been a failure to act on recommendations of a national independent review of pharmacies to relax ownership and other competitive restrictions”

    Our pharmacy sector needs a major shakeup. It needs to encourage pharmacists and particularly young pharmacist to be in the front line of primary care including employing nurse practitoners. In short they need to be less like shopkeepers and more the professionals they were trained to be. Further we need more competition but not from types like Woolworths

    I outlined the above case to the 2009 Pharmacy Australia Congress. It was well received well by many pharmacists but not by all. It was particularly welcomed by younger pharmacists who felt their professional skills were not being effectively used. Subsequently I accepted an invitation to speak to the Australian College of Pharmacy Dinner in Brisbane. It was described as a “must not miss event”. But the invitation was withdrawn. It was the first time in my public life that this had occurred. Perhaps I did not have the pulling power I thought! But the real reason for the withdrawal I am certain was that the APG leaned on the Brisbane College. This is typically the way the APG works–don’t engage in public debate but like all vested interests covertly lobby ministers, members of parliament and senior officials. That lobbying would now be going on with the present five year Pharmacy Agreement to expire in June next year. The present agreement is worth over $10b or $2m each year for the 5000 or so community pharmacies in Australia

    The APG like other powerful vested interests in the health field, the AMA, Medicines Australia and the Private Health Insurance Industry stand in the way of necessary reform. The public pays in higher prices and higher taxes.

  • Out-of-Pocket Costs in Australian Healthcare and the $7 Co-payment.

    In my blog of  May 12 on health co-payments I set out my objections to the proposal including that we already have a very high level of co-payments, that they are a “dogs breakfast” and that the proposal on its own would be unfair. The debate has moved on since then which raises further concerns about a proposal which covers not only GP consultations but pathology and radiology tests and pharmaceutical prescriptions as well.

    My first concern relates to process and where this co-payment issue might be headed. Minister Dutton has repeatedly said that he wants ‘to start a national conversation’ about health. I agree. But the minister doesn’t do what he has promised. He has barged in with a ‘solution’ to the “unsustainability of Australian healthcare”, without any ‘conversation’. In practice what he is proposing in the budget is a mechanism to kill bulk billing and clear the ground for Private Health Insurance to fill the gap. Minister Dutton has said repeatedly that the government has an interest in greater involvement of PHI in primary healthcare. He said ‘we will be… looking over the next few years at new and innovative ways in which we might fund and deliver primary healthcare, including through partnerships with private insurers’. He has expressed interest in trials of PHI in primary care in Queensland.

    In terms of equity and efficiency it is remarkable that the government proposes a $7 co-payment, but maintains the $5 billion p.a. subsidy for PHI. That is real corporate welfare at the expense of low income earners and our health service in general.

    The intrusion of PHI into primary healthcare should be strenuously resisted. The experience with PHI around the world is clear, particularly in the US. It pushes up costs dramatically and does not improve health outcomes. There is no benefit to the Australian community if the government saves $1 in official taxes, only to turn round and for the community to pay  a lot more  in ‘taxes’ to BUPA, Medibank Pte or NIB, for the same or an inferior service. Because of its intrinsic inefficiency PHI will always be more expensive than Medicare. Since 1999 average PHI premiums have increased 130% whilst the CPI has increased by only 50%. PHI administrative costs are about three times higher than Medicare’s.

    I have written extensively about the damage that PHI does wherever it gets a foothold. The encroachment of PHI into primary healthcare as suggested by the minister is a much more serious threat to our universal system of healthcare than the co-payment in itself.

    Warren Buffet has described PHI as ‘the tapeworm in the US health sector’. It is also true in Australia. Its expansion here should be resisted. Minister Dutton is quoted as saying that he ‘will never go down the path of a US style healthcare system’. But allowing PHI into primary healthcare would take us down the American path.  Private doctors and private hospitals have enormous power to set prices unless there is some effective counter. Multiple private insurers have little power to control these prices as the US shows. Only a single payer, usually a public payer has the power to control prices

    My second concern is that co-payments could discourage disadvantaged patients from seeing their GP. The COAG Reform Council has just reported that 5.8% of Australians delayed or did not see a GP because of cost and 8.9% delayed or did not fill a prescription from their GP because of cost. A co-payment will make that worse. It will force some patients to use more expensive and less appropriate emergency department services in public hospitals which are already under great pressure.

    Third, the proposed co-payment will undermine preventive health services and continuity of care for people with chronic conditions. The best place to focus on prevention and at an early stage is in primary care. Any discouragement of access to GPs because of the co-payment would be detrimental to preventive healthcare. The decision by the government to abolish the National Preventative Health Agency is an indication of the government’s lack of concern on health prevention. The tobacco, alcohol and the junk food industries will be pleased with that abolition decision. A strong primary health care sector is the key to an equitable and efficient health care system anywhere in the world.

    Fourthly, the best way to reduce costs and pressures in primary care is not through a co-payment but to move away from fee-for-service remuneration. This type of remuneration promotes ‘turnstile medicine’. FFS may be appropriate for occasional and episodic care but it is not appropriate for long-term and chronic care. We need a major review of remuneration practices in primary care with more emphasis on capitation and bulk-charges for chronic care to keep people well at minimum cost. The British single payer system has many advantages. One advantage is as the Economist of May 31 2014 put it, “doctors are paid to keep people well, not for every extra thing they do so they don’t make money performing unnecessary tasks and tests.” Addressing this remuneration question is far more important than a co-payment.

    Fifthly, there will probably be unintended consequences for the $7 co-payment. If the co-payment takes effect, it is likely to result in an increase in doctor’s fees. The attraction of bulk billing for the doctor is that it removes the cost of handling and accounting for transactions. An invoice is sent directly to Medicare. Once the doctor is obliged to handle the $7 co-payment, another transaction occurs, either by cash or probably credit card. This inevitable patient/doctor money transaction will provide the doctor with an opportunity to charge above the bulk billing rate. As soon as doctors stop bulk billing, we can expect a rapid rise in doctors’ fees on top of the $7 co-payment.

    Sixthly there are numerous other ways to reduce health costs and by billions of dollars e.g. the duplication and gaps in health care between the Commonwealth and the States, the out of date list of medical services funded under the MBS,, adverse events, archaic workforce structures and high drug costs resulting in us paying more than $2b pa than our New Zealand friends for equivalent drugs. But real savings in these areas means tackling vested interests like the AMA. The Pharmaceutical Guild, Medicines Australia, State health departments and the PHI sector. It is politically easier to attack the less powerful by a co payment.

    Far from having a sensible and informed public discussion about health, Minister Dutton has embarked on an ill-considered and ideologically driven course.

     

  • Jane Tolman. Dementia: how did we get it so wrong?

    In the past few weeks I have had the privilege of participating in the second running of the Massive Open Online Course (MOOC) on Understanding Dementia run by the Wicking Dementia Research and Education Centre at the University of Tasmania. This has provided a forum for learning and discussion about dementia for 15,000 carers, health professionals and interested persons from all around the world.  More than that, the participants are able to seek answers to their questions, and to tell us their concerns about their “journey” and about their expectations.

    I think there is much room for improvement in the way health professionals have dealt with dementia.

    We handle the diagnosis of dementia very badly. Families complain that doctors are unwilling to make the diagnosis, defer the diagnosis, or deny the diagnosis (just getting old). Statistics tell us that only about 40% of people with dementia ever get a diagnosis. There are established sets of criteria for diagnosis; but many of us still use a cut-off score on a basic cognitive test to make a diagnosis, maintain that a diagnosis can only be made post mortem with a biopsy, or tell our patients that it is a diagnosis “of exclusion”. While evidence suggests that the personal story (history in doctors’ language) offers considerably more weight to a diagnosis than any examination finding or test, families still find it hard to put their case, present their information and are sometimes dismissed due to privacy issues.

    Notoriously, people with dementia develop a lack of understanding of their situation.  Doctors call this “lack of insight”. People with dementia also lack skills required to make good decisions, to reason and to solve problems. These features of dementia are poorly recognised by many health professionals.  And yet they can expose the person with dementia to extreme danger.  Assessing cognitive capacity for decision-making can be challenging. Many clinicians are hesitant about providing an assessment, and many who do so, provide an inadequate assessment. It is essential that doctors embrace this role, and develop their competence in such assessments.

    What families most want to know about dementia is what will happen as the condition progresses. When we do make a diagnosis, we rarely address this.  Current staging systems of dementia tend to focus on what people can do rather than what their needs are, are often designed for research, and rarely address the real need: how to provide dignity to very vulnerable people.  At the time of diagnosis, or soon after, loved ones (and the person with dementia where relevant) should be given information about the stages ahead and what they mean.  There should be a “road map” to help people navigate the path.

    Dementia is often described as a memory problem and clinics for its diagnosis and management are still sometimes labelled as Memory Clinics. It’s time that we acknowledged that dementia is about a range of domains, including Cognitive (memory, language, insight, judgement, planning, reasoning), Function (inability to perform household and other tasks and ultimately personal care) , Psychiatric (commonly delusions, hallucinations and depression), Behavioural (aggression, screaming, following, calling out) and Physical (swallowing, continence, mobility and eating). Families and carers have the right to know the facts.  When these symptoms of dementia arise, families should not be surprised and need to be able to recognise these as manifestations of the disease.

    Dementia is a relentlessly progressive terminal illness. As a profession we have failed to identify dementia as a disease which has much more in common with cancer than with forgetfulness. At the time of diagnosis of other neurodegenerative conditions such as Motor Neuron Disease, a palliative approach is often instituted from the start, and early decisions are made about future feeding and assisted breathing. But in the case of dementia, we often offer families few choices, because we have failed to recognise that quality of life will be compromised, or to identify the role quality of life plays in decisions about management.

    The behavioural and psychological symptoms of dementia are common, and yet they are poorly understood by many of us.  Many clinicians offer treatments which have little (or sometimes no) demonstrated usefulness and which have well documented adverse effects.  We continue to offer medications which sometimes only work by virtue of their sedating effects, and we fail to communicate the facts to families. The best evidence from international data is that at best 20% of those with dementia who receive antipsychotic medication for the treatment of behavioural and psychological symptoms derive benefit. Despite this evidence, up to 80% of the residents of aged care facilities who have dementia are regularly taking antipsychotic medication.

    Despite the rhetoric, we rarely practise holistic, person-centred medicine when it comes to dementia.  This would mean the following: acknowledging that every person with dementia is a unique case; providing the knowledge which is essential in making wise decisions about management, and being aware of the evidence; ensuring that there is a decision-maker who can make informed decisions (in collaboration with the clinician); offering choices, and perhaps above all ensuring that this, of all conditions, requires a very clear focus on dignity for the person with dementia, and careful consideration of best way of providing it.  Management of dementia should always be a collaboration between the person with dementia, the loved ones, the medical team and paid carers.

    The MOOC has taught me that we need to listen more to those who live with dementia; that is to the carers, both loved ones and professionals. We can provide good care for those with dementia. But in many ways, we need to go back to the basics.  And we need to make sure that we listen to carers, engage them in management and acknowledge the critical role of education.

    Dr Jane Tolman is Director of Aged Care, Royal Hobart Hospital.

  • Mary Chiarella. Nurses – debt and job satisfaction.

    In the AFR Laura Tingle rightly points out that nurses do not tend to fit the mould as one of those groups of fortunate students who may reap significant income returns for the cost of their university education. She goes on to point out that “modelling released by Universities Australia this week suggest nurses’ uni debts will rise from $19,398 to as much as $37,390 under the budget proposals. This is for a job paying a starting income of $48,729”. She calculates that a nursing graduate who works 6 years full time on graduation, followed by six years part-time before returning to full time work, would have a debt of $66, 195 that would take 22 years to repay.

    So this brave new world of market forces is pretty bad news for nursing recruitment. That is even if you consider that caring ought to be commodified in the first place or whether there are some things that are so important the market should protect them rather than hang them out to dry. Remarkably people often feel quite differently about these matters when they are in need of intensive or palliative care.

    But wait, there are more spanners to throw into the works. It’s also ipso facto bad news for nursing retention. This comes not long after Health Workforce Australia’s report Health Workforce 2025 (HWA, March, 2012) modelled future requirements for registered nurses and identified that, with no changes to the status quo, there would be a shortfall in registered nurses of 109,000 or 27%. As it turns out the government also decided to get rid of HWA in the last budget, so these data won’t bother them for much longer.

    Note this is a report on registered nurses. This distinction matters for safety and quality in health care.  We have an abundance of information about the impact of baccalaureate prepared RN staffing on reduction of adverse events. If the cumulative evidence from these studies were a pill, they would have stopped the trials and given the pill to everybody. Duffield et al’s work (2007) in NSW looked at the relationship between skill mix and adverse events, and governments and their advisory bureaucracies should ignore it at their peril. It is the biggest study ever undertaken examining the relationship between these two issues at unit level and she has received international acclaim as a result of it. For every 10% increase in RNs there is a 27% decrease in failure-to-rescue –we have wards way below that level today.

    But HWA’s report points out that we wouldn’t need that many nurses if we only retained 1 in 5 (ONE IN FIVE!!)  of the ones we currently lose. A 20% improvement in retention would ameliorate the predicted RN shortage –so we really only need to understand why they are leaving and do something about it. Elementary.

    A synthesis of serial investigations and reports demonstrates that the two primary reasons why nurses leave the profession are a sense that they are not valued and a belief that they are not able to deliver high-quality care. Job satisfaction is therefore connected with both skill mix and shortages. The work environment plays an important role in job satisfaction and patient safety as well, as Aiken and colleagues’ multi-country studies indicate (2010). In a number of their studies, hospitals providing “supportive” environments, in terms of staffing levels and organisational factors, were more likely to have better patient outcomes compared to less “supportive” hospitals. These findings are consistent with other surveys indicating the central role of the work environment in job satisfaction and patient safety. So a simple question, will increasing the HECs debts and anxiety improve the work satisfaction of our RN workforce Mr Abbott?

    Mary Chiarella is Professor of Nursing, University of  Sydney.

  • John Menadue. Have we too many doctors?

    There are no international comparisons that I can find that show that we have a shortage of doctors in Australia. In fact, we may be moving into a situation of having a surplus of doctors.  In its “Health at a glance” the OECD found that we are above the average in our supply of doctors. The OECD provided details of “practising doctors per 1000 of population in 2011” for over 40 major countries. The OECD average was 3.2 practising doctors per1000 of population. Australia was slightly above the average with3.3 practising doctor’s per1000 of population. For the Netherlands it was 3.0, for the UK 2.8, for NZ 2.6 and Canada 2.4. The top four countries with over 4 practising doctors per 1000 were Greece, Russia, Austria and Italy. The OECD is quite explicit about trends in Australia It says “in several countries (e.g. Australia, Canada, Denmark, the Netherlands and the UK) the number of medical graduates has risen strongly since 2000 reflecting past decisions to expand training capacity…In Australia the number of medical graduates has increased two and a half times between 1990 and 2010 with most of the growth occurring since 2000”

    In 2004 when Tony Abbott was Minister for Health he decided against advice that we had a shortage of doctors. As a result the number of domestic students graduating from medical schools in Australia increased dramatically from 1,287 in 2004 to 2,507 in 2011. It has been described as a “tsunami” of medical graduates. The OECD found that in 2011 with 12.1 medical graduates per 10,000 of population we were well above the OECD average of 10.6. We know that this increase in numbers is making it very difficult to find training places for the increased number of medical graduates.

    We also know that with bulk billing and with patient dependence on the advice of their doctor about future appointments, tests and referrals, doctors have an ability to generate work for themselves and other professionals. Doctors can and do drive the demand for their services through fee for service.  That has serious cost implications.
    Apart from the total numbers the other important issue is the distribution of doctors across Australia.  All the data shows serious shortages of doctors and other health professionals in rural and remote Australia. These shortages are occurring despite the fact that we now have about 3,000 International Medical Graduates (IMGs) who are tied to areas of need. These IMGs have performed a useful role in rural areas although there has been some concern over language and sometimes professional skills. However it seems logical and legally defensible (“civil conscription”) that if we can determine where IMGs can work, why can’t we do the same for Australian medical graduates and insist that new provider numbers only be issued according to need in Australia. We don’t need more provider numbers and doctors in Belleview Hill and Toorak, but we do need them in rural and remote Australia.  Through governments, taxpayers subsidise medical education and about 80% of the remuneration of doctors comes from government. There is a legitimate interest in new doctors working in areas of need, at least in the early stages of their career. Hopefully they will find professional and personal satisfaction in country areas and decide to stay.

    Another option to overcome shortages of doctors in rural Australia would be to auction provider numbers by postcode but that would probably be too radical for many professional people who don’t like open markets.

    In short we are moving to a surplus in the total number of practising doctors but serious shortages still exist in rural and remote Australia which could be addressed, at least in part by limiting new provider numbers to areas of need.

    Why can we send teachers to areas of need but not doctors?

     

  • John Menadue. The Blame Game in health

    Attempts to resolve the Commonwealth/State blame game have been unsuccessful and expensive. Time and time again federal governments try and buy off state criticism by spending more taxpayer’s money without any real improvements in the delivery of health services.

    This futile blame game is not surprising in a federation where there are nine departments of health for a population of 23 million.

    Over many years there has been confusion about the role of the Commonwealth in hospitals. In 2007 John Howard offered to underwrite community organisations prepared to take over State hospitals. (The issue at the time was the Mercy Hospital in Launceston.) In 2009 in his book Battlelines, Tony Abbott said that a Commonwealth withdrawal from hospitals would be a ‘cop out’. It would be “anachronistic and inefficient”.  Kevin Rudd threatened to take over State hospitals if a satisfactory arrangement could not be made with the States but backed down even though opinion polling showed strong support for a Commonwealth takeover of State Hospitals.

    The Abbott Government now seems intent on winding back the commonwealth’s role in health. It is proposing a reduction of $80 billion in school and hospital funding over the decade to 2024-25.As a result the states are into the blame game again

    The budget announcement is a major breach of faith between the Commonwealth and the States.

    • The Commonwealth has unilaterally cut $1 billion from State budgets from 2017.
    • The Commonwealth will no longer honour an agreement to fund some growth in State hospital costs. The Commonwealth had pledged to partly fund this growth in State hospital costs, provided those costs were based on efficient costs determined by The Independent Hospital Pricing Authority. (We know that there are major differences in costs not only between hospitals but also within hospitals.) This increase in funding based on improved performance by State hospitals has now been abandoned.
    • Furthermore, by sharing the costs of hospital growth for the first time, the Commonwealth had a direct interest in containing hospital costs by making primary care work better and reduce hospital admissions.

    Following this threatened withdrawal of $80 million to the states, the Prime Minister went on the front foot in describing the federation as ‘dysfunctional’. He said that we needed to ‘fix the federation’ and to ensure that ‘the states are sovereign in their own sphere’.

    I can understand his frustration with the federation, but his proposal would take us backwards in a quite dangerous way. His comments on federalism are quite contrary to what he was saying several years ago and now derive more from ideology about ‘state rights’ than common sense and a modern view of our economy and society.

    As Michael Keating in his five part series on this blog, pointed out, there are good reasons for the pre-eminence of the national government in many fields.

    • Unlike the 1890s before federation we now have a national market in almost all key aspects .That national market has to respond to growing global pressures and competition.
    • Responsibilities of the federation have grown enormously since federation. In the 1900s for example pensions did not exist.
    • The national government’s dominance of taxation is clear-cut and will not be reversed. That domination is essential for good economic management.

     

    But that still leaves us with the fact that many commonwealth and state functions are inter-related. Those inter-relationships must be sensibly managed.

    Personally, I would favour a Commonwealth takeover of all state health functions and particularly hospitals. We need national leadership and clear responsibility. In an optimal situation I would like to see the states abolished altogether and replaced by a smaller number of consolidated local governments.

    But that is not going to happen, short of a major crisis. That is why I have proposed what I have called a ‘Coalition of the willing’. In such an arrangement the Commonwealth should offer to set up a Joint Commonwealth/State Health Commission in any state that will agree.  That Commission would be jointly funded by the Commonwealth and the State. There would be one pool of money. This joint commission would plan the delivery of health services in the State and so provide more cohesive hospital and non-hospital health services. It would be a small planning and funding commission with little or no net increase in bureaucratic overheads. In any event any small increase in these costs would be minimal compared with the enormous present costs of commonwealth and state systems duplication and the costs arising from lack of integration between commonwealth and state services. For example the Productivity Commission estimated that 750,000 state hospital admissions could be avoided annually if there were effective interventions in the three weeks before hospitalisation. Those interventions are in the hands of the commonwealth that funds general practise

    In such a joint funding and planning arrangement the delivery of health services would continue through existing health agencies, Commonwealth, State and local government. The new Commission would be jointly appointed by the two governments and with agreed and transparent dispute resolution arrangements. In the event of a disagreement, the Commonwealth position should prevail as it would be the chief funder.

    Tasmania and SA should be obvious starters for such a joint commission given their size and difficult financial position. Hopefully success in one State would then encourage other states to swallow their pride and improve their health services by cooperating with the Commonwealth in a joint commonwealth/state health commission.

    In March 2007, I set out this proposal in more detail .

    I still believe that this is the most sensible and practical way to solve the commonwealth/state impasse and blame game in health. This proposal could also be applied in the education field to resolve the disputes and the blame game in education between the commonwealth and the states.

    I think most Australians are sick of the blame game in health. The problem can be resolved but, in the first instance it requires a political agreement between the commonwealth government and any state that wants to cooperate. With such political agreements implementation would be relatively easy. Politics is the hard part.

    A more modest start would be for the Commonwealth and a State to establish joint arrangements on a regional basis.Commonwealth and State funds would be pooled in that region and agreement negotiated for a health plan for the delivery of all health services in that region.

    We need to coordinate Commonwealth and State health services.

     

  • Stephen Leeder. Electronic medical records for patients!

    Australia embarked on an ambitious journey when it committed to developing a medical record that would go with each patient to whatever health care provider they consulted.  “The eHealth record system — launched in June 2012 — is an electronic record for a patient that contains a summary of their health information.” http://www.nehta.gov.au/our-work/pcehr

    This personally-controlled version, known as PCEHR, was rather akin to establishing a colony on Mars – maybe best to get to the moon first. The enterprise was reviewed in depth last year after faltering.

    The new federal government maintains a modest investment in the project.  According to ITNews : http://www.itnews.com.au/News/385351,budget-2014-what-is-funded-and-what-is-cut.aspx#ixzz33B822dHE  “$140.6 million in 2014-15 has been allocated in the federal budget for the continued operation of the PCEHR system [now to be known as MyHR], while the Government finalises its response to the review of the system.”

    As Sally Glass, a leading health and IT expert describes in eHealthSpace, a Website devoted to health-related IT, http://ehealthspace.org/news/pcehr-review-recommends-opt-out the review contains 38 recommendations.  These proposals illustrate the complexity of the personal electronic record initiative. There is no low-hanging fruit.  The previous governing agency for the personal record is to be replaced by the Australian Commission for Electronic Health (ACeH) that would answer directly to the Standing Council on Health (SCoH).

    In describing Minister Dutton’s comments about IT and health at a recent conference, Glass writes that “The Minister referred to … strengthened governance of eHealth including “crystal clear” accountabilities; [an] opt-out model (which the Minister personally supports); improving clinical usability of the record to increase clinician acceptance and adoption; and how the [MyHR] is structured to hold personal, sensitive information.”

    That is all good but the impeding complexities remain daunting.  Consider, for example, the need for MyHR to use a nationally-uniform set of names for medications. That may sound easy, but given the vast array of prescription and non-prescription drugs, it isn’t.  And then there is the question of incentives to use MyHealth.  How much will doctors be paid to use it and what happens if they don’t?

    No-one should ever have imagined that introducing a personally-controlled electronic medical record would be simple.  So many jurisdictions have an interest in being part of the action. So many different health service providers – hospital doctors, allied health professionals, community based practitioners to name several – would reasonably expect to have access to such a record and to be able to add to it details of their care.  The IT environment of each provider at present is different and MyHealth must interface with each.  The ‘personally-controlled’ aspect means that concerns about privacy and confidentiality – what a person may wish to have in his or her record and what differential access the or she may wish to extend to different providers – are all legitimate and must be built into the functionality of the record.

    The personally-controlled record could even be a health hazard.  Trisha Greenhalgh, a professor of primary health care interested in the sociology of health system changes and who works at Barts and the London School of Medicine and Dentistry, comments:

    “Failed” electronic personal record programs are common and even “successful” initiatives are typically plagued by delays, escalation of costs, scope creep, and technical glitches, including catastrophic system crashes. [By] distracting staff into data entry and standardized protocols, computerized records jeopardize the human side of medicine and nursing and distributed record systems bring unanticipated hazards, including (but not limited to) the insidious growth of the surveillance society.”

    There are simpler models of electronic records that we might turn to first,  the equivalent of putting a man on the moon rather than a family on Mars.  The personally-controlled version contrasts with much simpler electronic records that are held by, say, a hospital or a general practitioner, for patients who consult them.  In both places there will be an institutional IT system into which the record is automatically integrated.  The patient does not control or own that record and does not determine which health professional ads what or sees what is in it.  The safety of confidentiality, long practised for paper-based institutional paper records, can be readily extended to electronic records.

    The logic of starting not with the entire population but inside systems of health of a much smaller size, where managerial control is feasible and electronic records are part of an institutional IT system, such as in the Kaiser Permanente managed care system in California,  suggests an alternate pathway.  These have not proved easy or cheap to establish, but now, in the case of Kaiser, all six million enrolled members have a record that enables coordinated care, from general practice through the hospital and back into the community, includes drugs and tests and enables prevention.  Enhanced communications using secure messaging allow community members rapid and effective access to carers.  The medical centres are paperless.  We are about 20 years behind such achievements.

    In pursuing the highly desirable goal of everyone having an electronic medical record we may need to proceed bit by bit (or byte by byte).  If investment in IT systems for hospitals progressed effectively, that would be an excellent beginning.  Much is happening there, as in general practice, and efforts to bring these different systems together may well be rewarded with the achievement of personal medical records almost as a spin-off.  That may be the best investment proposition.

    Stephen Leeder is a professor of public health and community medicine at the University of Sydney.

     

  • Michael Keating. Part 5. Federalism

    The Government’s Commission of Audit, which preceded this Budget, recommended that policy and service delivery should as far as practicable be the responsibility of the level of government closest to the people receiving those services, and that each level of government should be sovereign in its own sphere, with minimal duplication between the Commonwealth and the States. The Government for its part has insisted that it does not run schools or hospitals and that the States are ultimately responsible for them and what happens to them.

    This conception of the Australian Federation with its emphasis on States’ rights and separate roles and responsibilities is of course not new. Malcolm Fraser enunciated it before he became Prime Minister, and its supporters insist that it was what the framers of our Constitution intended.

    Furthermore, there is considerable intellectual attraction in separate roles and responsibilities for each sovereign government. It should enhance democratic accountability and help improve efficiency if the buck can no longer be passed backwards and forwards between the two levels of government. But why then has our Federation evolved in favour of greater national involvement in the provision of services that were originally the sole responsibilities of the States? The Commission of Audit seems to believe that centralism can and should be reversed, but I will argue below that there are good reasons why the national government has become more engaged in what were originally the prerogatives of the States.  Consequently, although there is probably some modest scope for redefining governments’ respective roles and responsibilities and reducing duplication, we will be best served by preserving the core features of our national system.

    In my view there are three key reasons for the pre-eminence of the national government. First, a fundamental reason why the States agreed to federate was to remove tariffs as a first step towards the creation of a national market. But now that we have a national market and indeed are facing global competition, businesses want common standards and licensing across a wide variety of fields; for example, everything from rail gauges, regulation of heavy road transport, company law and national competition, to food standards and the recognition of qualifications.

    Second, the responsibilities of government have grown. At the time of Federation pensions did not exist, but the Australian government now has constitutional responsibility for income support, including subsidising critical needs such as medical services, pharmaceuticals, and rental housing. Equally since World War II the Australian government has been expected to manage the macro-economy to ensure full employment and reasonable price stability.  Allied to this the Australian government also has responsibility for population policy, especially through migration, and for the growth in productivity and workforce participation which together determine the overall growth of the economy.

    However, these various national functions and responsibilities are not self contained. Today the various functions of government are heavily inter-related in a way that was much less true one hundred years ago, when we were all much less closely connected. For example, productivity is heavily dependent on the skills of the workforce, but these skills are in turn dependent on the quality of the education and training systems of the States. It is simply not possible for the Australian government to meet its responsibilities while being unconcerned about the effectiveness of various State government services.

    The third and final reason for national government pre-eminence is of course the national government’s domination of taxation, widely described as ‘vertical fiscal imbalance’ or VFI. Paul Keating called VFI the glue that holds our nation together, but for the States and the champions of States’ Rights, VFI is regularly trotted out as the root cause of centraliam. In the past the national government has passed payroll tax back to the States, and more recently they receive all the proceeds of the GST, but it seems unlikely that either of these taxes will ever be changed by so much as to make the States financially self-sufficient.

    In that case the removal of VFI would require that the States have access to the income tax. Legally there is nothing to stop them doing that now, but they have never taken up the opportunity, and indeed there are very important efficiency gains in only one government being responsible for administering any particular tax.  So the alternative is for the Australian government to raise the income tax and then to share the proceeds with the States. But why would sharing a tax result in clearer lines of responsibility than sharing responsibility for other functions of government which require expenditures? There would still be the same arguments about who should get how much and whether the States have adequate revenue. Alternatively if the States were allowed to add a surcharge to the Commonwealth tax, then there is the risk that the Commonwealth’s independent use of taxation policy for macro-economic policy would be compromised.

    In short it is not surprising that proposals to return to the past and increase State rights have got nowhere over a very long time. The truth is that a form of power sharing which we call ‘cooperative federalism’ is the only realistic way of managing inter-governmental relations. In Australia, for good or for ill, we have these two levels of government (plus local government), and power will inevitably need to be shared for a variety of functions where both have a legitimate interest. By contrast one cannot help being suspicious about the Commission of Audit proposals and whether their real intention is to provide a fig-leaf for the Commission’s smaller government agenda, with little or no concern for the impact on the availability and quality of publicly funded services.

    Instead a more productive discussion, than endless repetition of State’s Rights, would be to formulate better arrangements to guide the necessary future power sharing between the Australian Government and the States. To their credit that was what the Hawke, Keating and Rudd Governments were attempting to do with some success through COAG.

     

  • Michael Keating. Part 3. An Alternative and Better Budget Structure

    In two previous blogs I have argued that the Government’s Budget broadly got the economics right, but it failed the test of fairness and it attacks our traditional values. In that case, however, what would the alternative Budget structure look like?

    Fundamentally the Budget should have relied much more on taxation and less on expenditure cutting. As I have already shown it is low revenue that created our fiscal problem and not excessive expenditure.  However, increasing taxation will be easier if it can be shown that expenditure has been properly reviewed and screwed down tightly, and so I will first consider the opportunities for expenditure reduction using a different approach to the Government’s Budget and its Commission of Audit.

    Expenditure reduction choices

    There are three broad strategies for expenditure reduction:

    • Tightening eligibility for payments or services
    • More user pays
    • Improving the cost efficiency and effectiveness of services

    In my view the Budget relies too heavily on the first two strategies and not enough on the third. The difficulty is that the Hawke/Keating governments relied heavily on tighter targeting of welfare payments and increased use of user pays, and that cupboard is now bare or nearly bare.

    Indeed Australia now has by far the most efficient income support system in the world. Along with Denmark, Australia redistributes more than any other country to the poorest 20 per cent of the population, but because the Danish tax-transfer system is much less tightly targeted than ours, Denmark taxes and spends 80 per cent more relative to average household pre-tax income than Australia does to achieve the same amount of redistribution. It is ironic that further tightening in Australia now risks increasing the already very high effective marginal tax payments for those people receiving income support, but this is what is advocated by people who argue for greater targeting and then want to use the savings to further reduce the already much lower marginal tax rates for high income people.

    A similar situation applies for user charging. The present level of university fees supported by the delayed payment arrangements under HECS were carefully calibrated to ensure that there was not much impact on student enrolments. The overall rate of return on a university degree prior to this budget was sufficient to make it worth having. By comparison a recent study of universities across the US found that the life-time return on an Arts/Humanities degree from about  a third of the US universities was insufficient to justify the cost of studying. The students would have been better off if they had started working at age 18 and invested in Treasury Bills. In another instance the salary for a Science graduate teaching in a public high school in the US was similarly insufficient for him to repay his student loan from the bank several years after graduating.

    In the case of health, consumer co-payments already account for 12 per cent of the cost of medical services, 16 per cent of PBS medicines, 56 per cent for dental services, and 69 per cent for aids and appliances. Recent OECD data show that among the rich countries the only countries where consumer co-payments are higher are Switzerland and the US. So given our already high level of co-payments, it might be doubted that the further increases proposed by the Budget will achieve any reduction in unnecessary visits to the doctor; rather the risk is of Australia deteriorating towards a US style standard of access to health care.

    On the other hand, and notwithstanding the familiar bleating from the State Premiers, I consider that there are still opportunities for improving the cost effectiveness of publicly funded services, such as school education, health care, and infrastructure, and achieving significant savings. First, according to the latest available data, the real public funding per student in primary government schools increased by 31 per cent between 1999 and 2011, while there was a 20 per cent increase for government high schools. There is no evidence that this increase in funding (and the further increase since 2011) has led to improved student results. Instead the key objectives of the Gonski reforms should be capable of being realised by redeployment of funding within the education system. Indeed the priority should be to transfer funding from schools to vocational education and training (VET) which experienced a 25 per cent reduction in real funding per annual hour between 1999 and 2011, and has now had its funding further cut in this Budget. It is VET which gives people a second chance, often after the school system has failed them, and despite all the additional funds lavished on schools.

    Second, in the case of the health system there are huge differences between hospitals and even within hospitals in the cost of providing the same forms of care and treatment. The introduction of case-mix funding so that funding is based on the average efficient cost of each service is meant to enable hospitals to realise savings. Beyond hospitals more investment in prevention through better public health measures would help lower the costs in the long run, and new approaches to funding and coordinating the care of chronically ill people would improve their quality of life and help keep them out of hospital and lower costs. The Rudd Labor Government had started these types of reforms, but their future is now most uncertain.

    Third, Australia has a long history of over-investment in infrastructure with the costs exceeding the benefits, and under-charging the beneficiaries so that they demand more and more. It is therefore most reprehensible that this Budget prides itself that new spending decisions will add $58 billion to total infrastructure investment, when none of the projects announced have been ticked off by Infrastructure Australia as having completed proper cost-benefit appraisals; probably because a great deal of this investment never could pass any proper evaluation. And this from a Government that was properly critical of the former government and its approach to the NBN.  Clearly this improper use of the nation’s savings is not an acceptable reason for the other Budget cuts, and the increase in petrol excise should not be tied to an increase in uneconomic road funding.

    Clearly the opportunities for savings in major spending areas such as these should be pursued by the States before they all line up to increase the GST. But in the long run a sustainable fiscal strategy for Australia is bound to require an increase in taxation if we want to preserve those aspects of our society and social system that we value. The scope for increasing taxation is discussed in the next blog.

  • Jennifer Doggett. Budget 2014 – Primary Health Care

    While some commentators are calling this Budget ‘The end of universal health care’ others are seeing some opportunities to improve health system performance, in particular through better collaborations with state-funded health services and programs.

    The most high profile Budget measures in the primary health care sector are the introduction of new co-payments for bulk billed GP services and increased charges for related tests and medicines.  There will be caps for high level users and some support provided for people on low incomes but overall these changes will result in higher out-of-pocket costs for consumers.

    These payments have been widely criticised by consumer groups, health economists, service providers and other stakeholders.

    These criticisms have focused on the hardship the increased costs will cause to disadvantaged patients on low incomes as well as their impact on the quality and cost-effectiveness of primary health care.  Many experts have warned that there could be an increase in demand for (much more expensive) hospital emergency department services as consumers try to avoid the co-payment.  The Government’s answer to this is to allow the States, for the first time since the introduction of Medicare, to charge a payment for emergency department presentations. However, State Governments thus far appear reluctant to introduce these charges.

    Another concern about the impact of the co-payments is that it will undermine efforts to improve preventive health services and continuity of care for people with (or at risk of) chronic conditions.   This is partly because the payments will create a disincentive for consumers to access care early and also because of the likely shift of some patients to public hospitals. This will complicate already complex care pathways with an increase in the number of patients receiving care across the community/hospital interface.  It is also likely to result in care that is much less efficient, both from a ‘health system’ and consumer standpoint.

    In relation to Medicare Locals (MLs), the Government is responding to the findings of the Horvath Review which recommended consolidation of existing MLs into larger Primary Care Networks.  While the Review was broadly positive about the need for some coordination primary health care infrastructure bodies, the Government (in rhetoric at least) has moved to clearly differentiate itself from the previous Labor regime, describing MLs as “a new layer of primary health bureaucracy”. However, there is little substance about the roles and functions of the proposed new Networks and Dutton’s description of their aims “to join up patient care in the community to keep people out of hospital” appear very similar to those articulated by Labor when establishing MLs.  The key factors in determining the outcome of these changes will be if the focus on an evidence-based, population health approach to primary health care is retained.   In flagging an increased role for GPs, the Government is responding to pressure from the AMA which has been concerned about sharing control of the primary health care sector with other health professionals. However, the inclusion of GPs (which have always been integral to MLs) should not occur at the expense of input from other stakeholders, including consumers, allied health professionals, pharmacists, nurses and practice managers.

    Dutton also reiterated the Government’s interest in a greater involvement from private health insurance in primary health care saying “We will also be looking over the next few years at new and innovative ways in which we might fund and deliver primary health care, including through partnerships with private insurers.” Given the evidence that private health insurance pushes up costs for health care, without delivering improved outcomes, this proposal is not sensible policy even for a conservative government.  Its political attraction, however, is that it may offer further opportunities to shift health costs from the public to the private sector.

    Budget primary health care workforce measures included an increase in GP training places by 300, to a total of 1500, in 2015 and a doubling of the teaching payment to GPs for training medical students from $100 to $200 per three hour session.  There are also 175 infrastructure grants for GPs in rural and remote settings to build training facilities in their practices and an increase in the funding available for incentive payments under the GP Rural Incentives Program for GPs to work in rural and remote areas.  Also announced were 500 more scholarships for nursing and allied health workers (over three years).  These measures are welcome, however, the lack of any significant workforce reform within the health sector means that the inherent inefficiency of the workforce will persist and the potential benefits of new health professionals will not be realised.

    The challenge now facing the Government will be to get these measures through the Senate. With the Opposition, Greens and Palmer United parties all indicating their reluctance to pass the co-payment legislation, the Government may find that its agenda for primary health care is thwarted before it gets off the ground.

     

  • Fran Baum and Sara Javanparast. Demise of Medicare Locals.

    Demise of Medicare Locals: impact on community health, partnership and PHC research

    Fran Baum and Sara Javanparast  
    Southgate Institute for Health, Society and Equity, Flinders University, Adelaide

    Tuesday’s budget announced the abolition of the 61 Medicare Locals and that they will be replaced with an unknown but smaller number of Primary Health Networks. Regional primary health care organisations are widely acknowledged to be vital to effective   coordination of PHC activities, reducing service fragmentation, making the health system easier to navigate for users, and reducing health care cost. Primary Health Care Trusts in England, New Zealand Primary Health Care Organisations, Canada/Ontario Local Health Integration Networks, and Scotland Community Health Partnerships are examples of overseas regional PHC organisations which support GPs and other PHC providers and plan for population health initiatives. The World Health Organization  recommends that PHC should be comprehensive and not just concentrate on clinical issues but also emphasise population-based approach, including disease prevention and health promotion, equity of access, responsiveness to community needs and community engagement.

    In Australia, various models of PHC have been established including Medicare-funded General Practice, State-funded multi-disciplinary community health centres and Aboriginal community controlled services. In 2009, the National Health and Hospital Health Reform Commission recommended that ‘service coordination and population health planning priorities should be enhanced at the local level through the establishment of Primary Health Care Organisations’. This has resulted in the establishment of Medicare Locals to fulfil the role of co-ordinating PHC services at the local level, improving access and preventing hospital admissions.

    The establishment of MLs, introduced by the Gillard Labor government, commenced in July 2011, with a total of 61 MLs operational from July 2012. Since then, the MLs have been conducting community needs assessment, identifying and building partnership with key health, community and social organisations in their region, and developing population health plans that are based on and responsive to local needs. A range of local programs and services have been designed. These include mental health, after hours care plan, Aboriginal health, E-health, aged care, and migrant health. Many resources have been spent building positive relationship with key stakeholders and community members within each ML with some good examples of collaborative work, joint planning and community engagement strategies. Taking the Pulse program in a number of ML including the Gold Coast ML, ACT ML, and Metro North Brisbane ML enabled consultation about health and wellbeing with people from all walks of life. The priorities that emerged from these consultations have been used in the formulation of needs assessment and informed the development of their strategic plans to ensure they respond to local need. The Tasmania ML is addressing social connection and other social determinants of health using strategies including community capacity building. Our local research suggests the MLs are co-ordinating with local health authorities on issues of joint concern. They have begun to fill identify and fill service gaps.

    All these programs and initiatives have taken staff and local PHC health providers’ (including many GPs) time, and cost a lot of taxpayers’ money to develop and establish.  Now is the time when Australians should be able to capitalise on this investment and see better co-ordinated local health services, community alternatives to hospital services (which will save money), Aboriginal health programs, and local mental health programs. It takes time to establish the trust and connections needed to develop and co-ordinate PHC services and this social capital that the MLs have established will be squandered by the decision to abolish them in the budget. Of course, the ML model and its programs need to be scrutinised and evaluated, but its demolition while it is still in its infancy will have many negative impacts on the community’s health and represents a failure to capitalise on investment.

    The short term life of such large national initiatives also makes it difficult for primary health care researchers to produce rigorous evidence on the effectiveness of existing models and to evaluate the programs in terms of population health and cost benefits that need to be followed through for a longer period of time. “Lack of evidence on program effectiveness” is one the key justifications for budget cuts was evident in the Review of Medicare Locals by John Horvarth (http://www.health.gov.au/internet/main/publishing.nsf/Content/review-medicare-locals-final-report) . Such evidence can hardly be produced in the current rapid changing policy environment which makes rigorous evaluation impossible.

    Undoubtedly, replacement of MLs with Primary Health Networks that are more clinically focused will move our primary health care system away from its broader mandate of disease prevention, health promotion, equity and social determinants of health. Of course, communities particularly those most in need are the ones who will suffer the most from these continuing political battles and health system changes.

    We now face an uncertain period when the work of the existing ML is undone and new Primary Health Networks are established. The budget papers say this process will be open to tender and that the new organisations will be able to “partner with private health insurance” presumably opening the ways for the privatisation of the Networks and a further move away from equitable and efficient health care. We could see big providers such as BUPA winning tenders to run these PHNs!

    As a postscript we note that had the budget taken the fiscally responsible step and abolished the private health insurance subsidies this would have released around $5.5 billion dollars for investment in PHC services and the existing MLs which would have represented a far better investment in our health.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • John Menadue. Seven dollar GP co-payment – and an unintended consequence

    If the co-payment takes effect, it is likely to result in an increase in doctor’s fees. As Ian McAuley has pointed out, the attraction of bulk-billing for the doctor is that it removes the cost of handling and accounting for transactions. The invoice is sent directly to Medicare.

    Once the doctor is obliged to handle the $7 co-payment, another transaction occurs; either by cash or probably credit card. This inevitable patient/doctor money transaction will provide the doctor with an opportunity to charge above the bulk billing rate.

    As soon as doctors stop bulk-billing we can expect a rapid rise in doctor’s fees on top of the $7 co-payment. And the $7 co-payment may be just the beginning!

  • John Menadue. Health Co-payments and $7 for a GP visit!

    We do need to take action to curb our visits to the doctor. In 1984-85 we averaged about 7 Medicare services per head. By 2012-13 it had doubled to over 15 Medicare services per head. The increase was across all age groups and not just for the elderly. Bulk billing, fee for service, and the ability of doctors to generate demand for more and more visits, tests and referrals contributed to this dramatic doubling of Medicare services. It must be addressed for both fairness and efficiency reasons.

    The media seems convinced that the budget will include a co-payment of $7 to $8 for visits to GPs.

    If this fee is part of a general reform of co-payments as I set out in my blog of May 1 ‘The dog’s breakfast’ and reposted below, it should in principle be supported. But I suspect that it will not be part of a broader reform of co-payments that I suggested. I said that on its own, a $6 co-payment (or maybe $7 to $8) was a silly suggestion. On its own it would be inequitable and discourage many people from going to their GP.

    There is also no sign that the government is likely to address more glaring examples of budget problems which aid the rich, e.g. the superannuation concessions that Michael Pascoe, a business commentator on the SMH who has described these superannuation concessions as ‘on-shore tax havens for the rich’. The other benefits for the wealthy which will presumably not be altered include negative gearing, capital gains concessions, fossil fuel subsidies and the funding of rich private schools.

    I have also reposted below an article by Ian McAuley ‘Pay for a GP visit’.

    Repost: John Menadue. Health Co-payments. The dog’s breakfast will continue.

    There has been a lot of superficial comment following the thought bubble of a proposed $6 co-payment for GP visits.

    What we should be addressing is first, the chaotic nature of our co-payments and second, whether individuals and families should be making a greater direct contribution to their health expenses. The last Nielson Poll suggests that Australians are open to making a greater direct contribution.

    We already have a high level of co-payments in Australia. This has been pointed out repeatedly by Jennifer Doggett.  In this post I draw on the background which she has presented over several years .

    In Australia co-payments contribute over $A24 billion p.a. to our health sector. These co-payments are the third highest as a source of health funding – after Federal and State funding.

    This amount of $24 billion p.a. or 17% of our total health funding is high by world standards. Australians pay a higher proportion of their healthcare costs through co-payments than citizens of most other OECD countries. The Commonwealth Fund has found that when healthcare spending is adjusted for the cost of living in Australia, we pay more in direct co-payments than all other counties surveyed apart from Switzerland and the US. Our annual health co-payments per capital are about $US750 compared with Germany $US600, New Zealand $US330 and the UK $US 310.

    The problem with our co-payments is not that they are low. It is that this whole area of co-payments lacks any rhyme or reason. It is a dog’s breakfast.

    Consider how the percentage of total funding from consumer co-payments varies.

    • Public hospitals 2.5%
    • Private hospitals 11%
    • Medical services 12%
    • PBS medicines 16%
    • Dental services 56%
    • Aids and appliances 69%
    • Non-PBS medicines 92%

    In an unpublished paper Jennifer Doggett has pointed out that there is a wide variation in the impact of co-payments on people with different illnesses and disabilities. She says for example that people with conditions that can be largely treated by GPs or within the public hospital system, generally incur lower co-payments than those with conditions that require allied healthcare and over-the-counter medicines. This is the case independently of the length or severity of the illness/disability and its impact on both individuals and society. In fact, people with ongoing chronic conditions often end up receiving lower levels of subsidy for their healthcare than those with one-off or self-limiting conditions. Another result of this ad hoc and uncoordinated approach to co-payments is that some people receive almost all their healthcare free at the point of service, and others, with conditions which may be more serious or longer term, face crippling costs for their treatment. For example, someone receiving emergency surgery for, say, the removal of an appendix in a public hospital, can incur no out-of-pocket costs for their treatment, whereas someone with a long-term genetic condition such as Cystic Fibrosis can incur high ongoing costs. The result is a very inequitable allocation of healthcare resources which has a particularly negative impact on people with chronic conditions.

    The National Centre for Social and Economic Modelling has found that ‘more and more families are finding it difficult to stretch the family budget to meet the costs of healthcare’.

    This chaotic mess in co-payments is not surprising. Ian McAuley and I referred to this problem many years ago. In a paper by the Centre for Policy Development in 2007 we said ‘These co-payments have been introduced without any coherence and therefore inequities and perverse incentives abound. Some services such as public hospital services are free. Some such as pharmaceutical benefits are capped by the government. Some, such as the co-payment for medical services below the safety net thresholds are open-ended; the public subsidy is fixed, leaving the user to bear an open-ended risk. Some such as the medical safety net provisions are proportional to the price of the service. Some safety nets are set on a family basis, others on an individual basis. Some are on a calendar year basis and others on a financial year basis.

    In light of the chaotic nature of co-payments we need to restructure our co-payments.  How should these co-payments be restructured? Several years ago at CPD, Ian McAuley and I set out some criteria which should be adopted in the design of future co-payments. We suggested

    • That co-payments be controlled by the government rather than left open-ended to be set by service providers.
    • That there be only one channel of collecting co-payments, with one set of criteria rather than the separate channels operating at present.
    • That the level of co-payments relate to means, including people’s access to liquidity.
    • That means-tested compensation be separated from service delivery, rather than having service providers check the income or welfare status of users.
    • That co-payments be structured in a way not to distort resource allocation on the basis of needs.
    • That gap insurance, which is designed to evade co-payments, be prohibited.

    In summary,

    1. We already have high levels of co-payments.
    2. These co-payments lack rhyme or reason.
    3. Most Australians have much higher incomes than when Medicare was introduced. Subject to means-testing we should contribute more to our health costs. Co-payments, if well-structured, can help people make better choices with what economists call “price signals” They can provide also some relief to public budgets. A universal health service like Medicare does not have to be free. But it must be a high quality service available to all regardless of means.

    The $6 thought bubble on co-payments for visits to GPs must be considered in a much wider context.  On its own it is a silly suggestion.

  • Ian McAuley. Pay for a GP visit.

    The Commission of Audit’s proposal to charge a $5 or $6 fee for “bulk-billed” GP services has little to commend it. But that doesn’t justify knee-jerk outrage from medical and consumer groups, or from the Labor Opposition, for there is no reason why Medicare should not incorporate fixed and limited co-payments.

    As it stands the proposal is poor public policy. It bears resemblance to the ideas in a discussion paper prepared by the Australian Centre for Health Research in October, proposing a $6 charge in order to bring price discipline into service use, but which contradicted itself by suggesting those co-payments could be funded through private health insurance (PHI).

    There is no explanation of principles, no system-wide view, and no consideration of the costs of handling 140 million small transactions each year.

    It’s simply a proposal to save $750 million in Commonwealth outlays over four years. Why four years? Because that’s the “forward estimates” period. Why Medicare services and not all health expenditure? Because that’s the budgetary line item. Why only fiscal outlays and not total health care costs? Because fiscal considerations have taken over from economic considerations, and if the cost falls on state governments through a move to outpatient services, that’s none of the Commonwealth’s responsibility. We have a fiscal system, not a health care system, and a political imperative around the budget bottom line.

    If we had a completely free health care system, the indignation of lobby groups and the Opposition would be understandable, because it would indeed be a wedge into our system.  But we already pay 19 percent of our health care outlays from our own pockets (about the OECD average of 20 percent).  We may have the luck to find a “bulk billing” GP, but if we have to fill a pharmaceutical prescription scrip we have to pay up to $36.10, or $5.90 if we hold a concession card, and if the suggested medication is not on the Pharmaceutical Benefits Scheme, it’s whatever the pharmacist charges. If we cannot find a bulk-billing GP (only 81 percent of GP services are bulk-billed, and they would be disproportionately for card holders), then we are paying on average $29 from our own pockets.

    We don’t know the rationale behind the proposal – this Government is not given to policy openness – but it’s probably driven by the tremendous growth in use of medical services over the years. In 1984-85 we used about 7 Medicare services per head, in 2002-03 we used 11, and in 2012-13 we used 15. Ageing explains some of this, but there has been growth in utilization across all age groups. While half the population uses 7 or fewer services a year, 10 percent of the population uses 31 or more services – more than one a fortnight – accounting for 44 percent of services.  (These figures relate to 2007-08, so they would understate the skew to heavy users. The Department no longer publishes this data.)

    Penny Wong portrayed the proposal as a disaster of Thatcheresque proportions, claiming that a $6 fee would be a barrier to access, ignoring the barriers imposed by long waits at bulk-bill clinics (many people would be spending more than $6 in parking fees), and the closed books at GP surgeries whose capacity has been absorbed by heavy users.

    Oppositions criticize – that’s their job. But they shouldn’t close off avenues for possible reform.  An opposition with a little nous could complain about the process issues mentioned above.  “Yes, we have a problem, and we need some rationalization of co-payments, but this is an inept and counterproductive way to go about it ……”.

    The political reaction is similar to what happened in 1991, when the Hawke Government proposed fixed co-payments.  The squeals from groups supposedly on the “left” forced the Government to a hasty retreat.  “Medicare” became implanted in the political and public mind as a “free” primary care service.  (Earlier, in 1987, the Coalition had abandoned their plans for people to spend $250 before receiving Medicare support, because of similar protests.)  In 1991 the most common protest was that Medicare would become a “safety net” rather than a universal free service.

    The gaping flaw in that protest is that we have never had a universal free health care service.

    In those campaigns of last century the “left” exhausted its political energy defending free Medicare services.  But what has developed, a resurgence of private health insurance (PHI), is far worse by any reasonable criteria of equity or allocative efficiency.  As for the protests about a safety net, a safety net would be far better than our inconsistent arrangements which leave people, particularly those with chronic illnesses, bearing open-ended liability for uncapped expenses.

    There are three ways to fund health care – direct consumer payments, a single national insurer, and competing private insurers. Two of these mechanisms, one a market mechanism, one a countervailing power mechanism, can keep health care costs in check and assure there is universal access to affordable services. The third mechanism, private health insurance, fails to achieve these outcomes and leads to price inflation and inequity. Its elimination should be the focus of consumer and Opposition energies.

    Why should any consumer group or a party aspiring to government rule out one of the two mechanisms that actually have a chance of working?

    Ian McAuley is a researcher and teacher in the fields of public sector management and public policy.

    For other posts on this subject, see ‘health’ category on right side of home page.

     

  • John Menadue. Taxes – public or private

    The Commission of Audit has recommended that a Medicare levy surcharge be applied to individuals earning more than $88,000 a year and $176,000 for families. This is designed to force high income earners to take out private health insurance. This is one of the most economically stupid and dangerous proposals that I have seen for a long time. The Commission of Audit foolishly thinks that this would reduce public taxes, but it would result in increased private taxes (premiums). Higher premiums are the inevitable result of increased reliance on private health insurance. This is what has brought disaster for healthcare in the US. Private healthcare premiums have gone through the roof and the US now has one of the worst and most expensive healthcare services in the world. 

    Furthermore, the Commission of Audit’s proposal would move us a long way towards a two-tier health system, with a high quality and very expensive healthcare service for the rich and a welfare type health service for the poor. It strikes at the heart of social solidarity and social cohesion which is essential in a good society. It would end Medicare as we know it, a high quality service available to all regardless of income.

    Below I have reposted an article of 1 February about the fallacy of assuming that public taxes are bad but private taxes (premiums) are good.

     

    It has become commonplace for opponents of government and the public sector to suggest that functions like health care and broadcasting should be moved from the public sector to the private sector in order to reduce taxes. They usually add in that the private sector is also much more efficient in performing such functions.

    There are good social and economic reasons why certain functions should remain in the public sector – defence, education and health. But there is also a great fallacy that somehow public taxes are bad and private taxes/premiums are fine.

    Let me give you two examples.

    The private health insurance industry claims that Medicare is unsustainable and that more people should take up private health insurance to reduce the demands on the public health system. The suggestion is that by doing so, governments will not have to keep increasing taxes to fund public health. But there is a fundamental error in this argument. Private health insurance (PHI) has been raising its premiums at an alarming rate and much faster than Medicare through taxation. The PHI premiums are really the same as taxes that finance Medicare, except that one is public and the other is private.

    Since 1999, when rebates for PHI were introduced, the average PHI premium (private tax) has increased 130% whilst overall prices have increased by less than 50%. These private taxes or premiums are rising dramatically for a whole range of reasons that I set out in my blog of December 26 – ‘Health insurance – here we go again’.

    The other important reason for these high private taxes/premiums by PHI is that their administrative costs, including profits, run at about 15% to 16% of total costs. For Medicare, including the cost of tax collection, administrative costs are about 6% of total costs. So with the administrative costs of PHI about three times those of Medicare it is not unreasonable to conclude that the public gets far better value for money in its taxes paid to finance Medicare than paying premiums/private taxes to PHI. Expanding the role of PHI would greatly increase the level of these private taxes. The fact that they are private taxes misses the point. They are taxes on the consumer just the same as public taxes.

    The experience of the US should also warn us about private health insurance premiums/taxes. In the US, healthcare expenditure is over 18% of GDP. It is the highest in the world. In Australia it is about 9% to 10% of GDP, as is the case for most comparable countries that have a single public insurer like Medicare. Of the 18% costs in the US( as a proportion of GDP), about 9% is due to private insurance. Private health insurance in the US has been unable to control price demands by private doctors and private hospitals. If in theory the US had a single public insurer and followed the example of other single public insurer countries like Australia, the US could reduce its health expenditure by 9% of GDP. In such a situation the 9% of GDP paid to private health insurance funds would be unnecessary. If those premiums to private insurance were then redirected into public revenue, the US budget deficit of 7% of GDP would be eliminated. I said this was theoretical and there are clearly enormous political difficulties for President Obama to wind back the mess that private health insurance has wrought. But the figures do illustrate that the US would be better off with a robust public insurer funded by taxes rather than by the grossly unfair and inefficient privatised taxes that private health insurance imposes on the community. The US experience shows quite conclusively that shifting insurance out of the government and into private health insurance would be a disaster for everyone. To finance health care through the private taxes or premiums of PHI would result in much higher imposts on the public, than paying for health care through public taxes.

    The other example of privatised taxes is illustrated in the case that is often made against the ABC and other public broadcasters that are funded by taxes or special licence fees. Yet the critics of public broadcasting like Murdoch impose their own taxes – what is in effect a sales tax on products that are advertised in the commercial media. In my blog of December 19 ‘Murdoch and Abbott and the ABC’, I drew attention to the argument by Ian McAuley about the high cost of these privatised taxes. He said ‘We are paying about $1,500 per year per household for advertising, of which $500 is for commercial TV and radio… By contrast we are paying about $120 per year for the ABC’. Commercial media collects “taxes”, but it is called ‘advertising revenue’. This revenue is a cost to the advertiser and is loaded into the costs of the products when we purchase a car or holiday travel.

    The private sector has its own forms of taxation. Just by shifting functions from the public to the private sector, does not necessarily reduce what we have to pay out of our own pockets. In many cases public taxes are much more efficient and serve a much more desirable social objective than privatized taxes

  • John Menadue. Do our governments spend too much or do they raise too little in taxation?

    This a repost and provides a summary of the submission that Ian McAuley, Jennifer Doggett and I made to the Commission of Audit.  John Menadue

    The Minister for Health, Peter Dutton, has said that we must reduce waste and cut costs in health. (I responded to this in my blog on 3 February “Cutting waste and costs in health”).

    The Minister for Social Services, Kevin Andrews, has said that our welfare system is ‘not sustainable’ and that we are headed down the high cost welfare path of European countries. (The ABC examined this assertion and found that it was incorrect. It found that ‘There is nothing to indicate that as the population ages, Australia is headed towards the big welfare spending of some European countries. Treasury projections to 2050 show welfare spending as a proportion of our GDP will remain steady over the next three decades. www.abc.net.au/news/2014-02-03/kevin-andrews–makes-unfounded-welfare-claims.)

    The Treasurer, Joe Hockey has said that ‘The days of entitlement are over and the age of personal responsibility has begun’. This has been interpreted by some as suggesting that government welfare and other entitlements should be reduced.

    In a submission to the Senate Select Committee into the Abbott Government’s Commission of Audit, Jennifer Doggett, Ian McAuley and I contend that the problem is not that government expenditures or that the public sector is large in Australia compared with other countries. We contend that the problem is a short-fall of revenue and that on international comparison, our tax revenues are low.

    In our summary to the Committee we say …

    The Commission of Audit’s brief is based on assumptions that Australia is burdened with “big government” and that taxes are an impediment to business investment and workforce participation.

    There is no evidence for either assumption. The trend in Commonwealth expenditure has been downwards since the mid 1980s, falling from a peak of around 28 percent of GDP to a range of 24 to 26 percent of GDP in recent years. In comparison with similar prosperous countries Australia has one of the smallest public sectors.

    The problem a body such as the Commission should address is our inadequate tax base, which is the main reason the Commonwealth has had a structural deficit for most of this century. We aren’t collecting enough revenue to fund the public services needed if the economy is to thrive.

    We should not shy away from raising taxes. Evidence from international comparisons and from surveys on competitiveness suggests that reasonable levels of tax do not impede countries’ economic performance. In fact, countries which compete on the basis of low taxes do so to compensate for competitive weaknesses, such as inadequate infrastructure and poor standards of education – in other words impoverished public sectors.

    Such evidence, however, seems hard to convey to those gripped by a zeal to cut spending and taxes. Even in a “small government”/low-tax country like Australia it is possible to find areas where private funding and provision of services can displace public funding and provision.

    But such displacement is usually at high economic cost, simply to achieve an arbitrary fiscal objective. There is no point in reducing taxes if the private costs are greater than the saving in taxes, with no improvement (and in many cases a deterioration) in the services provided. We illustrate this in the case of health care funding. This is an area of significant public outlay and where, because of ongoing growth in demand, there are voices – often the voices of self-interest – calling for a shift from public to private insurance. Such a shift would be costly on all economic criteria – technical efficiency, allocative efficiency and equity.

    The rushed and secretive processes of the Commission are not the path to good public policy. There may be areas where a change in the public/private mix is justified on economic grounds, but these are not one-way towards the private sector as implied in the Commission’s brief. Because we already have a small public sector it is likely that a proper process, with research and consultation, would find a need for a net expansion of Australia’s public sector. By shutting off that possibility those who drafted the Commission’s brief are imposing a constraint which may be contrary to the community’s wishes and sound economics.

    The full submission to the Senate Select Committee can be found by going to my website. Click on ‘John Menadue Web Site’ top left of this blog page.

  • This is about more than a bottle of wine

    To mix my metaphors, the bottle of red wine that Barry O’Farrell received is only the tip of an iceberg – a sleezy world of lobbying, influence-peddling and corruption.

    (more…)

  • John Menadue. Citizenship and shared experience.

    The recent decision by the NSW Government to evict pensioners and low-income tenants from the Rocks in Sydney highlighted for me the importance of mixed communities and shared experiences.

    We all benefit in society when we have shared experiences. We can then get to know other people’s aspirations and their problems. We invariably find that we have much more in common than we think. We benefit both as individuals and as a society.

    Why should only one part of society, the wealthy, enjoy harbour views? Why should a mixed community that has lived for so long in one area be destroyed with low-income tenants forced out whilst the wealthy join other wealthy to enjoy harbour views and the attractive lifestyle that goes with the Rocks.

    In shared experiences we are drawn in two ways. One inclination is to live in pleasant and attractive areas that are often composed of people like ourselves with the same incomes and even the same ethnic backgrounds. But we also know that we benefit from shared experiences with people who are different. Our most important shared and common experiences are in times of natural disaster – bushfires and floods which tear away social class. We are in the emergency together and we find great satisfaction in banding together. Many older Australians recall the common hardship of the Depression, the War and rationing. For Britishers, the bombings and air raid shelters brought people to a ‘common experience’. Despite the hardships and the danger, there was satisfaction in those common experiences. The fabric of society and trust in each other was strengthened.

    As Ian McAuley in ‘Dissent’, November 2012, has pointed out, the British sociologist Thomas Humphrey Marshall wrote in 1949 about ‘common experience’ as an essential ingredient for good citizenship. This common experience is a richer notion than social inclusion. Unfortunately social exclusion by the wealthy is becoming as serious a problem as social exclusion of the poor.

    It is not just the Sydney Rocks that is being pulled apart. Our health and education institutions discourage the mixing of social groups and denying common experience.

    Ian McAuley points out that government subsidies to private health insurance discourages the well-off in the use of public hospitals. Because PHI, particularly for people on the high tables, is used almost entirely to fund treatment in private hospitals, government policy subsidises a form of social exclusion and discourages common experience. It also encourages many articulate people to opt out of support for public hospitals knowing that when they need hospitalisation, they can turn to private hospitals.

    The trend in the denial of common experience is even more obvious in education. In the 1950s, 75% of Australian children attended public schools. Most of the other 25% went to Catholic schools which had a similar social, if not religious, mix as public schools. Now only 65% of students attend public schools. This trend is even more pronounced in secondary schools where just over 60% of secondary school students are in public schools. This proportion is even lower in early grades of secondary school. And this trend away from common experience in public schools is accelerating despite the fact that there is no evidence that private education secures better outcomes. It will take many decades of Gonski to reverse the unfortunate and divisive trends that are occurring. Common experience in schools is being eroded.

    As more and more middle class and articulate parents opt out of public education, a tipping point will arise where it will be hard to ensure public support for public schools. That tipping point is approaching

    Just as the government subsidies to PHI has driven social exclusion in hospital use, so in education government funding is being skewed in favour of the privileged in private schools. The concept of common experience is being steadily eroded.

    We are also seeing this denial of common experience in our built environment. In my blog of November 28, 2013 “there goes the neighbourhood” I drew attention to the way that some communities are being sundered by the wealthy excluding themselves from common experience. They have private pools within minutes of superb public beaches, private entertainment systems, high walls,roller doors and CCT to keep themselves from a common experience with neighbours. Even when public transport is reasonably available, children get driven to school in private cars.

    It is claimed that these developments in our health and educational institutions and in our built environment is justified on the grounds of choice. But choice is often a one-way street available only to those with high incomes. What choice do the low income tenants in the Rocks have about where they are going to live?

    We all know that common experience in national disasters and volunteering brings a sense of togetherness, community and shared humanity. We must nurture institutions that promote sharing and common experience. The most critical is shared experience in schools and education.

    We need institutions and a built environment that cut through social class. That is the path to shared experiences.

    The more we turn our back on common experiences the more our citizenship and society is impoverished.

  • John Dwyer. Primary healthcare in Australia reaches the crossroads.

     When I graduated some 50 years ago more than 50% of my class pursued careers as General Practitioners. In the last available survey of the career intentions of graduating medical students only 13% said they were interested in Primary Care and only 13% of those who would consider a career in rural Australia. Currently more than 45% of the General Practitioners available to rural based Australians are overseas trained doctors most of whom are working there as provider numbers were not available for metropolitan practice. The average age of working General Practitioners is 55 years.

    Young doctors considering vocational training cite positive and negative reasons for their disinterest in Primary Care. Many other career opportunities seem more attractive as they provide much higher average incomes and part time employment provides funds sufficient for many. General Practice training is equally as vigorous as that required for other specialities but “GPs” are not paid as specialists and often feel their vital and increasingly unique skills are underappreciated. Tales from GP land tell young graduates of practice subjected to stifling bureaucracy, the need to “bulk bill” and thus to practice “turnstile medicine” with short consultation times being unsatisfactory to both patient and physician. These and many other impediments place us in real danger of having far too few GPs to provide us with quality Primary Care in the near future.

    All this reality is addressed by rhetoric from government reassuring GPs that they are the “heart and soul” of the nation’s health care system. The fact that the Federal government is freezing cost of living adjustments to Medicare rebates for four years and considering strategies to reduce our 18 billion dollar annual Medicare expenditure should not be taken personally. As I have commented here previously, we should be spending more not less on Primary Care but Primary Care that is restructured to better meet contemporary needs. This would include reducing the seven million bed days utilised in public hospitals by avoidable admissions. Hospital expenditure dwarfs Medicare spending.

    Is it possible that the introduction of a new model of Primary Care could produce better, more cost effective health outcomes for Australians and at the same time attract a new generation of doctors to Primary Care? International experience would say the answer to both questions is a definite yes. We know what that new model should provide; infrastructure to support preventative strategies, early diagnosis of problems that, left untreated, could become chronic, team management of established chronic and complex diseases and care in the community for many who are currently being sent to hospital. The model described is usually referred to as “Integrated Primary Care”  (IPC) which, to use American parlance, provides individuals with a “Medical Home”.

    IPC is structured around teams of health professionals working in the one practice. It is not doctor centric and provides individuals who enrolled in the IPC program with access to doctors, nurses and a range of allied health professionals including dental hygienists. Doctors cannot provide all the services described above but here can concentrate on those things only doctors can do. Well run IPC programs in the UK, the US, New Zealand and many other countries have demonstrated their cost effectiveness, better health outcomes and fewer admissions to hospitals for the patients of such medical homes. Perhaps most importantly in our context, they attract and hold GPs who enjoy better job satisfaction in this form of practice. An international trend has IPC practices offering their doctors flexible arrangements for remuneration. Rapidly payments based on a “fee for service” (FFS) are giving way to “blended payment” options. What is this all about?

    Many Australian GPs want to move away from the FFS model with very significant numbers joining large corporation owned practices where they are salaried or paid on contract. FFS at bulk billing rates does not work well for patients with chronic diseases and complex needs. A number of countries are offering their GPs fixed annual payments for their care of complex patients while those seeking a “one off” service are still charged a fee. In New Zealand more than 85% of the GPs work in such a system with about 80% of their income fixed with the remaining 20% coming from traditional FFS payments. Such arrangements are in the medical news here in Australia as Minister Dutton has publically expressed cautious interest in seeing how this could work in Oz. In the US 60%of GPs are paid in this way and this is increasingly so in the UK. There is an abundance of data showing that blended payments within the IPC model produces better health outcomes with fewer hospital admissions.

    Overseas experience with this radical reform tells us that its implementation must be a “bottom up” one available to willing participants and never forced on the medical profession. Space doesn’t permit detailed discussion of the mechanisms involved in establishing this system but if we were to follow say the NZ model it would look something like this. Our Medical Locals would become Primary Health Care organisations and holders and distributors of a primary care budget provided after careful analysis of local needs. GPs or IPC practices would negotiate for a fixed payment for their care of their patients with chronic diseases and in return would provide quality/outcome data associated with the use of that money. Financial incentives are built into the contract to encourage “best practice” management.

    Our medical profession, government and citizenry, should not be concerned by the exploration of these changes. The evidence is strong that, done properly, the results are very positive and the model attractive to clinicians and patients alike.

    John Dwyer is the Emeritus Professor of Medicine at the University of NSW.

  • Ian McAuley, Jennifer Doggett and John Menadue. The case for government funding of healthcare.

    In our joint submission to the Senate Inquiry into the Abbott Government’s Commission of Audit, we drew attention to the fact that by international comparison, Australia is a low-taxed country. Furthermore, the trend in Commonwealth expenditures has been downwards since the mid-1980s. Our full submission can be found on my website (click above).

    In that submission we made the case for government funding of healthcare as a superior option. Extracts from this submission on healthcare follow.

    The flaw in the “unaffordable” argument (made by the Abbott Government in respect of health care) is that even if the government withdraws from funding, we still have to pay for health care, and all the evidence from other countries’ experience shows that if the government abandons responsibility for funding health care, we will end up spending a greater amount for the same or a lower quality of care.

    In all probability Australians want to share the bulk of our health costs with one another. Across all OECD countries people pay only about 20 percent of health costs from their own pockets – that is through payments at time of service delivery and in amounts not covered by insurance. In Australia, at 19 percent, we are just below that average. In developed countries most health care costs are paid through insurance – either a government insurer or competing private insurers.

    Even if, as is likely, we accept a need to pay more from our own pockets, we will continue to seek insurance cover for large outlays. We may be willing to take our chances in many aspects of life, but when it comes to health care we have little to guide us about our future needs.

    Policies which shift funding responsibility from government programs, such as Australia’s Medicare, on to private health insurance (PHI) have a short-term attraction to a government concerned with containing fiscal outlays. But even the best designed policies to entice or force people into PHI are costly and inequitable.

    For a start PHI involves high administrative costs. In Australia only 84 cents in every dollar paid to PHI is returned in terms of payment for services. The rest goes to administrative costs and corporate profits. By contrast, Medicare has administrative costs of about 5 percent, and another 1 percent in Tax Office collection costs. That means that Medicare returns 94 cents in the dollar as health services – a ten cent difference in comparison with PHI.35 The USA, highly dependent on PHI, provides the standout example of administrative overheads. Only 69 cents in every dollar Americans spend on health care comes back in terms of services.36

    Second, and more important, when there are competing private health insurers they have little ability to control the prices demanded by service providers. If one insurer tries to bargain hard with hospitals to keep prices down, the hospitals will simply choose to do business with another insurer. The insurers have about the same power in the market as consumers do when they are dealing with powerful oligopolies such as banks. By contrast a single national insurer, usually a government agency, has the market power to put some discipline into prices and utilization.

    Evidence from international experience bears out these points. When countries rely on PHI to fund health care they pay more for it, without necessarily getting any better health outcomes. To quote at length from the OECD:

    Private health insurance markets have resulted in increased overall health costs in several OECD countries. First, by bringing more financial resources into the health care system, it raises total health expenditure. Second, cost-control measures – such as global budgets, price regulation and capacity controls – have been applied to the public sector in virtually all OECD countries. Conversely, the private financing sector in virtually all OECD countries, except the Netherlands, has not been subject to such centralised, governmental cost controls. This has resulted in less tight control over activities and prices in the private sector. Third, private insurers in most OECD countries do not have the same bargaining powers over the price and quantity of care provided to insurees as public systems do, although within concentrated PHI markets insurers can exert stronger pressure, as in the case of Ireland. Payment options such as global budgets that have helped public systems to contain costs in several countries are hard for private insurers to negotiate – or may not be options at all. PHI carriers have generally exerted little leverage over costs – as they might if they engaged in more selective contracting.

    In the United States, private insurance has been less effective than the public Medicare programme in controlling costs. Growth in per enrolee payments for a comparable set of services in private health insurance outweighed Medicare over the period 1970-2000, reflecting the higher payment rates to providers paid by private insurers. While “managed care” delivered some cost control in the 1990s, PHI premiums have resumed double-digit growth since 2001.

    Cost control is also more problematic to achieve in systems with multiple competing payers, including most PHI markets. Not only their purchasing position relative to providers is weaker, but also shifting cost onto other purchasers, whether public systems or other private insurers, is a more attractive strategy for insurers than restraining cost.

    PHI also risks increasing public expenditure on health. This is because, while PHI may serve as an independent source of health funding, its effects are rarely entirely disconnected from the publicly funded system.

    Subsidies to private health cover, as in Ireland, Australia and the United States, increase public sector expenditure and have an opportunity cost, sometimes increasing overall utilisation levels as well. Even in the absence of direct or indirect subsidies, PHI has given rise to higher public cost in several countries with a significant PHI market because of the way it interacts with the public system.37

    This is borne out empirically by data from the OECD….. The message is clear: the more governments rely on PHI to fund health care the more is the total cost of health care….

    As with administrative costs, the stand-out case is the USA, where health care costs are now almost 18 percent of GDP. (Even when the USA is excluded there is a positive relationship, and it is too big to be considered a statistical aberration.) As a consequence of America’s longstanding dependence on PHI – a dependence which could intensify with Obamacare – its government programs, Medicare and Medicaid, now cost around 8.5 percent of GDP. This is more than the governments of Sweden, Norway and Iceland pay for their comprehensive public insurance programs, and more than the governments of UK and Canada pay for their near-universal public programs.

    In an attempt to avoid universal public funding, the USA has developed a system which now incurs higher fiscal costs than they would have incurred had they pursued a single insurer option. That is because the government Medicare and Medicaid programs have become passive price-takers in a market where prices are set by powerful service providers. Even here in Australia, because of the generous way we subsidize PHI, those subsidies are costing more than they are saving government outlays. Reducing subsidies for PHI would result in some reduction in membership and therefore more government expenditure on health care, but there would be significant net public savings.38 The Grattan Institute, for example, estimates that even with offsetting compensation to public hospitals removing the PHI rebate could save public budgets $3.5 billion a year.39 …

    Simply ending subsidies for PHI is only part of necessary funding reform. The whole way health care is funded needs to be reviewed – a task well beyond a body such as the Commission of Audit. As a case in point, there needs to be rationalization of co-payments, so that they can serve to bring the benefits of market discipline into health care, rather than encouraging patients to seek “free” services to avoid co-payments. Our present division between “free” services, covered by Medicare or PHI, and paid service, is haphazard.40 Examples abound: public hospitals are “free” while pharmaceuticals incur co-payments; it can be cheaper for a consumer to leave tooth decay until it needs treatment in hospital than to seek paid preventative dental care early on; PHI and Medicare often cap the number of paid services in areas such as physiotherapy, leaving the patient with open-ended risk. Besides savings from scrapping the PHI rebate, the Grattan Institute estimates there are additional savings of around $6 billion a year to be found without comprising the quality of care.41

    The national insurer, of course, needs to use its purchasing power to contain costs. In this regard the Commonwealth, once highly effective in negotiating low pharmaceutical prices, as a result of a series of concessions to pharmaceutical firms is now paying more than many other countries for pharmaceuticals. Government purchasing and price negotiation are areas with potential savings.

    Replacing PHI with a strong, single national insurer removes incentives for over-servicing and over-pricing, but there are savings in private and public costs if there is less need for health care in the first place, through investing in preventive services.42 Preventive health measures, such as anti-smoking initiatives, deliver high returns, in terms of long-term health outcomes. However, Australia currently allocates less than two percent of the total health budget to preventive health.43 Investing in early childhood health and education is also a proven and cost-effective strategy to prevent the development of a range of lifelong social and health problems, but Australia also falls short in this area:  almost one-quarter of children are developmentally vulnerable at school entry with Aboriginal and Torres Strait Islander children and children in socioeconomic disadvantaged areas most likely to fare worse across a broad range of health and social indicators.44 Failure to fund preventive, public health and early childhood programs adequately represents a wasted opportunity to direct resources to achieve maximum benefit. These are functions which, if abandoned by government, will not be performed by the private sector.

    (Our basic case is that by shifting health expenditures from the public to the private sector will cost more. It will increase total costs)

     


    35.          Figures taken from John Menadue and Ian McAuley Private Health Insurance: High in cost and low in equity. Centre for Policy Development 2012.

    36.          Henry Minzberg “Managing the myths of health care” World Hospitals and Health Services Vol 48 # 3, 2012.

    37.          Francesca Colombo and Nicole Tapay “Private health insurance in OECD countries: the benefits and costs for Individuals and health systems” OECD Health Working Papers No. 15, 2006.

    38.          Terence Cheng Does reducing rebates for private health insurance generate cost savings  Institute of Applied Economic and Social Research, The University of Melbourne, July 2013.

    39.          John Daley Balancing Budgets: Tough choices we need Grattan Institute 2013.

    40.          See, for example Jennifer Doggett “Out of Pocket: rethinking health copayments” Centre for Policy Development Occasional Paper 2009.

    41.          John Daley, Grattan Institute op. cit.

    42.          World Health Organisation. Key components of a well-functioning health system. May 2010.

    43.          Australian Institute of Health and Welfare Health Expenditure Australia 2011-2012.

    44.          Australian Institute of Health and Welfare A picture of Australia’s Children 2012.

  • Martin Laverty. Poverty and poor health go together.

    In 2008, the World Health Organisation provided an action plan to Australia and other countries to tackle the health disparity between rich and poor which sees an Australian in the lowest group of wealth-holders live with up to three times the amount of chronic illness of a person in the highest wealth-holding group.

    One year ago last week, Catholic Health Australia and the members of the Social Determinants of Health Alliance applauded a co-authored report of a Coalition, Labor and Greens Senate Inquiry that recommended the Parliament endorse the 2008 World Health Organisation’s recommendations on how to address health equity – that we had argued must be the first important step towards meaningful action on social determinants.

    But last week, on the one-year anniversary of the release of this rare tri-partisan report, there was nothing to celebrate. There was nothing to welcome. There was just a moment to bemoan the fact that yet another year had passed since the Senate Inquiry reported and the Federal Parliament has not pushed ahead with the Inquiry’s recommendations or any plan to address unacceptable disparities in the health of Australians.

    Reports seem to emerge every couple of weeks pointing to those unacceptable variances based on people’s socioeconomic status or their ethnicity or where they live or their education level. These reports – like last year’s Senate report – are not prompting action from federal politicians.

    While we have been advocating for change at the political level and in the public domain, CHA has also been presenting compelling evidence as to why action on the social determinants is crucial. One of those contributions is The Cost of Inaction on the Social Determinants of Health; a report commissioned by CHA and prepared by the National Centre for Social and Economic Modelling (NATSEM).

    That report found that $2.3 billion in savings could be found annually through avoidable hospital admissions if Australian Governments were to implement the findings of the World Health Organisation’s Closing the Gap in a Generation report. Those are the same recommendations that the Senate Committee said the Parliament should endorse.

    The NATSEM report also found implementing the WHO recommendations could see:

    • 500,000 Australians avoid suffering a chronic illness;
    • 170,000 extra Australians enter the workforce, generating $8 billion in extra earnings;
    • $4 billion in welfare support payments saved each year;
    • 5.5 million fewer Medicare services utilised each year, resulting in annual savings of $273 million;
    • 5.3 million fewer Pharmaceutical Benefit Scheme scripts being filled each year, resulting in annual savings of $184.5 million.

    These staggering opportunities are what new approaches to health policy could achieve, yet counter-intuitively they do not require change to the way our health system operates.

     

    The opportunity to reduce chronic illness and save on hospital and pharmaceutical expenditure requires action outside of the formal health system. Doing so would improve the lives of half a million Australians. It would also help the Federal Government achieve savings it is very keen to find.

     

    Australia suffers the effects of a major differential in the prevalence of long-term health conditions. Those who are most socio-economically disadvantaged are twice as likely to have a long-term health condition as those who are the least disadvantaged.

     

    Put another way, the poorest are twice as likely to suffer chronic illness and will die on average three years earlier than the most affluent. Poor health of low-income Australians can be avoided, allowing Government to spend less money on treating health conditions that should never have occurred in the first place.

    Drug-, alcohol-, tobacco- and crisis-free pregnancies are understood to be fundamental to a child’s lifelong development. So, too, is early learning that occurs in a child’s first three years of life.

     

    School completion, successful transition to work, secure housing and access to resources necessary for effective social interaction are all determinants of a person’s lifelong health. These are factors mostly dealt with outside of the health system, yet they are so important to the health of the nation.

    We can’t afford – in dollar terms, but more importantly in human terms – for this to be a political can that is kicked down the road. Action on social determinants will save lives, and deliver both government and community an extraordinary financial and social surplus.

    A resolution passed in the House of Representatives in 2010 compelled the sitting Government to respond to a Senate committee’s report with six months.

    Labor can point to the federal election – held within six months of the report being tabled – and the Coalition can point to the fact the report was tabled during the last Parliament, but we are becoming increasingly impatient with politicians who aren’t addressing the causes of poor health.

    Isn’t 12 months of increasing inequity more than enough? It’s time for action.

    Martin Laverty is the CEO of Catholic Health Australia. CHA represents the largest single grouping of non-government health, aged and community care services in Australia.

  • John Menadue. Privatising Medibank Pte – who cares?

     

    This is a repost from 28 November 2013. My own view is that all the private health insurance companies, including Medibank Pte are parasitical and undermine Medicare. The only important political issue in my mind is whether the policy holders who have contributed over decades to Medibank Pte should receive appropriate recompense rather than the government taking the money for itself.  John Menadue

    I won’t lose any sleep if the Abbott Government proceeds to privatise Medibank Pte. It is anticipated that the sale could realise $4 billion. That will go almost half way towards the $8.8 billion that Treasurer Joe Hockey is providing as a reserve fund for the Reserve Bank, even if the Bank didn’t ask for it.

    Whether all of that $4 billion should go to the Treasury from the sale of Medibank Pte is a moot point. Don’t the policy-holders, some with as many as 37 years membership, have an entitlement to some of that accumulated value? I declare a personal interest as I became a contributor to Medibank Pte when it was established by the Fraser Government in 1976.

    Medibank Pte was established then because of the Fraser Government’s hope that it could be an alternative to the universal health insurance scheme which the Whitlam Government introduced and which later became known as Medicare under the Hawke Government.

    I am quite indifferent to whether Medibank Pte is publicly or privately owned. As Ian McAuley and I set out in an article for the Centre for Policy Development in January 2012, private health insurance is ‘high in cost and low in equity’.  See this article on my web by clicking on ‘website’ at top left hand of home page, then ‘health’ and then article of January 2012.

    Whilst Medibank Pte. Is publicly owned, it acts just like all the other health insurance firms that are privately owned.  I t serves no special social role. It is the largest health insurance fund out of the total of 40 funds. It has a market share of about 30% followed by BUPA with about 27%.

    I won’t repeat all of my objections to government subsidies for health insurance firms which cost about $7 billion p.a. for the taxpayer. But my objections remain strong.

    • The administrative costs, including profit, of health insurance funds including Medibank Pte are three times those of Medicare. Just look at the money they waste on television advertising.
    • With government approval, health insurance premiums have increased every year at well ahead of the CPI. The increase in Medibank Pte premiums are close to the industry average.
    • Private health insurance benefits high income earners at the expense of low income earners.  The more wealthy Australians use health insurance to jump the hospital queue
    • Gap insurance by health insurance funds has underwritten the largest increase in specialist fees in 25 years.
    • These health insurance firms limit the ability of Medicare to put a cap on cost increases, particularly by private hospitals and private specialists who are paid multiples of the salaries paid to equally competent specialists in public hospitals.
    • The US is the stand-out example of the havoc which high cost private health insurance (PHI) can cause. As I pointed out in my blog of March 4, 2013, ‘If the US had a health service like those in countries without heavy reliance on PHI, such as Australia, it could solve its budget deficit problem.’ Health services in the US scream out ‘Beware of private health insurance’.

    I have been a member of Medibank Pte for 37 years. It has been a waste of money. All it provided was some irrational ‘peace of mind’. I have found it hard to admit to myself that all those tens of thousands of dollars in premiums I paid over 37 years have been largely wasted. In the same way health bureaucrats in Canberra, under pressure from very powerful vested interests find it difficult to face the fact that their policy advice to governments on the subsidies to high cost  health insurance companies has resulted in appalling public policy.

    My forlorn hope is that an Australian Government will one day eliminate the $7 billion corporate welfare which the Australian taxpayer presently provides to PHI. There would be a bonus in money saved by the government, but more importantly it would shore up Medicare’s position as a single payer that could better control costs. Until that happy day occurs, I don’t really care whether Medibank Pte is public or privately owned. It makes no difference.  It is part of a high cost parasitical industry. All private health insurance is undermining the universal, efficient and equitable public health insurance system called Medicare.

  • Fran Baum & Paul Laris. Beware of the crocodiles, they will keep you out of the garden!

    We interviewed  20 former Australian Federal and State and Territory health ministers about the extent to which they were able to focus on promoting health, health equity and social determinants of health during their tenure. Social determinants of health are the conditions of everyday life (income, housing, food availability, employment, education) and the structural factors that shape those conditions (distribution of wealth, taxation levels, extent of political empowerment) that combine to determine health outcomes and their distribution. Evidence from the Commission on the Social Determinants of Health showed that action on the social determinants are vital to achieving equitable health outcomes.

    One health minister told us of a public servant who advised: ‘Health has two components to it. There’s health services, which is like a swamp full of crocodiles, and public health which is like a very pleasant garden’. The public servant noted that most ministers try and spend as much time ‘in the garden’ as possible but warned the minster to “make sure there’s a fence around the swamp and the crocodiles can’t get out first”.  From our interviews it was clear that nothing detracts more from a focus on social determinants than hospitals demanding ever more resources and ensuring they get on the  front pages. The strategies our ministers reported included “divide and rule”, for instance make allies with GPs at the expense of other groups of doctor  and having a very well-articulated, evidence-based policy framework to “divert money away from this monster of hospital based critical care”.

    Part of the process of fencing in the crocodiles was trying to shift the system towards primary health care, which as one minister said is “the only way to ameliorate the galloping demands and costs of the acute health care system”. Health ministers who had achieved a shift in health care resources in the direction of equity frequently reported it as a politically difficult move, given the competing, often emotive, calls for funding for the acute care sector. The good news is that when they did make a shift in the direction of primary health care they reported it as a legacy of which they were proud.

    Our interviews were with health ministers who held office between 1988 and 2010.  In the current health policy context even fewer few health minsters appear able to fence in the crocodiles. In South Australia we have seen very significant reductions in spending on our community health services, all done under the guise of a health funding crisis. Yet last year the salaried doctors received 9% pay increases, which seems to be a case of the crocodiles running the show! It will be interesting to monitor what happens in Queensland where Minister Springborg appears to be trying to fence in his crocodiles by introducing more stringent contracts, despite threats from the doctors about mass resignations unless Springborg backs down.

    Our study showed that only really brave health ministers are able to stare down vested interests sufficiently to make changes that are likely to increase health equity and bring about action on the social determinants of health. One of the most important things that might drive this action is a strong commitment to social justice and redistribution and a rejection of the current commitment to market fundamentalism as the bible which drives policy decisions. It is tempting to speculate that the influence of  content- free managerialism has joined with careerism amongst politicians  to reduce the likelihood of any effective ministerial commitment to equity.   A number of the ministers we spoke to felt that a spirit of redistribution had been more event in the 1970s and 1980s before the religion of neo-liberalism occupied the state. The introduction of Medicare was possible because it was linked to the Accord between the government, unions and business.

    If we are to see health ministers in the future who are driven to pursue health policy aimed at achieving health equity then they are going to have to stand up to some very powerful ideologies and players. These include the organised medical profession, those pushing market fundamentalism as a basis for organising society and a powerful medical-industrial complex that lobbies for privatisation of health services. With such pressures it becomes easier to see why the compelling evidence on the social determinants of health equity quite rarely translates into enacted policy.

     

    Reference

    Baum, F. Laris, P. Fisher,M. Newman, L. MacDougall C.  (2014) Dear Health Minister:  tend the garden but make sure you fence the crocodiles. Journal Epidemiology and Community Health Published 2 January 2014,  doi:10.1136/jech-2013-203040 http://jech.bmj.com/content/early/2014/01/02/jech-2013-203040.abstract.html?papetoc

    Fran Baum is the Matthew Flinders Distinguished Professor of Public Health and Director Southgate Institute for Health,Society and Equity, Flinders University. Paul Laris is Member Medical Board of Australia and adjunct researcher Southgate Institute for Health, Society & Equity, Flinders University.