Category: Health

  • John Menadue. Facts on the $11b per annum private health insurance industry subsidy.

    The Minister for Health and Ageing, Sussan Ley has said she wants to canvas community and expert views on PHI (private health insurance).

    If she does consult the community on this issue that will be a welcome change, for consideration of the PHI is usually a private discussion with the vested interests – the PHI industry, doctors and private hospitals.

    I am not holding my breath about real consultation with the community. So much ‘consultation’ is purely token. Furthermore the community is genuinely confused about the range of look-alike policies that are very hard to understand until the patient has to pay. (more…)

  • Alex Wodak. How should medicinal cannabis be provided lawfully in Australia?

    Current Affairs

    Ms Sussan Ley, the Federal Health Minister, recently acknowledged that medicinal cannabis was likely to proceed in Australia but advocated proceeding cautiously. A Private Members Bill is under consideration and seems to have strong support including backing from both sides of the aisle. So the question is now increasingly moving from ‘whether’ to ‘how’ to proceed with medicinal cannabis. 

    Hippocrates said that doctors should ‘cure sometimes, treat often, and comfort always’. Medicinal cannabis is about the need for the health care system to try to ‘comfort always’. What should the lawful provision of medicinal cannabis in Australia hope to achieve?

    First, medicines are expected to be effective. Medicinal cannabis usefully reduces distressing symptoms in a number of conditions when conventional medicines have proved ineffective and/or had unacceptable side effects. There is sufficient evidence of sufficient quality to conclude that medicinal cannabis is effective. Though conventional medicines may often be more effective, they don’t work often enough for medicinal cannabis to be a useful back up. This is the view of many experts and many highly regarded scientific organisations. However some experts and organisations have different views. Medicinal cannabis does not appear on current evidence to cure any condition. But some laboratory research suggests that cannabis may cure some conditions. A different conclusion could be justified in the future.

    Second, we expect medicines to be safe. A recent review concluded that ‘97% of the adverse effects of medicinal cannabis in clinical trials were minor, with dizziness (20%) being the most common’. The prestigious US Institute of Medicine determined that the acute adverse effects of cannabinoids were ‘within the risks tolerated for many medications’.

    Third, these days we increasingly insist that medicines are also cost-effective. There is little information about the cost-effectiveness of medicinal cannabis but it is likely to be cost effective. It may sometimes help to avoid expensive conventional medications or even shorten costly hospital stays.

    And fourth, we would want to make sure that medicinal cannabis does not impair the integrity of Australia’s highly regarded pharmaceutical regulatory system (i.e. the Therapeutic Goods Administration).

    As our politicians increasingly move from the ‘whether’ to the ‘how’ question, we should start thinking about the guiding principles for implementation.

    A national approach is preferable to individual approaches from six states and two territories. So far we have had, or soon will have had, five parliamentary inquiries (Tasmania, NSW, Commonwealth, ACT, Victoria). Let’s hope that we can avoid a situation where residents of one jurisdiction where medicinal cannabis is not approved try to obtain what they desperately want from another state or territory where cannabis has been approved.

    Regulated cannabis is always preferable to black market cannabis as it is virtually identical from one batch to the next, has known concentrations of the key psychoactive constituents and any chemical or microbiological contaminants will be below set safety limits. Currently an unknown but presumably large number of people, some for probably legitimate reasons, use unregulated cannabis they have cultivated or bought from the black market. Surely we can do better than that.

    When deciding whether or not to start medicinal cannabis, the recreational use of the drug should be ignored. The ‘whether’ question should be decided only on the evidence of effectiveness and safety – and ideally also cost effectiveness. When considering ‘how’ medicinal cannabis should be provided, we cannot ignore the large unregulated market for recreational cannabis.

    The introduction of an intervention not previously part of the official health care system should be slow and cautious. It is easier to liberalise a too-restrictive approach than restrict a too-liberal approach. Getting the balance right is important as the more restrictive the approach adopted, the larger the proportion of patients who will use unregulated supplies.

    Any system for administering medicinal cannabis should be sufficiently flexible to allow for changes as knowledge increases over time.

    Ill people who use medicinal cannabis and their carers and doctors should not have to worry about possible legal repercussions provided that they stay within unambiguous legal boundaries covering cultivation, purchase, possession, use and prescribing.

    The system established for medicinal cannabis should identify approved medical conditions and may also need to identify required diagnostic criteria and criteria indicating sufficient severity. As knowledge of the benefits of medicinal cannabis is increasing rapidly, the approved medical conditions should be reviewed frequently. In some exceptional cases, where there is limited evidence there should also be scope for approving medicinal cannabis on compassionate grounds.

    Decisions about medicinal cannabis for individual patients should be made by independent experts and not by Ministers, Department of Health officials or Members of Parliament.

    Lawful cultivation by patients and/or their carers should be an option but not the only option as some will be unable or too ill to cultivate their own cannabis.

    Most patients requiring medicinal cannabis are likely to have limited funds after some years of poor health, so affordability is an important consideration.

    The least-worst way of ingestion at present is inhalation of cannabis vapor. A new pharmaceutical product (nabiximols, Sativex®), the next best option, is in Australia currently approved for only one condition, virtually unavailable and expensive. Older pharmaceutical preparations (Nabilone, Marinol), now obsolete, were too poorly and erratically absorbed to succeed commercially and are therefore unsuitable. Administration of cannabis by inhalation of smoke may sometimes have to be grudgingly tolerated, for example patients with a short life expectancy who have been happily smoking cannabis for some time. Liquid preparations will be needed for children.

    Medicinal cannabis presents a number of challenges for policy makers but none are impossibly difficult. After all, medicinal cannabis is now available in about twenty other countries.

    As Whitlam’s 1972 campaign slogan said ‘it’s time’.

    Dr Alex Wodak AM, President, Australian Drug Law Reform Foundation

  • John Dwyer. Politics trumps health policy yet again.

    Current Affairs.  Health.

    A new medical school in Perth will create more problems than it will solve.

     As must also be true for many colleagues who have been focussed on evidence based solutions to the serious shortage of Australian trained doctors working in rural communities, I am frustrated and annoyed by the Prime Minister’s capricious decision to fund a new medical school in Perth. In an attempt to solve the maldistribution of Australian trained doctors that has resulted in almost 50% of the General Practitioners available to people in rural and remote communities having been trained overseas, governments have applied a “market place” philosophy to the problem. This logic suggested that if we doubled the number of Australian trained doctors there would inevitably be competition for rural careers, as metropolitan opportunities would all be taken! In 2016 our intake of Australian students into medical schools will peak and many readers will know that (a) we are already having difficulty in finding quality clinical placements to maintain educational standards and (b) the flood of new graduates has done nothing to ease the shortage of Australian doctors working in “the bush”. This continuing problem is responsible for much unacceptable inequity with health outcomes in all categories being less satisfactory for rural Australians. Were rural patients able to access medical services as readily as their city cousins it would increase Medicare payments by two billion dollars a year!

    Here is the irony. To solve this problem we do need new medical schools but not schools situated in metropolitan areas providing a standard metropolitan centric curriculum. Here is the major cause of frustration. At least three thorough enquiries seeking evidence-based strategies to address the above inequity have been conducted in the last four years and all have agreed on the major initiatives required. These have been presented to government and as far as I know only one of the suggestions has been accepted (but not implemented).

    There is abundant national and international experience that tells us that medical students who will actually want and pursue a rural career are students who are emotionally, intellectually and even financially wedded to a preference for rural life and hence a rural career. The closest we have come to applying this knowledge involves all medical school having a quota for 25% of their students to be “rural”. The definition of what constitutes “rural” is ridiculous. You are so designated if you have spent five years of your life in a rural postcode. You could have been born in Broken Hill, moved to Melbourne when you were five and not laid eyes on a cow since then but still qualify as “rural” student. The accepted suggestion referred to above would see medical schools fined if they did not achieve their 25% quota.

    At least five universities have been lobbying government for funds for rural based medical school.  In general these would involve expansion of excellent existing rural clinical schools into rural medical schools. I have been heavily involved in developing an evidence-based initiative proposed by a Charles Sturt/ Latrobe partnership for the Murray Darling basin. As had been true for other universities both the Gillard and Abbott governments have said they were attracted to the models but there was no money available. In the background many existing medical schools, concerned that such developments might require them to reduce the number of students they admit, have argued against the establishment of rural schools. Now to have the Abbott government, without consultation with key players, announce a Perth based medical school is nothing short of disgraceful; a “keep WA happy” imperative trumps any need to improve the health of rural Australians.

    What are the key recommendations that we must continue to pursue despite the damaging political intransigence so far on display? Space will only permit a summary.

    Create opportunities for whole of medical education requirements to be fulfilled in the country, too many medical graduates dependent on city placements for vocational training will not return to a rural community. For this reason rural medical schools should be based on undergraduate programs. Admission to a rural based medical school will involve “affirmative action” philosophies to provide for example, the flexibility to overcome rural high school educational disadvantage and an interview to assess genuine “rurality”. Students will enjoy a rural specific curriculum with an emphasis on early development of procedural skills and a focus on indigenous health issues. The medical course will have strong inter-professional learning modules that will involve shared learning with other health related students. Team learning to prepare for team medicine is an imperative for the best use of a scare workforce in the country. Graduates will be guaranteed an internship in a rural based hospital. It is worth debating the merits of redistribution of existing medical school placements rather than increasing further the number of enrolled students.

    A lot of work by dedicated knowledgeable professionals from a number of universities, rural community advocates, the now defunct Health Workforce Australia and numerous rural health organisations has generated the above suggestions and all would have expected that a rural based medical school with the above features would be the “next cab of the rank”.  ‘How naïve’ says Mr. Abbott.

    John Dwyer is Emeritus Professor of Medicine at UNSW. 

  • Philip Clarke. Pharmacy sector in dire need of reform.

    Among the most significant reforms proposed by recently released Harper Competition Policy Review is the removal of regulatory restrictions that greatly limit competition in the community pharmacy sector. But implementing the recommendation will require politicians who are up for a real challenge.

    Any changes to how the pharmacy sector works involves taking on what has been described as “the most powerful lobby group you’ve never heard of.” The Pharmacy Guild of Australia, which represents the interest of pharmacy owners, is widely perceived as one of the most influential lobby groups in Australia.

    Monoploy rents

    Australian pharmacies are currently protected from competition by two sets of government regulations that form part of what’s known as the Community Pharmacy Agreement. Negotiated every five years between the Federal government and Pharmacy Guild of Australia, the agreement regulates most aspects of the pharmacy sector, from remuneration for supplying government-subsidised drugs to rules about the ownership and location of pharmacies.

    The ownership rules disallow non-pharmacists from owning a pharmacy. So they effectively keep supermarkets and large international pharmacy chains, such as the UK’s Boots, from owning pharmacies in Australia.

    The location rules were introduced as part of the first pharmacy agreement in the early 1990s. It prevents new pharmacies opening within a kilometre and a half of an existing pharmacy.

    These ownership and location restrictions have effectively prevented new entrants into the sector and created what economists call monopoly rents for existing pharmacy owners. Monopoly rents represent the benefits that an industry gains from politically-enforced regulations to restrict competition.

    While reform of the pharmacy sector by removing these restrictions has been championed by commentators from as diverse political backgrounds as Paul Howes and Janet Albrechtson, none of Australia’s politicians from any of the major political parties have so far taken up the cause.

    Report after report

    The competition review recommendation is unequivocal:

    the pharmacy ownership and location rules should be removed in the long-term interests of consumers.

    And it comes after a similar recommendation from the 2014 National Commission of Audit report, which advocated:

    opening up the pharmacy sector to competition, including through the deregulation of ownership and location rules.

    Then there’s the report from the Australian National Audit Office (ANAO), which conducted a performance audit of the administration of the fifth Community Pharmacy Agreement (ending June 2015). The ANAO found so many shortcomings in administration of the agreement by the Department of Health that it was:

    not well positioned to assess whether the Commonwealth is receiving value for money from the agreement overall.

    The ANAO report quantified the remuneration pharmacies have received from government since the early 1990s, when the first Community Pharmacy Agreement was put in place. The figure below shows payments pharmacies receive for dispensing and mark-ups (the amount of money added to the price of drugs, to cover overheads and profit) have tripled from around $750 million in 1991 to over $2 billion by 2013 – even after adjusting for inflation.

    Author provided
    Click to enlarge

    This growth is due to much higher volumes of dispensing due to a combination of population increase, ageing, and expanded prescribing from newer classes of drugs, such statins. But as well as the increase in amounts paid to pharmacies each time a drug is dispensed, government payments are now around 20% higher in real terms than in the early 1990s, due largely to greater pharmacy remuneration from mark-ups.

    And while total remuneration has substantially increased, restrictions on competition mean there are actually fewer pharmacy businesses in Australia than when the first community agreement was negotiated in the early 1990s.

    Who wants to be a millionaire?

    The ANAO report also provides a distribution breakdown of this remuneration across different types of pharmacies. As the graph below shows, around 18% of pharmacies receive more than $1 million in remuneration from dispensing drugs listed on the Pharmaceutical Benefits Scheme. A comparison of the 2012 and 2013 financial years indicates a further 140 pharmacies moved into this top-earning bracket.

    Author provided
    Click to enlarge

    The high profitability of established pharmacies mean business sale prices for inner city and suburban pharmacies can run into the millions. And this high purchase price locks out many pharmacy graduates from ever owning their own business. It also means new entrants are saddled with levels of debt that turn what should be profitable business into marginal ones.

    All this creates what might be termed a cycle of rent-seeking: while the ownership and location rules protect existing owners, the next generation of pharmacy owners will have to buy their businesses at inflated prices. And this makes new owners seek ever more protection from competition to make their business profitable and, in some cases, viable.

    This might also partly explain campaigns such as “Pharmacy Under Threat”, which was run by the Pharmacy Guild of Australia. It was held in the middle of the last Federal election campaign against the relatively modest reforms proposed by the former government to accelerate reductions in price of generic drugs.The Guild claims that a petition distributed through a network of community pharmacies attracted 1.2 million signatures.

    Of course, the lack of competition in the sector comes at a cost to the consumer, both in terms of the choice of where they can shop and in the prices that must be paid. As the ANAO report demonstrates, a packet of aspirin, which may cost as little as $3 in retail marketplace costs up to $12 when it is dispensed under the PBS.

    Still, while the economic arguments for increased competition are strong, the politics of implementing community pharmacy reforms remain another matter. As one of history’s most astute political commentators Niccolò Machiavelli once observed, there is:

    nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system. For the initiator has the enmity of all who would profit by the preservation of the old institution and merely lukewarm defenders in those who gain by the new ones.

    It’s this challenge that faces any reform-minded politician wanting to introduce more competition into Australia’s pharmacy sector.

    Philip Clarke is Professor of Health Economics at University of Melbourne. This article was first published in The Conversation on 7 April 2015.

  • Alex Wodak. Prohibition and its discontents: who really killed Chan and Sukumaran?

    The fall out from Indonesia’s execution of Chan and Sukumaran for drug trafficking continues. In their unprecedented press conference on 3 May, the leaders of the Australian Federal Police argued that under existing laws and guidelines, they were obliged to share intelligence with their Indonesian counterparts. Moreover, under similar conditions in future, the AFP expects that similar decisions will be made. The basic problems are that many young Australians travel to countries that still retain the death penalty for drug trafficking (and some other offences) and prohibition is still the global drug policy. So the execution of Australians and citizens of other nationalities for drug trafficking in future are inevitable.

    As so often happens with tragedies, the search is now on for someone or some organization to blame. The problem is that everyone is responsible while no one is also responsible: this is in reality a system problem.

    The members of the firing squad weren’t really responsible as they were just carrying out orders. The Indonesian police and court officials weren’t really responsible as they were merely implementing laws that their parliament had passed. President Widodo wasn’t really responsible as he was, like any good democratic leader, merely responding to overwhelming popular opinion in his country. Howard and Rudd weren’t responsible either because in their earlier support for the execution of the Bali bombers they reflected overwhelming popular opinion in their country at the time. Abbott and Bishop weren’t responsible as they inherited this mess from their predecessors. And Chan and Sukumaran weren’t really responsible because they were merely pawns of higher-level criminals who managed to evade detection. The seven mules weren’t responsible either because Chan and Sukumaran had coerced them. As is so often the case in drug trafficking cases, the fall guys who got caught and paid the ultimate price came from poor minority families.

    Compounding the tragedy is the ineffectiveness of drug prohibition, now acknowledged with increasing frequency. More than half a dozen retired and now even serving Australian Police Commissioners have conceded that drug law enforcement has minimal impact on the drug market. A year ago, Prime Minister Tony Abbott admitted that the war on drugs is a war we cannot win but nevertheless argued that it is a war we should keep fighting. In June 2011 the Global Commission on Drug Policy, consisting of more than twenty retired world leaders, released a report documenting the failure of drug prohibition and called for a consideration of options. In the last four years, the Global Commission on Drug Policy has recruited more world leaders and issued more reports. Some countries are now starting to reform their drug policy. In April 2016 in New York, a United Nations General Assembly Special Session will consider the growing crisis in global drug policy.

    The seizure of 390 kg of heroin off the coast of Part Macquarie in 1998 did not affect the price or purity of heroin in Australia. Chan and Sukumaran were executed for their role in the attempted trafficking of 8 kg of heroin. What these executions may have done for a time is increase the perception of risk for drug traffickers. That might then get translated into higher prices and greater profits which might in turn convince some wavering wannabe drug trafficker to try their luck. Whatever else drugs might be, they are also a market with buyers and sellers agreeing on a price for a quantity of a commodity. But unlike most markets, drugs are bought and sold in a pyramid market where buyers are also sellers.

    If drug prohibition was to ever be effective anywhere it should be in prisons. Yet drugs are available in most prisons. A few years ago on an international assignment I asked a prisoner in an Indonesian drug prison near Jakarta whether inmates could still obtain drugs. ‘Yes’ he replied, ‘but they are usually more expensive than in the community though sometimes drugs are less expensive inside than outside prisons’.

    So why do we keep fighting a war on drugs when an increasing number of prominent members of the community accept that this is futile?

    Professor Craig Reinarman, a US academic concluded that ‘drugs are richly functional scapegoats. They provide elites with fig leaves to place over unsightly social ills that are endemic to the social system over which they preside. And they provide the public with a restricted aperture of attribution in which only a chemical bogeyman or the lone deviants who ingest it are seen as the cause of a cornucopia of complex problems.’

    We continue to fight a war on drugs for several reasons. Drug wars are still useful politically. Many politicians still think the transitional costs of changing drug policy are too high. But there are now supporters of drug law reform among politicians of virtually all parties. Law enforcement aimed to reduce the supply of drugs employs many people. The costs of continuing the current failed policy are increasing while the costs of changing policy are declining as more countries move out from the crumbling straightjacket of international drug control.

    Australians who wish to avoid more tragedies like Chan and Sukumaran should support drug law reform and the universal abolition of the death penalty.

    Dr. Alex Wodak AM, President, Australian Drug Law Reform Foundation, Director, Australia21

     

  • Anne-Marie Boxall. Mental health challenges in rural and remote Australia

    Mental health challenges in rural and remote Australia are widespread and serious. Although the prevalence of mental illness is about the same across the country – about one in five people report having had a mental health problem in the last 12 months – a higher proportion of people in rural and remote areas pay the ultimate price of mental illness and related concerns; suicide rates in rural and remote Australia are 66 per cent higher than they are in major cities.

    There are many positive aspects to rural and remote living: people in rural areas, for example, report higher levels of civic participation, social cohesion and social capital. However, there are also many particular challenges associated with rural life. Some people have a sense of pessimism about future prospects; others experience financial uncertainty and pressure, socio-economic disadvantage, or struggle living with chronic conditions. Such challenges may well prejudice the mental health and wellbeing of people in rural areas.

    Also, people in rural Australia often have trouble getting to see a mental health professional when they need to. Medicare data bears testimony to this. They show that Medicare expenditure per person on mental health services in the bush is only 60 per cent of what it is in the city. This is likely to be because there are far fewer GPs, psychiatrists and psychologists per person practising in rural and remote Australia than in the cities.

    Some rural people appear to be suffering more than others. Farmers, for example, are twice as likely to die by suicide than the general employed public. The rate of suicide among young men living outside major cities is twice as high as it is in major cities. And the suicide rate among young Aboriginal and Torres Strait Islander people is five times higher than that for young non-Indigenous Australians.

    In response to these startling statistics, the National Rural Health Alliance has developed three modest proposals that will help make it a little easier for people to access the care they need. The proposals are as follows.

    • Introduce Medicare rebates for telehealth services delivered by psychologists and others through existing programs, such as Access to Allied Psychological Services (ATAPS), and the Better Access to Psychiatrists, Psychologists and General Practitioners.
    • Continue mental health first aid training for Rural Financial Counsellors. Funding for the program is due to cease on June 30, 2015.
    • In consultation with Indigenous experts, speed up the availability of culturally-appropriate online mental health resources specifically for Aboriginal and Torres Strait Islander people, perhaps using Aboriginal Health Workers with special training in e-mental health.

    The Alliance has taken these proposals to Parliamentarians, suggesting that they should be considered for funding in the upcoming Budget. We will continue to advocate for these proposals in the coming months because they are cost-effective and practical measures that would make a real difference to the health and wellbeing of people living in rural and remote Australia.

    The Alliance has recently published a Fact Sheet highlighting some of the issues relating to mental health in rural Australia. We have also published a Rural Mental Health Help Sheet with valuable information on where to find advice and support. Both are available at http://ruralhealth.org.au/factsheets/thumbs.

     

    Anne-Marie Boxall, National Rural Health Alliance.

     

  • John Dwyer. Sliding down the slippery slope to two-tiered health care.

    Private Health Insurance gets a foothold in primary care.

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

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

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

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

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

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

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

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

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

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

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

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

    John Dwyer is Emeritus Professor of Medicine at UNSW. 

     

     

     

  • Alex Wodak. The toxic combination of illicit drugs and politics: Australia confronts ice

     

    John Ehrlichman, the Watergate conspirator, claimed to have come up with the idea of waging a war on drugs while he was a member of President Nixon’s ‘Committee for the Re-Election of the President’, wonderfully referred to as ‘CREEP’. The aim, Ehrlichman told Nixon, was to ensure that the elderly wealthy white voters who turned out in such large numbers to vote for Nixon in 1968 would turn out again in 1972 on polling day. The plan was to appeal to their contempt for the young, poor and black using illicit drugs as the perfect ‘dog whistle’. Despite the albatross of the Vietnam War hanging around his neck in 1972, Nixon won 49 of the 50 states in a landslide victory. Politicians around the world took note. An electoral magic pudding had just been discovered.

    In the early 1970s, US Congress established a National Commission on Marijuana and Drug Abuse but President Nixon got to appoint most of the members. Nixon stacked the Commission with people he thought would support the sorts of recommendations he wanted. When Nixon heard that the Commission was leaning to recommend ending cannabis prohibition he called in the chair, Raymond Shafer. The Watergate tapes recorded the conversation: Nixon: “You’re enough of a pro to know that for you to come out with something that would run counter to what the Congress feels and what the country feels and what we’re planning to do, would make your Commission just look bad as hell….Keep your Commission in line.” Towards the end of the meeting Nixon advised Shafer that he had not heard yet from the committee that was considering Shafer’s application to become a Federal judge. In the end Nixon rejected the Commission’s recommendations and Shafer did not get the judicial position he had applied for.

    Fast forward to 5 September 1989 when US President George HW Bush addressed his nation on television and held up a bag of crack cocaine from a recent arrest close to the White House. President Bush used the address to announce a major ramping up of the war on drugs but he did not tell his fellow Americans that, on instructions, law enforcement officials had lured the reluctant black crack seller to Lafayette Park, near the White House. President Bush was under considerable pressure at the time as opposition rose to his economic restructuring.

    On 8 April, 2015, Prime Minister Abbott, also under considerable political pressure, announced a new Ice Task Force. Yet not so long ago, in December 2014 the Abbott government had established a new drug advisory body, theAustralian National Advisory Council on Alcohol and Drugs (ANACAD) whose top priority was to come up with effective responses to ice. ANACAD had earlier taken over from the Australian National Council on Drugs.

    For decades drug policy has been a very useful prop for those seeking election or re-election or a boost to sagging opinion polls. But communities around the world are starting to be a lot more discerning about fear-based political machinations involving drugs. In the USA, several different polling organisations  have found that a growing majority now supports regulating ‘marijuana’ (i.e. cannabis). In Australia, support for once controversial but pragmatic interventions like needle syringe programs and supervised injecting facilities continues to slowly climb.

    A few years ago, some retired Australian Police Commissioners started commenting that our drug law enforcement was more effective than previously and about as effective as it ever could be but still the impact on the drug trade was negligible. Now even some serving Police Commissioners have made similar comments.

    The community’s favourite drug intervention is education. But the results of mass and school based education campaigns are pretty modest. The expectations of the community and politicians about the impact of drug education are unrealistic.

    Drug treatment has worthwhile benefits but improvements are usually much slower than the dramatic progress the community wants. But drug treatment in Australia, as in most countries, has a limited capacity, range of options and flexibility. During alcohol prohibition in the USA (1920-33), treatment for people with alcohol problems disappeared. Similarly, drug treatment struggles in countries where drugs are defined primarily as a criminal justice issue. Australia will make very little progress with ice while most people badly wanting help have to wait in a queue for six months as they mostly do now.

    Although drug problems are found across the economic and social spectrum, they are more common in severely disadvantaged populations. Also, countries with greater inequality, like Australia, seem to have worse illicit drug problems. Support for reducing inequality in Australia and other countries is growing with the case so far made largely on the grounds of improving the economy. But a fair case can also be made that less inequality would reduce some of our social problems including illicit drug use.

    The $64 million question that has not been asked about ice is why the drug market started providing this drug in the first place. For me the answer seems clear. Drug prohibition encourages more dangerous drugs to replace less dangerous drugs just as bush cannabis morphed into skunk and then Spice, powder amphetamine morphed into ice and ecstasy morphed into related but much more dangerous compounds.

    We haven’t got there yet but Australia is slowly moving to acknowledge that it’s not so much illicit drugs that are dangerous as having a drug market that is completely unregulated. Economic forces ensure a vibrant drug black market while political forces till now have precluded a pragmatic arrangement. In the short term, political forces usually dominate but in the long term, economic forces prevail.

     

    Dr Alex Wodak AM, President, Australian Drug Law Reform Foundation, Board Member, Australia21

  • Ian Webster. On thin “ICE”.

    If we wish to annihilate the junk pyramid, we must start at the bottom of the pyramid: the addict in the street, and stop tilting quixotically for the higher-ups so-called, all of whom are immediately replaceable. The addict in the street who must have junk to live is the one irreplaceable factor in the junk equation. When there are no more addicts to buy junk there will be no junk traffic. As long as the junk need exists, someone will service it.

    (William S Burroughs, Naked Lunch, 1959)

    Are we in the midst of an “ICE” epidemic? Was the PM correct to say methamphetamine (“ICE”) is our “worst drug problem”, it is a “pernicious and evil” drug, it is “far more addictive than any other illicit drug”? Mr Abbott was launching the national task on “ICE”.

    Or is this another cycle of drug alarm and groupthink? Recall, “reefer madness”, the “killer weed”, “the next crack cocaine”, “the meth mouth”, “the faces of meth” and “hashish assassins” ad infinitum.

    On 8th April Leigh Sales introduced the ABC 7.30 Report, “Revelations of ice use and suicide in the Australian Navy have shocked the Defence establishment and Australia’s political leaders.” This followed the previous night’s tragic report by Louise Milligan of nine suicides in young sailors at the West Australian naval base, HMAS Stirling. These perplexing and disturbing events demand reflection on the underlying causes of mental distress and suicide. But these important questions were conflated with “ICE”, a spin-off from the PM’s announcement of the task force. Next day, on Radio National’s AM program, Green Senator Peter Whish-Wilson, himself a military veteran, was interviewed about the parliamentary inquiry he had instigated into mental health in the military community. Again “ICE” was dragged to centre stage, not by the Senator but by Fran Kelly, the interviewer. Other media have been even more caught up in the “ICE” frenzy.

    Addiction is not a switch to be turned off and on. Addiction takes time, months, sometimes years, to develop. Methamphetamine use over a long period becomes the substrate for addiction. The majority of long-term users have already well-established dependence on other drugs – polydrug users. They are drug tolerant and in drug-seeking overdrive; they seek more potent drugs.

    Simple exposure does not cause addiction. Think for a moment of the hundreds of hospital patients receiving pain relief, virtually none will become “addicted”. The same drug, morphine, injected in the ‘street’ carries a high risk of addiction. Addiction (drug dependence) arises from an interaction between a vulnerable person (nature and nurture), the social environment (attitudes, norms of peers) and a drug.

    Medicine is long familiar with amphetamines. They are not new. They have been used in asthma, depression (even anxiety), for appetite suppression and now may be prescribed for narcolepsy and attention deficit hyperactivity disorder. University students take the stuff to cram for exams and US pilots are kept alert by amphetamines during combat missions. Their stimulant effects are understood and the potential harms to the cardiovascular system are known.

    Where do the amphetamines, methamphetamine, stand in relation to other substances?

    The population prevalence rate of methamphetamine use in 12 months is 2 – 3 per cent compared with the 83 per cent for alcohol. Alcohol use disorders occur at 15 – 20 times the rate of methamphetamine disorders. For every methamphetamine-related death there are 65 alcohol-related deaths; for every emergency presentation there are 30 alcohol-related presentations; for every ambulance emergency call-out there are 25 alcohol-related call-outs.

    Many suicides are underpinned by illicit drug use, including methamphetamine, but alcohol intoxication and dependence is a far more potent factor in suicide worldwide; of attempted suicides presenting to hospitals, 50 to 80% had been drinking heavily or were intoxicated at the time and at post mortem alcohol is the drug most commonly found.

    The amphetamine drugs are harmful. They can cause psychotic disturbances; about one in seven admissions for schizophrenia have a concurrent stimulant disorder. They cause anxiety, aggression and depression, on withdrawal, as well as affecting the cardiovascular system. These are features too of alcohol intoxication and dependence as well as there being a veritable textbook of alcohol-caused mental and physical conditions and harm to others.

    Policing and law enforcement are important especially to prevent the exploitation of vulnerable people. They can’t solve the “ICE epidemic despite the current wave of interdictions and arrests. Community-based solutions are needed – supports for families and children, educational and work opportunities for young people, early intervention and prevention, access to primary care interventions and to treatment and rehabilitation services; none of which are given priority compared with resources devoted to law enforcement.

    As William Burroughs said,

    When there are no more addicts to buy junk there will be no junk traffic. As long as the junk need exists, someone will service it.

    And he should know.

     

    Ian Webster is Emeritus Professor of Health and Community Medicine at UNSW and patron of the Alcohol and Other Drugs Council of Australia. He was formerly a National Mental Health Commissioner and Chair of the Australian Suicide Prevention Advisory Council.

  • Alcohol is a bigger problem than ice.

    In the Herald Sun on April 8, 2015, Jeff Kennett, the former premier of Victoria, said that it was time to stop the promotion of alcohol. See link to article below.

    In this article he says ‘If it is good enough to ban the advertising of tobacco products, if it is good enough to make the wearing of seat belts compulsory, surely if the serious about family violence, the road toll, our crime rate, it is time to ban the promotion of alcohol. … The time has come to do what we have done for tobacco – ban all advertising of alcohol products and ban all sponsorships by alcohol companies.

    Todd Harper, the CEO of Cancer Council of Victoria tells us in The New Daily of April 10 that ‘There is already a complete ban on alcohol advertising in sport in France and there have been moves to phase out alcohol sponsorship in sport from Ireland, the UK and South Africa.‘  John Menadue

    http://www.heraldsun.com.au/news/opinion/time-to-stop-promotion-of-alcohol/story-fni0ffsx-1227294833309

  • Ian McAuley. If the government wants price signals, it should stop supporting health insurance.

    Prime Minister Tony Abbott has declared the Medicare co-payment proposals “dead, buried and cremated”, but two related ideas behind it live on: Medicare is becoming “unaffordable” and our universal health system should morph into a program reserved for the poor.

    The government’s original justification for the co-payment was to bring more “price signals” into Medicare. In itself the idea has merit, but the government has been going about it in a ham-fisted way.

    Whether by design or accident, the government seems to be undermining the principle of Medicare as a universal tax-funded program, paving the way for private health insurance toplay a role in funding primary care.

    But private insurance, by its very nature, suppresses price signals and encourages over-servicing and cost escalation. It is an expensive way to fund health care.

    If the government wants more price signals in health care, it can start by standardising the mess of arbitrary co-payments in health care. If those co-payments can be re-designed to carry meaningful price signals, they will guide wise choice and contribute to efficient resource allocation.

    The government should also consider requiring those better-off Australians, who have much more liquid savings than in times past, to contribute more to their own health care from their own pockets rather than assuming that someone else – Medicare or private insurance — will cover the minor outlays they could easily afford themselves.

    The unaffordability myth

    It’s easy to panic about the looming cost of health care as Australia ages. That has been the message of successive Intergenerational Reports, the latest of which suggests that under “previous policy” (Labor government) setting, Commonwealth health expenditure would rise from 4.4% to 7.1% of GDP by 2054, but would be contained to 5.7% of GDP under the government’s “proposed policy”.

    The sensible response to these projections is to ask “so what?”. As the population ages, Australians will indeed spend more on health care.

    But simply shifting costs off-budget and on to individuals, or to private insurance mechanisms is an expensive and clumsy way to fund health care. It does not make health care more “affordable” – we still have to pay for it.

    As John Deeble, one of Medicare’s original designers, pointed out, the simple solution to fiscal pressures on the Commonwealth’s health budget is to raise the Medicare Levy.

    The government said that imposing a co-payment and reducing bulk-billing would result in reduced use of Medicare services, which have risen from 11 to 15 a head over the last ten years.

    That idea would be sound if Medicare services were stand-alone, but any reduction in demand would most probably be among those in most need of care, particularly early intervention to stave off costly episodes of hospitalisation and chronic disease. And there would be a shift of demand on to hospital emergency services.

    The costs to health budgets and to the whole economy (in terms of lost workforce participation resulting from chronic illness), could well be far greater than any saving in Medicare.

    But, as the Public Service Commission’s capability review of the health department points out, the department tends to work in “silos”, and seems to lack the capability of considering “whole-of-health-system policy”.

    Under pressure to cut expenditure, Medicare is the easy target. Costs outside the “Medicare” silo are not their concern, and if they can move some load on to individuals, private insurers or state government hospitals, that’s clever cost-shifting. That’s not so much a “policy”, which would be concerned with the public interest, as an attempt to contain outlays within an arbitrary fiscal limit.

    Exempting the rich from price signals

    The specific co-payment idea came from the government’s Commission of Audit, which saw it as a first step in a stealthy but radical transformation of health services away from universalism, towards a US-style system with “an expanded role for private insurance” to “cover all services covered by Medicare and public hospitals”.

    Medicare would be reduced to a service for the “indigent” (to use the US term).

    Despite dumping the co-payment, health minister Sussan Ley still wants to “reduce the number of bulk billed consultations to people who can afford to pay something”. This suggests she sees Medicare as a charity or distributive welfare system, not a universal system as it was originally envisaged.

    As the freeze on Medicare reimbursements bites harder, bulk-billing will probably fall (as intended), resulting in mounting pressure on the government to change the legislation and permit private health insurance to cover the gap.

    The Commission hypocritically calls for people with means to take “individual responsibility for their health care”, but to be guided by “price signals” while they are herded into private health insurance.

    But private insurance is no more about “individual responsibility” than Medicare is: it’s still about handing over responsibility to a third party. Far from incorporating “price signals”, it simply changes the message from “Medicare will pay for it” to “HCF/BUPA/Medibank Private will pay for it”. This incentive for over-use is known as “moral hazard”.

    Co-payments and personal savings

    It’s easy to forget that we already have co-payments in health care. Out-of-pocket expenses, not covered by public or private insurance, account for 18% of health care expenditure, in line with other prosperous countries.

    But the breakdown of out-of-pocket expenses is messy and haphazard; a reflection of the “silo” arrangements in the health department. Expenses fall heavily on dentistry, specialist services and non-prescription medications. Many are uncapped, meaning the consumer is left bearing open-ended risk.

    It’s also easy to forget that Australians, on average, have enough liquidity to cope with modest co-payments when a need arises. Australian Bureau of Statistics data show that on average, households have A$37,000 in available funds.

    If we want price signals in health care, then there is a good case for requiring personal payments for those with means, without the moral hazard of third party payment.

    Some commentators suggest we should go down the path of health savings accounts, whereby people are required to set aside funds in personal accounts to be drawn on only for health care needs. Only when a person’s health savings account is depleted does the state cover additional expenses.

    Health savings accounts certainly have advantages over private insurance, in that they retain a measure of individual responsibility, and they tend to accumulate with age.

    But they have their own problems, in that when someone’s HSA reaches a high level there is a “use it or lose it” form of moral hazard. And in economic terms, they tend to privilege health spending over other consumption, thus distorting consumer choice.

    In any event, Australia’s compulsory superannuation is already serving some of the same purpose as health savings accounts. Once Australians retire, their superannuation balances become accessible as personal accounts (apart from those whose superannuation is in annuity form). Including superannuation, singles over 65 have on average A$170,000 in reasonably liquid assets, while couples have A$430,000.

    We could be served well by a requirement that all with means pay for their health care up to a limit before Medicare kicks in to cover high costs. That’s essentially the policy the Coalition took to the 1987 election, when it proposed that all who could afford it should contribute the first A$250 a year to their health costs (equivalent to about A$800 now), without the support of insurance.

    That would mean most people make no call on public funds in any one year, while preserving the universality of Medicare as a single national insurer, covering those with high needs or limited means.

    That’s essentially the Nordic model. It combines the best or market price signals and the power of a government insurer, without the distortion and high cost of private health insurance or fiddly and paternalistic measures such as health savings accounts.

    Ian McAuley is Lecturer, Public Sector Finance at University of Canberra. This article was first published in The Conversation on 1 April 2015.

     

  • John Menadue.  Alcohol and junk food – winning at the expense of our health.

    If you seriously follow almost any major Australian sport as I do, you will be conscious of the saturation alcohol and junk food advertising.

    And in the run up to the centenary of Gallipoli there are no holds barred to link heroes and booze… VB now have a new television advertisement filmed at Melbourne’s Shrine of Remembrance which tells us to bow our heads to the 16 th Battalion,AIF at Gallipoli and raise a glass of VB to their heroism. How tacky can you get!

    This is a re run of the campaign that VB have been running since 2009. The 2012 campaign was fronted by General Cosgrove  now our Governor General. He sits at a bar and tells us how good VB is in supporting veterans and their families. There is an explicit link between the military, heroes and alcohol.

    The evidence is clear that  alcohol and junk food are causing long-term damage to our health. We cannot  ignore it.

    The Council of Australian Governments’ (COAG) National Partnership on Preventative Health was established because of the alarming increase in preventable chronic diseases as a result of people’s lifestyles. As Nanny Endovelicus pointed out in this blog in October last year and reposted on 22 and 23 January this year ‘These lifestyle issues – in particular smoking, poor nutrition, alcohol misuse and physical inactivity already account for some 40% of potentially preventable hospital admissions. … The growth of lifestyle diseases worrying those watching health expenditure were primarily in diabetes, various cancers, COPD, strokes and other preventable cardiovascular system diseases.’

    Alcohol Consumption

    Latest statistics are that about 20% of the population continues to drink at levels risky to their long-term health – pretty well unchanged from the ABS results in 2007-08; half of males and one third of females drank riskily for single occasion risk.  The estimated economic and social cost of alcohol is over $30 b. per year.. The good news is that since the 1970s our per capita alcohol consumption has declined although it remains above the OECD average.

    Obesity

    By mid-2012 almost two thirds of Australians over 18 years were over overweight or obese according to the ABS, a significant increase from a decade ago. The current combined level for obesity and overweight is 63% for adults.  Of children between the ages of five to 17, about 18% are overweight and 8% are obese. This is very bad news. Australia is now in the top league tables in the obesity stakes, still lower than the US, but we are catching up fast.

    Smoking

    We have clearly made progress in reducing tobacco consumption despite the activities of The Australian newspaper and Institute of Public Affairs in defending. Big Tobacco. In 1980, 35% of our population smoked. In 2012 it was down to 20%. It has been a success story and major contributing factors have been the bans on tobacco advertising on TV and radio, and major public education programs.  It is quite a success story in showing what can be done although smoking amongst our indigenous communities and country people is still high.

    We have a job ahead of us to address poor health, particularly as a result of alcohol addiction and junk food, including sugary drinks that are driving our obesity epidemic.

    But the signs are that the federal government is turning its back on the problem. .

    In the last federal budget, Program 1.2 for the Health Department which deals with drugs like alcohol, education against illicit drug use and tobacco was reduced from $224 million in 2013-14 to $161 million in 2014-15. According to the forward estimates it will be down to $131 million in 2017-18.  In money terms this is a reduction of 40%.

    The COAG Partnership on Preventative Health with the states has been abolished together with some $400 of promised funding. The programs that will be mainly affected were focused on children, community exercise, nutrition, education and lifestyle risks.

    The Australian National Preventative Health Agency was abolished in the 2014 budget.

    The Australian Institute of Health and Welfare which provided invaluable data on health risks and preventable disease has been abolished and its functions transferred to a large productivity and performance authority.

    The government’s  compromised position  on prevention was also clearly shown a year ago when the Assistant Minister of Health Fiona Nash hired a junk food lobbyist as her Chief of Staff. She tried to wipe out the industry’s voluntary food-star labelling system. With control of ministers’ staff by the Prime Minister’s Office this appointment of a junk food lobbyist could not have been a misunderstanding..

    This all adds up to a story of short term success for the alcohol and junk food industries with the complicit national sports organisations, sports people and the broadcasting media.

    It is also a good example of budgetary cuts for financial short term advantage which have long term and damaging consequences for our health. The bad health consequences of alcohol and junk food consumption don’t show up immediately. But the consequences down the track are clear and horrible.

     

    In this post I have drawn heavily on earlier posts by Nanny Endovelicus, Preventing Prevention.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


     

  • Ian Webster.  Alcohol-drenched cricket.

    Michael Thorn is right; the ICC Cricket World Cup was an alcohol-drenched event (SMH Tuesday, 31st March 2015).

    Cricketers were once models of sportsmanship. There was even altruism and some became statesmen. Recall, “That’s simply not cricket.” No longer, as the game is subverted by money and alcohol. As I write, the ABC is broadcasting the “performance-enhancing” drug scandals in the AFL. Just as scandalous, more scandalous, is that sport is a vehicle for promoting our most socially damaging drug, alcohol.

    To adolescent binge drinking, we respond – they should be taught at school; the drinking age should be raised; they need other outlets and activities; they should be disciplined and so on. But in this hand-wringing adults are forgotten. It is the behaviour of adults that the young seek to emulate. They aim to become like us.

    In becoming adults, young people test limits and learn social skills for the future. They want to be acknowledged, to fit in, to be one of the group. Herein lies the problem. Skilled marketers can exploit these vulnerabilities and link sporting achievements, heroic performances, glamour and attractiveness to the brands of alcohol; welding loyalty to a brand.

    There are physiological and psychological reasons for concern about drinking in adolescence. A lifetime pattern of heavy drinking is more likely to be established if drinking starts at a young age and the developing brain is at risk. Governments know this and restrict alcohol ads during TV viewing times of young people. But sport gets around it.

    That advertising alcohol creates problems is accepted, but not by all. The alcohol industry in 1998 set up a voluntary Alcohol Beverages Advertising Code to adjudicate complaints about alcohol advertising. The code covers – the responsible and moderate portrayal of alcohol, responsibility towards minors, responsible depiction of the effects of alcohol and safety. It is hardly surprising that independent evaluations have shown its determinations generally favour the advertisers. And it has been criticised for lack of transparency and inability to cover ‘new media’. Also there are other advertising codes for television, radio, outdoor and publishers’ which include alcohol in their codes of practice.

    An alternative and independent body was set up in 2012 by the McCusker Centre for Action on Alcohol and Youth and the Cancer Council of Western Australia– the Alcohol Advertising Review Board. It has 122 independent panel members. The Board’s chair, Professor Fiona Stanley AC, said in the 2014 Annual Report that many of the complaints were about sport and alcohol. The Board has recommended that,

    “…the loophole in the Commercial Television Industry Code of Practice should be closed as part of a comprehensive strategy to reduce young people’s exposure to alcohol promotion. This should be accompanied by measures to remove advertising and promotion related to alcohol company sponsorship of sporting associations, teams and events where children and young people may be exposed.”

    Australia has tinkered around the edges of controlling the promotion of alcohol and balks at going as far as countries like France and New Zealand. France, a country with a passion for alcohol, has banned alcohol sponsorship, advertising in cinemas and television and targeting young people.

    Alcohol is not ice cream or cornflakes. It has toxic effects on the mind and body with manifold social consequences. Yet worldwide it is one of the most heavily advertised products. More than 94% of Australian students aged 12 to 17 have seen alcohol advertising on television as well as in magazines, billboards and a myriad of other locations. Current industry self-regulation is an abject failure.

    If there is any good news out of the World Cup ‘booze up’ it is that the cricketers’ behaviour has offended the sensibilities of many Australians. Time then, to break the nexus between sport and alcohol.

    Ian Webster is Emeritus Professor of Health and Community Medicine at UNSW and patron of the Alcohol and Other Drugs Council of Australia. He was formerly a National Mental Health Commissioner and Chair of the Australian Suicide Prevention Advisory Council.

     

  • ICC Cricket World Cup: Alcohol-drenched culture needs to change.

    Many media outlets today have drawn attention to the alcohol influenced behaviour of Australian cricketers as they celebrated winning the International World Cup. At the celebration in Federation Square in Melbourne yesterday morning, the Australian captain Michael Clarke seemed to be proud of the fact that all the team members had hangovers.

    In the link below Michael Thorn, the chief executive of the Foundation for Alcohol Research and Education, in today’s SMH, draws attention to the influence  of the alcohol lobby,the alcohol consumption of the Australian cricket team and advertising. See link below.

    Michael Thorn comments that ‘It is time to roll back Australia’s toxic drinking culture. ‘

     

    http://www.smh.com.au/comment/icc-cricket-world-cup-alcoholdrenched-culture-needs-to-change-20150330-1mau4y.html

  •  John Menadue.  Improving health outside the health portfolio

    Ministers for Health in Australia are seen very largely as ministers in charge of health services rather than health. The fact is that some major issues causing poor health or which could be the means to improve health are outside the normal health portfolio.

    • Major health problems are caused by junk food, alcohol and tobacco. The Australian Institute of Health and Welfare tells us that tobacco smoking is the largest cause of preventable illness and death in Australia It estimated that in 2004/5 smoking related disease cost Australia $31.5 b. The AIHW also told us that in that year the consumption of alcohol was estimated to cost Australian society $15.3 b. The Director of the Alcohol Education and Rehabilitation Foundation said that the economic and social cost of alcohol was estimated to be $36 b p a. He added that about 30% of harm to children is caused by alcohol. The scourge of alcohol, smoking and junk food are best addressed through taxation and restrictions on advertising, particularly directed at children and not through the health portfolio.  The action by the Rudd /Gillard governments on plain packaging of cigarettes was the most important health reform in years.
    • Health improvement is made very difficult when the major sponsors of sport in Australia are interests associated with alcohol and junk food. Channel Nine’s cricket coverage with slats, heals and tubby has saturation coverage of alcohol and junk food. Australian cricketers and footballers line their pockets with money from alcohol and junk food companies. There is not much leadership or role modelling here They are complicit in promoting bad health habits and undo a lot of the good work on prevention. How can our sporting codes discipline players for excessive alcohol consumption, when the main sponsors of the codes are liquor companies?
    • Improvement in the health of indigenous people will mainly occur outside the health portfolio in areas such as employment, better diet, housing and education of young people together with reduced consumption of alcohol and drugs.
    • We know that because of social and economic disadvantage, the death rate for those with the lowest socio-economic status is 13% higher than the Australian average, and for those living outside capital cities it is 8%. Poverty is the principal cause of poor health in Australia. And the health portfolio has only a limited role in the fight against poverty
    • Education, childcare, including pre-natal, spacial planning, housing, trade (particularly relating to intellectual property in pharmaceuticals), population, transport, particularly for country people, taxation and social security, employment, justice and the environment, all have direct impacts on the health of Australians.
    • We are coming to appreciate how electronic health and the national broadband network offer great opportunities for improved health services, particularly for people in remote areas. But the NBN is not within the health portfolio.

    In short, the health Minister and his department must have expertise beyond ‘health services’ and particularly economic expertise in a joined-up government approach.  Unfortunately they usually rank well down the ministerial and public service ladder.  There is reluctance by policy makers to look on healthcare as an industry and to apply the normal evaluative mechanisms which are applied to other industries. Such a blinkered view allows the development of an idea that health should be exempt from the normal economic considerations of efficiency and equity. It’s a notion that pushes economic thinking to one side, in the erroneous belief that economics is intrinsically illiberal and dismissive of human welfare.

    For a country reviewing its healthcare industry, it is useful to take a broad view and consider the whole industry and not just that part of concern to the health portfolio…

    We keep pouring money into hospitals. We never seem to appreciate that like the family refrigerator hospitals will always be kept full. Health problems are best addressed first in primary care, prevention and often outside the health portfolio

     

     

  • Alex Wodak. Why is illicit drug use considered evil?

    It seems self-evident to many that the use of illicit drugs is evil. But why? When pressed, the most common response to this question is that illicit drug use is evil because it is against the law. So the next question is ‘why is the use of certain drugs illegal?’ State parliaments in Australia started banning the use of certain drugs even before Federation. In the last half century, Australia signed and ratified three international drug treaties (1961, 1971, 1988) which required domestic parliaments to pass laws imposing criminal sanctions on people who use or traffic drugs.

    In the late 19th century, opium became the first drug banned in Australia.  But opium was initially only prohibited if it was smoked. At that time, Chinese people on the goldfields were the only people in Australia smoking opium. The majority of Australians at that time had access to edible opium which remained lawful and taxed until it was prohibited in 1906. Edible opium is said to have remained readily available after the 1906 ban but the Commonwealth lost an annual income of £ 60,000.  Was opium smoking acceptable before it was banned and evil afterwards? Likewise, was edible opium acceptable until 1906 but did it only become evil afterwards?

    Australia was represented at the 1925 Geneva Convention on Opium and Other Drugs which agreed to ban the non-medical use of the opium, coca and cannabis plants and drugs derived from them. Accordingly, the Commonwealth Government banned the importation of cannabis in 1926 and requested the states to pass legislation banning cannabis. Victoria (1928), South Australia (1934), NSW (1935), Queensland (1937), Western Australia (1950) and Tasmania (1959) complied. If cannabis use in Australia is now evil, when did it become so? Was it evil when Prime Minister Tony Abbott, Communications Minister Malcolm Turnbull and former Prime Minister Julia Gillard used cannabis in their youth to become relaxed and comfortable? Was it evil when US Presidents Bill Clinton, George W Bush and Barack Obama used cannabis in their youth?

    Following international pressure, believed to have originated in the USA, Australia banned the production and importation of heroin in May 1953. Existing heroin stocks could be used medicinally till exhausted but could not be replenished. The decision to ban medicinal heroin was criticised at the time by the then Director General of the Commonwealth Department of Health, the Presidents of several Royal Colleges (Surgeons, Physicians and Obstetricians andGynaecologists) and the President of the British Medical Association (before the Australian Medical Association was established). So if the use of heroin is now evil, was it already evil when used medicinally before 1953 or did it only become so when used recreationally after it was prohibited?

    If the use of illicit drugs is not intrinsically evil, then we have to ask why their sale and purchase is evil?  The use of illicit drugs might well be unwise, even recklessly unwise, without such use constituting evil. Most members of the community will need little convincing that the injection into a vein of an unsterile powder of uncertain constituents and strength bought from a stranger is extremely unwise. But is it evil?

    In 1895, Oscar Wilde received a 2-year prison sentence with hard labour for sodomy. Alan Turing, who had contributed substantially to the Allied defeat of the Nazis in WW II and the development of computers, was found by a British court in 1952 to have had sex with another man. Turing committed suicide rather than face the consequences. Homosexuality was considered a crime when Wilde and Turing were alive although it has since been removed from the criminal code.  Same gender marriage is now lawful in the UK. Did Wilde and Turing commit evil acts even though today the same acts are no longer considered a crime? Queen Elizabeth has apologised for the way Turing was treated. It is not just the law and the community which has changed its view about the nature of homosexuality. In 1973, the American Psychiatric Association reclassified homosexuality as a lifestyle rather than a disease.

    A vigorous international debate about the effectiveness of drug law enforcement is now growing. Senior drug law enforcement figures now increasingly acknowledge the futility of efforts to restrict the availability of illicit drugs. But the real debate we should be having is about the fairness and justice of laws which criminalise the use of certain drugs (but not other drugs which create much more harm).

    In 2008, (then) Father Peter Norden noted that the gospel said ‘When I was hungry, you gave me to eat, when I was naked you clothed me, when I was in prison you visited me.’ Norden argued that “Jesus today would have included another couple of phrases, perhaps, ‘When you were mentally ill, you walked with me, when you were addicted, you stood by me. ‘ Not that you walked away from me or sat in judgement of me”. (http://www.abc.net.au/radionational/programs/encounter/faith-and-the-fix/3174376#transcript) Walking away from and judging people struggling with drug problems worked well politically for decades. But it has been a disaster for many people who use drugs, their families and communities. This doesn’t even begin to describe its impact on countries which have been the source of illicit drugs or through which such drugs have been transited.

    Whether or not our current drug laws are effective, or whether alternative policies might be less ineffective are important questions. But the most fundamental question we should be asking ourselves is whether our drug laws are fair and just.

    Dr Alex Wodak AM is President, Australian Drug Law Reform Foundation.

  • John Menadue. More problems with the Department of Health and Ageing.

    On 16 March, I drew attention to a Capability Review of the Department of Health and Ageing by the Australian Public Service Commission. It set out a very worrying analysis of the overall performance of DHA.

    We now have a report by the Australian National Audit Office of DHA’s administration of the Fifth Community Pharmacy Agreement (5CPA). The 5CPA is the fifth agreement which the Commonwealth Government has made to provide subsidised medicines to Australians who are eligible through the Pharmaceutical Benefits Scheme (PBS). This agreement is with community pharmacies across Australia.

    The Australian National Audit office points to major concerns about DHA’s administration of this 5CPA.

    It says ‘Six broad principles and objectives were included in the 5CPA. Limited departmental information plus shortcomings in DHA’s performance reporting and 5CPA evaluation framework mean that the department is not well positioned to assess whether the commonwealth is receiving value for money from the agreement overall, or performance against the six principles and objectives.’

    The report adds ‘Administration of 5CPA has been mixed … A number of key government negotiating objectives for the 5CPA were only partially realised and there have been shortcomings in key aspects of DHA’s administration at the development, negotiation and implementation phases. …’

    The report refers to shortcomings in the Department’s estimation methodology and that a number of the government’s strategic negotiating objectives were only partially realised.

    Like the Capability Review by the Australian Public Service Commission, this report by the Australian National Audit Office points again to the extremely worrying performance of the Department of Health and Ageing.

    The performance of the department on co-payments should not be a surprise to anyone.

    The long-time secretary of the Department of Health and Ageing has been promoted to become the Secretary of Finance.  John Menadue.

    See link below for full report.

     

     

    http://www.anao.gov.au/Publications/Audit-Reports/2014-2015/Administration-of-the-Fifth-Community-Pharmacy-Agreement/Audit-summary

  • Patrick Shanahan. Connecting the Mouth to the Body

    Why is dentistry not part of health care? 

    Most people cannot understand why the mouth is not included in medical management, especially since there is mounting evidence that oral and dental infection can cause medical complications that cost many times more to treat medically than prevent dentally.

    How did this happen?

    Dentistry separated from medicine over 500 years ago when the previously allied barber surgeons evolved into two streams, medicine and dentistry, and subsequently established independent schools to train doctors and dentists.   Not only is dentistry independent of medicine it is also privatised, self regulated, outside health care, and Medicare legislation (1973)excludes it, which,  as you will see, was a big mistake.

    Dental infections can cause medical complications  

    The connection between infection from the mouth and medical problems is not new. In the 1930’s, the ‘focal sepsis’ theory was in vogue. It proposed harmful bacteria could be swallowed, inhaled, or travel via the blood stream, to distant sites, and cause infection there. To prevent this there was an epidemic removal of tonsils, teeth, and appendixes. The theory gradually lost favour and was discarded, but has since re-emerged with medical research giving it credence.  Because of this, there is a clear distinction between what is non elective ‘medically necessary dental care’, and belongs in primary care, and what is elective ‘dentally necessary dental care’, which belongs in dentistry.

    Why should we make this distinction?      

    AIHW (2010) reported 1 in 2 Australians have private dental cover, which is a reliable indicator of use of dental services.  Most of the 8 million without dental cover have a chronic disease, a disability, or require care. So they are the highest medical and dental risk groups.  Herein is the problem.  GP’ frequently treat these patients, but dentists don’t.

    Indirect Costs

    Dental infections in these patients go undiagnosed and untreated and cause medical complications, which are treated medically, but not dentally. These INDIRECT costs are many times more than cost of preventing them, and add billions to health care costs.  If these INDIRECT were added to the DIRECT costs the disease that costs the most and affect the most people is dental disease, NOT heart disease. You’ll see why.

    Direct Costs

    The DIRECT costs for those using dental services are known.  In 2008-09, they were $7 billion (AIHW 2010), almost as much as heart disease, $7.7 billion. Individuals pay for 90% of that. These high costs reflect the increasing demand for expensive crowns, bridges, veneers, and implants, which are cosmetic, not health related.

    How much are the Indirect costs? Can they be avoided?  

    No one knows, but there is some useful US data.  The US has 120 million uninsured who do not receive any dental care. Increasingly they are accessing emergency rooms (ER’s) with acute dental problems. Although ER’s do not have any dental services, they can provide temporary relief with pain killers and antibiotics, but most of the uninsured cannot pay.  60% of US bankruptcies are for unpaid medical bills. Florida has a population approaching 20 million. It recently reported 139,000 visited ER’s with acute dental problems that cost $141 million, $1000 each.  They estimated a dental service by a dentist in a dental office would probably cost only $100. Instead of spending $141 million it would cost only $13.9 million. There is the saving, there is the solution.

    Another study by the US Institute of Health, Office of the Actuary (1988), investigated medical complications after surgery caused by untreated dental infections. It cost $100 million (10%) to treat the complications, but if there had been a dental assessment before surgery it would have cost only $16 million to prevent those complications. There is the saving, again the solution.

    The US subsequently introduced a limited Medicare dental scheme in 1998, but US dentists have never embraced it because the fees were inadequate and it did not include any restorative dentistry.

    These two examples clearly show the costs, the savings, and the solution.  The inclusion of an oral and dental assessment in medical practice and prioritising ‘medically necessary dental care’, and referring to a dentist. This immediately costs less, provides better health, saves money, and keeps patients out of expensive emergency departments and hospitals.

    A Japanese study into fatal broncho pneumonia in nursing homes found professional antibacterial l oral care reduced the number of fatalities.  Importantly, they also found the risk of fatal broncho pneumonia was just as high with those who had NO teeth or dentures as it was for those who teeth and dentures. The risk was NOT the condition of the teeth, but the uncontrolled bacteria inside on the mouth that collected at the back of the mouth and entered the lungs.

    The US estimates each hospitalisation for pneumonia cost $25,000. Preventing it might cost only $1 a day.

    What is this costing in Australia?

    There is no data. One can only make estimates.  AIHW estimates range from $10 million- $300 million.

    My estimates are very different as I have spent 25 years experience in aged care, mental health, disability, general practice, and indigenous health. AIHW statistics do not present the real picture.

    GP consults                                                      $10-100 million

    Emergency departments (ED’s)                   $50- 100 million

    Hospitals admissions                                     $400 – 1billion

    Aged care                                                         $1.4 billion

    These cost range from $2 – 2.6 billion. Based on demonstrated savings in the US, there might be potential  savings of $1-2 billion.

    Comments

    AIHW (2010) reported 80% of health expenditure is spent on treating chronic conditions, and 50% of hospital admissions are for treating chronic disease complications that are preventable. It therefore would not be unreasonable to assume many of those medical complications that are treated medically are caused by underlying untreated dental infections that remain untreated.

    Aged care costs are huge because mouth problems (not teeth related) such dry mouth, ulcers, thrush, mucisitis (inflamed soft tissues) affect eating, sleeping, swallowing. speaking,  which then lead to weight loss, digestive disorders, dehydration, constipation, behaviour changes, confusion, etc. The consequences are treated but the cause is not. That’s why it costs so much. This aspect  of health care has been sadly neglected.

    Action Plan

    If the GP is responsible for health care outcomes, they must be made aware of existing oral and dental infections that will affect their medical management.

    An oral and dental assessment therefore should be mandatory in health care, carried out by a dental resource specifically trained for health care (Bachelor of Oral Health), have a dental background, and included in the allied health team.

    Medicare legislation should be amended to include an oral and dental assessment, prevention, and education, facilitating referrals for ‘medically necessary dental care’, which is carried out by participating dentists/therapists (?) all covered by Medicare. This would include inexpensive intermediate dental restorations, extractions, and scaling and cleaning.  These costs, as has been shown, are many times less than what is currently spent and wasted, it would put high risk patients in safe mode preventing future disease and complications.

    As shown in Japan, more effective oral care practices should be adopted and covered by Medicare.  Since the objective is to reduce the bacterial load and prevent disease, the use of antibacterials is mandatory. Toothpastes have no antibacterial effect and often  make sensitive mouths worse.  Health care related oral care needs should be managed and monitored in health care as part of their ongoing medical management, not in dentistry.  The products should be covered as medical items as those who need these can least afford them. The costs of prevention are many times less than treatment.

    Beyond general practice, a lot also needs to be done.  There are NO oral health services in HACC, young disabled, mental health, spinal units, head injured, or homeless. Palliative care is an area that needs urgent attention as does intensive care, cancer patients, and those in neuro science wards in hospitals.

    Priority

    This is not just about health care and costs. What are lacking are compassion and empathy and a focus on personal needs that translate into quality of life, self esteem, dignity, and comfort.

    If this was to happen, Australia could have the best health system in the world and one which would be the global benchmark.

    Dr Patrick Shanahan BDSc(WA)DipPH(Syd) Oral Health Consultant   

    Clinical dentistry 1961-82: Public policy 1983-2015. Aged Care Legislation (1988, 1995) MCDDS (2004) AMA(WA)COGP Ministerial  Submission for Inclusion of Oral Health in Health Care.

     

     

     

     

  • Stephen Duckett. Frequent flyers in health and the way we remunerate doctors.

    Time for policy rethink as frequent GP attenders account for 41% of costs.

    The Commonwealth government’s big idea for primary health care in the past year was to charge everyone who visits the GP a A$7 co-payment. The idea had many problems – it could have led to a blowout in emergency department demand; it was inequitable; and itmay not have worked anyway. It has finally been abandoned.

    The failed policy betrayed a simplistic belief that all patients are basically the same. The government thought all patients should make a co-payment and all would respond to it in the same way. Eventually, the government decided to exempt some people, but even then, patients were only divided into two categories.

    A new report from the National Health Performance Authority, released today, shows that all patients are not equal. It divides GP users into six groups:

    • Very high attenders, who had 20 or more visits to a GP in 2012-13
    • Frequent attenders (12 to 19 visits)
    • Above-average attenders (six to 11 visits)
    • Occasional GP attenders (four to five visits)
    • Low GP attenders (one to three visits)
    • People who did not attend a GP at all in 2012-13.

    The very high attender group comprises just 3.8% of the population but consumed 17.7% of Medicare out-of-hospital expenditure (see the graph below).

    On average, each of these very high GP attenders accounted for A$3,202 of non-hospital Medicare expenditure in 2012-13, compared to an Australian average of A$690.

    By grouping together the very high and frequent attenders, we see that 12.5% of the population were responsible for 41% of Medicare out-of-hospital expenditure.

    Frequent and very high users account for 41% of the costs

    GP visits are non-referred Medicare-funded patient-doctor encounters. Data are for 2012-13. National Health Performance Authority

    As well as being responsible for a large share of total costs, people who visit the GP more often are more likely to live in the most disadvantaged areas, and to report being in poor health.

    A conventional measure of quality is care continuity – that a patient sees the same doctor regularly rather than shopping around. Very high GP-attenders saw an average of 4.8 GPs in 2012-13. More than one-third of them (36%) saw five or more GPs.

    Seeing so many different GPs can lead to duplicated tests and treatments, which might help to explain why the frequent GP visitors got so many tests and referrals to specialists. On average, referrals to specialists, x-rays and pathology tests by these people were almost 50% higher than their spending on GPs. Frequent GP visitors spent A$906 on GPs per head, and A$1356 on other services.

    What does this mean for health policy?

    The National Health Performance Authority report clearly shows why one-size-fits-all thinking in health care policy development isn’t good enough.

    People who see the GP most often tend to have more health problems than low-attenders and a greater level of disadvantage. But the original A$7 co-payment policy applied the same set of incentives to both groups. The A$5 rebate reduction was barely more nuanced.

    The next generation of health policies should respond to complexity and diversity, not pretend it doesn’t exist. Does the system work for all kinds of patients? Which patients are getting costly care that doesn’t benefit them? By asking these questions, we can uncover how to improve the quality of care while also saving money.

    People who see the GP every two weeks probably need better co-ordination of their care. They might also need a different team of health care workers helping them.

    For many frequent GP visitors, the traditional model of paying doctors a fixed fee per visit isprobably wrong. Instead, part of a GP’s payment should be for helping a patient draw on the right mix of appropriate, effective and efficient care. That might include support to manage their own care better, getting regular advice from a pharmacist or nurse at short notice, maybe online, and seeing the GP less often.

    Differentiating among types of patients can lead to better policy. So can distinguishing among types of providers.

    Previous Grattan Institute work has found that some hospitals have extreme, unjustified costs. Despite this, little is done to rein in these costs – hospitals that run a deficit are often treated much the same as those that manage their costs well. The funding and management of hospitals remains fairly one-size-fits all, despite huge variations in efficiency.

    Our upcoming work will show that different hospitals also vary widely in whether or not they provide ineffective treatments. Once again, we can do a lot more to distinguish the best hospitals from those that have serious problems and to manage them differently.

    The National Health Performance Authority report is a reminder that we have more information than ever about patients, just as we do about providers and treatments. We should make the most of it by looking at how these patients, providers and treatments differ and what that means for policy.

    Stephen Duckett is Director, Health Program at Grattan Institute.

    This article appeared in today’s The Conversation.

  • Kerry Goulston. Two health reform issues.

    Instead of tinkering around the edges of Health Reform in Australia,and dodging meaningful revision of the Medical Benefits and Pharmaceutical  Benefits Schemes,  all Federal politicians and leading clinicians could be debating two issues which would have significant effects over the next 20 years.  Currently thousands of clinicians (doctors, nurses, allied health and other healthcare providers) are despairing of meaningful healthcare and workforce reform  by our Federal and State politicians.

    Remuneration

    It appears that, over recent years,  other countries have been looking at widening the choices of remuneration to healthcare providers.  Why is Australia not doing so?

    The US Secretary of Health and Human Services wrote an article earlier this month in the New England Journal of Medicine on “ Setting Value-Based Payment Goals “ .  She was building on  health reform initiatives  suggested by clinicians and health economists.   They stressed that the current US system was too expensive and out of date.  She put forward a plan to have 90% of all Medicare  fee-for service  payments  and  50% of Medicare payments tied to quality or value through alternative payment models by the end of 2018.   Suggested alternative payment models included accountable care organizations and bundled-payment arrangements.  She outlined three strategies. First incentives  to reward hospitals and healthcare providers  for delivering high-quality  patient care with  advanced primary care medical-home models and introducing new models of  bundled pay for episodes of care .    Second, greater integration of practices and greater co-ordination among providers with more attention to population health. Third, a greater adoption of electronic health records (EHR)—although she states that in the US  78% of physicians and 94% of hospitals  now use them.  She also stresses a greater commitment to transparency  of data on costs of healthcare services to enable consumers to make  better informed choices when selecting providers.

    New Zealand has, for some years, moved away from fee-for-service alone to include universal capitated funding, patient co-payments and targeted fee-for-service for specific items.

    The French Minister of Social Affairs and Health writing last year in the Lancet talked of remuneration reform.   She wrote that because of evidence of substantial and increasing health inequalities, the payment system to providers had been reformed, inter-disciplinary team practice fostered  and health information strengthened to help consumer choice. Alternative models to FFS included  capitation and incentives to providers to avoid unnecessary care and higher valued services.

    Who would look at these options in Australia?  Our politicians and health bureaucrats  have singularly failed to do so.  Perhaps we need an independent body?

    Healthcare Reform Commission

    Increasingly there are calls to establish an independent, professional and ongoing body to advise the Australian community  on long- term  issues in healthcare reform.  Such a healthcare reform commission  would need to be completely independent like  the Reserve bank. It could look at  and advise on many major health problems.  John Menadue  suggests a pilot joint Commonwealth/State initiative  to end the dichotomy of funding  between the two administrations which  encourages cost-shifting.

    In Australia  we are blessed with outstanding  public health academics, health economists and leading clinicians. They could lead us  into a sustainable future, gaining the support of clinicians and the public.

    Kerry Goulston is Emeritus Professor of Medicine at Sydney University.

  • Wayne McMillan. Contemplating our Navels and Fiddling while Rome burns

    We have become so self-absorbed that we have little time to think about anything else. We live also in an age of info trivia worship that has become a new art form. Australians have become preoccupied with keeping up with the Jones than helping their next door neighbour. The craving to possess the latest info trinket that promises to give you the latest thrill in techno satisfaction is almost insatiable.

    The irony is that our hip and info savvy generation appears so disconnected from the real world and unhappy. We are connected emotionally and socially only to our   immediate family and friends. The yearning for more on-line games, info gimmicks and toys hasn’t satisfied a deeper need. Depression among our youth and young adults is rampant and private household debt NOT public debt has reached very high levels.

    So where do we go to gain a deeper and meaningful understanding of life, is it sport, the pub or club, music or conventional religion? Perhaps, but more people are turning to pop science/psychology, self-help TV programs, New Age gurus or  become Game of Throne or World of Warcraft junkies. If we are detached and isolated socially, we may even join a dangerous, destructive, cult.  The search for a way out from the madness of modern life can also lead us to an obsession for self-improvement or suicide.

    The individualistic, positive feel good culture and self-obsessed, self-actualisation society has reached epidemic proportions in most Western nations. The gurus of self-improvement from Anthony Robbins to New Age navel gazers are promising life changing experiences if only you follow their prescriptions for a new life. Many New Age gurus have taken out of context, some of the traditional spiritual practices from Western or Eastern religions that eventually don’t deliver lasting satisfaction.

    Therefore life just becomes one big techno-gimmick game or a constant search for a new form of personal self-actualisation. The important public issues in life are trivialised and we become like mice on a treadmill lusting for more and more new forms of entertainment.

    It is true that we need to love and respect ourselves before we can love and respect others, but no society has ever survived that became so self-absorbed that it lost touch with reality. We face climate change, environmental degradation of our natural resources, inequalities of wealth and income, housing crises in major cities like Sydney and Perth, growing poverty in outer suburbs of our capital cities and major challenges about employment creation for the future.

    We can decide that we have a moral and social responsibility beyond the boundaries of family and friends and somehow this helps us to realise that we live in a connected global village, locally and internationally. The level of volunteering in Australia has never been lower and community needs have never been higher. Isolated and lonely people among the young and old are just down the road from us. A smile a good day or even the sharing of a meal can make such a difference in someone’s life. Local councils need volunteers for environmental community programs, youth clubs need volunteers to work with young people. These are the activities that give meaning to lives.

    So we have choices we can amuse ourselves with our info games, or contemplate our navels, or start to relink with our community, in a myriad of ways. If we don’t reconnect, we will be amusing ourselves to death while our children and grandchildren watch Rome burn.

    Wayne McMillan is an ordinary, concerned citizen living in Whalan NSW. He has discovered over 30 long years that any lasting social change only happens when individual change starts first.

     

    (See Beyond the Myth of Self-Esteem: Finding Fulfilment by John Smith with Coral Chamberlain.Acorn Press)

  • John Menadue. Private health insurance and funding a Medicare Dental Scheme.

    In this blog I have written extensively about the damage that private health insurance (PHI) is doing in Australia. We are sleep-walking into a US style health disaster.

    If people want private health insurance, that is their right, but I see no reason why the taxpayer should subsidise a socially divisive and nationally damaging subsidy.

    The damage of PHI is increasing year on year. In my most recent blog on the subject at the time of the last annual increase in PHI premiums, I pointed out that since 1999 when John Howard introduced the subsidy on PHI, overall prices have risen by only 50% but PHI premiums have risen by over 150%.

    PHI has many damaging consequences and risks

    • It threatens our universal health system through seriously weakening the ability of Medicare as a single funder to control costs. We have seen the enormous damage that PHI has wrought in the US. We are steadily going down the same dangerous path. On present trends, we will have a divided healthcare system. One system will be for the wealthy with a safety net system for the indigent.
    • Private health insurance not only weakens Medicare, but in itself it does not have the market power to match the power of health providers who hold all the cards.
    • It favours the wealthy who can jump the public hospital queue by going to private hospitals.
    • It penalises country people who have limited access to private hospitals.
    • It has administrative costs three times higher than Medicare.
    • It has made it extremely difficult for public hospitals to retain specialists who are attracted to remuneration which is often at least three times higher in private practice and private hospitals.
    • There are government-supported trials in Queensland to extend coverage of PHI to general practice.
    • Medibank Private is pressing for PHI holders to get preference in emergency departments.

    I could go on, but I have said much of it before. We are really sleep-walking into an American style health disaster.  The future of Medicare is at stake, but the ALP which was the proud founder of Medibank/Medicare doesn’t seem to care.

    And the cost of the taxpayer subsidy which I had previously estimated at $7 billion p.a. is now approaching $10 billion p.a.  This is middle-class welfare writ large.

    Let me explain how this figure of $10 billion is calculated:

    The cost of PHI.

    Direct outlays on PHI from Budget Paper 1, 2014-15

    2013-14               $5.977 b.
    2014-15               $6.302 b.
    2015-16               $6.565 b.
    2017-18               $7.187 b.

    But there’s more! The rebate is essentially tax-free income for those who get it.  So, under the tax expenditures statement in Budget Paper 1 is the line item:

    “Exemption of the private health insurance rebate, including expense equivalent”:

    2014-15               $1.510 b.
    2015-16               $1.600 b.
    2016-17               $1.650 b.
    2017-18               $1.690 b.

    Adding these together you get:

    2014-15               $7.812 b.
    2015-16               $8.165 b.
    2016-17               $8.523 b.
    2017-18               $8.877 b.

    To this should be added the benefit of exemption from the Medicare Levy Surcharge.  That calculation, based on ATO tax tables takes some time to do and requires some assumptions to be made.  Last time I looked, quite a few years ago, it was more than $1 billion.

    We get up to about $10 billion, and that’s before looking at the inflationary effect of PHI which, if the experience of USA (and other countries) is any guide, dwarfs such budgetary expense.

    A quick back-of-the-envelope calculation using Australian Institute of Health and Welfare (AIHW) figures illustrates the point:

    In 2012-13 Australia’s total health expenditure was $147 billion.
    This was 9.7$ of GDP.
    In the USA (in 2012) it was 16.9% of GDP.
    Add another 7.2% of our GDP ($1.583 trillion in 2013-14), and
    You get an additional $114 billion.

    We are talking big money.

    It’s hard to get health ministers or health department public servants to think this way, however. The former minister, when questioned about total expenditure (government and non-government) on services within his portfolio couldn’t even give a rough answer.  I suspect the same would go for any minister. The concern of ministers is only what passes through their own budgets.  Public attention is directed from the public purpose to fiscal performance – ‘a triumph of finance over economics’.

    A MEDICARE DENTAL HEALTH SCHEME

    I am usually reluctant to propose cuts in one area of government expenditure to finance a new area. But I do believe that the future of Medicare is at stake if the expansion of taxpayer-subsidised PHI continues.

    Abolishing this $10 billion middle-class subsidy would carry risks considering the powerful PHI lobby and the associated private hospitals that are large donors to the Liberal Party, like Ramsay Healthcare. For this reason I propose that the PHI subsidy currently of $10 billion p.a. and growing should be abolished and the savings used to fund a Medicare Dental Scheme.

    Dental Costs

    I have assembled the table below from the latest AIHW data.

    Recurrent expenditure on dental services 2012-13

    Commonwealth
    Department of Veterans Affairs                  $100 m.
    Other                                                                        $843 m.
    PHI premium rebates                                     $606 m.

    Total Commonwealth                                   $1549m

    Total State                                                       $657 m.

    Total government                                                                       $2.206 b.

    Non-government
    PHI net of rebates                                          $1.396 m.
    Individuals                                                          $5.066 m.
    Other                                                                     $73 m.

    Total non-government                                                              $6.499 b.

    TOTAL expenditure                                                                                         $8.705 b.

    Those figures are a couple of years older than budget figures.  But, as a rough estimate, the Commonwealth government’s expenditure on PHI and the individual expenditure on dentistry would about balance.

    Would it result in increased demand – probably, to the extent that there is a price elasticity effect?  I doubt if there would be much by the way of “supplier induced demand” however. Unlike other health services in that regard, dentistry is different but there would need to be some constraints on public expenditure for example on cosmetic dental work.  The introduction of a dental scheme would need to be carefully phased in to take into account the availability od dentists and support facilities.

    Abolition of the $10 billion tax-payer funded subsidy to PHI would clearly be enough to fund a Medicare Dental Scheme.  To me that would make very good policy and perhaps even some political sense.

    I assume that Bill Shorten is keen to preserve the great Labor monument, Medicare. If he also wants to differentiate his health policy from that of the Coalition, the abolition of the PHI taxpayer subsidy to fund a Medicare Dental Scheme could be just what he needs.

  • John Menadue. A capability review of the Commonwealth Department of Health and Ageing (DHA)

    In this blog I have raised many times my concerns about the major shortcomings of DHA and the barrier it presents to improved  health policy and programs… We saw it most recently over the GP co-payment. I  argue that the ministerial/departmental model in health has failed and needs review…

    Since 2011 the Australian Public Service Commission ( APSC) has conducted  a series of capability reviews of Commonwealth agencies. Late last year it  released its capability review of DHA.  It highlighted many problems in the Department. These include

    • The department is ‘hierarchical and siloed’.
    • ‘The department does not have a high level strategic policy framework to support the development of coherent policies and programs …’
    • ‘The department needs to better connect sources of evidence across the organisation to support the development of a high-level whole of health system view to inform and guide the department’s advice … Policy discussions are largely constrained within work siloes.’
    • There is ‘a sense of reluctance from the department to consider new or changed policy direction … It seems likely that the department’s lack of high-level strategic policy direction is hampering policy and program agility.’
    • ‘Decision making within the department has been largely centralised at senior levels’ … ‘The department’s governance arrangements appear disconnected.’
    • ‘External stakeholders, including agencies across the APS reported they have experienced the department as increasingly insular and often outwardly defensive.’
    • ‘Some senior departmental employees noted the need to ensure that junior officers are not captured by stakeholders.’

     

    THE SUMMARY ASSESSMENT of DHA by the APSC follows

    The Commonwealth Department of Health plays an integral role in the development of health policies and the administration and delivery of health programs, to support improved Australian health outcomes.

    Over time the department’s role has changed, with functions such as sport and ageing moving in and out of the organisation through successive Machinery-of-Government changes. Nevertheless, the department’s core purpose of responding to national health trends, risks and emergencies has remained fairly consistent since it was established in 1921.

    Australia’s health delivery responsibilities are distributed between the Commonwealth, state and territory jurisdictions and the private sector. By necessity, the department regularly interacts with its state and territory counterparts, industry and the non-government sector in its pursuit of health outcomes. The significant involvement of the private sector in the health system requires a high level of commercial acumen in the department in order to understand the business drivers and market forces that influence decisions made by the private sector.

    The department operates in a complex and fluid environment, both because of its role in the health system and as an agency within the broader APS. In this context, the review team found that the department needs transformational change to develop the agility and capability required to operate strategically and contemporaneously.

    The department takes pride in its record of delivery, with 94 per cent of key performance indicators reported as met in its annual report. However, in the context of shifting roles and relationships in the federal health system, combined with a policy of smaller government, it is highly feasible in the future that the department will be less engaged in service delivery and more in health-system strategy. This will require a shift in the department’s capability profile and in the way people work together.

    In recognising the department’s capability strengths the review team also identified the following five overarching themes for capability improvement:

    • prioritise focus on organisational culture and people leadership
    • develop a high-level organisational and policy strategic capability
    • address inadequate governance arrangements and delivery frameworks
    • foster a culture that appropriately embraces and manages risks within defined tolerances
    • Lead purposeful engagement and partnership with external stakeholders.

    These themes are consistent with the almost 1500 free-form suggestions for change made by departmental employees in the 2014 APS Employee Census (the Census). These suggestions focused on the need for improved leadership and management, communication, training, skills, change and performance management.

    The following sub-sections provide further explanation of the review’s overarching findings.

    The department’s strengths

    Most employees interviewed during this review expressed deep sense of pride in, and commitment to, helping improve Australian health outcomes. They also expressed strong motivation and alignment with the department’s vision of ‘creating better health and wellbeing for all Australians’. The review team heard that the department’s high level of employee commitment has served it well in its pursuit of what has often been a voluminous policy agenda.

    The department has many highly capable employees, with deep subject matter expertise and a well-educated workforce (67 per cent of employees have university qualifications compared to 60 per cent across the APS). The department employs highly credentialed medical officers and other professionals with relevant health qualifications to help inform internal policy and program decisions. It has access to rich data repositories, is developing an Enterprise Data Warehouse and is working on a broad e-Health program which has the potential to strengthen the department’s platform for evidence-based approaches to policy development.

    Throughout the review, employees consistently noted that a central aspect of the department’s culture is its focus on delivery, especially at the tactical policy and program level. Similarly, the review team heard that employees and business areas across the department have effectively and consistently delivered on urgent work in short timeframes.

    The department is widely recognised for its ability to deliver the initiatives and reforms required of it by Government. Examples include the tobacco plain packaging strategy—an international first to reduce smoking levels—National Health and Hospital Reform, and reforms to mental health and aged care. The department has, over many years, also implemented policy ideas across a broad range of areas to improve health outcomes in Australia and internationally. These include reforms to ensure the sustainability of the Pharmaceutical Benefits Scheme, increasing private health insurance coverage rates, e-Health initiatives such as the Personally-Controlled Electronic Health Record (PCEHR), and enabling more sophisticated debate around health productivity. The department has demonstrated its ability to implement organisational change in response to external pressures such as the 2010 Strategic Review and its more recent internal changes aimed at realising improved financial efficiencies. Employee confidence in the department’s ability to manage change has also improved, up by seven percentage points from 2013, with 2014 Census data reporting that 50 per cent of employees believe senior leaders effectively lead and manage organisational change, compared to 52 per cent in like policy agencies.

    External stakeholders recognised the department’s track record of mobilising and working with public service agencies across jurisdictions and other external stakeholders to help lead the national response to domestic and international health risks and emergencies. Similar to its national efforts, the department is recognised for its positive contributions and leadership role in the international health arena.

    Until recently, the department has been led by Ms Jane Halton PSM, a respected and long-term Secretary who left to take up her appointment as Secretary of the Department of Finance before the start of this Capability Review. The review team heard that the former secretary provided clear task and policy direction for the organisation and was recognised by employees and external stakeholders for her in-depth knowledge of the health sector. Ms Halton also played an important role in her interactions with the World Health Organization, including as the chair of the World Health Assembly in her final year with the department. Ms Halton was instrumental in leading national and international health reforms and provided a strong profile and an identity for the department.

    The department needs an increased focus on organisational culture and people leadership

    The review team found that the department will need to undergo significant cultural change to develop a greater focus on people leadership and capability development.

    Throughout the review, employees described the department as strongly focused on tactical delivery and issues management with limited acknowledgement of the toll its ambitious work program had on employees. Most Senior Executive Service (SES) employees advised the review team that they work excessive hours, with many noting an average of more than 80 hours a week, substantially in excess of the reported APS Employee Census data. Executive Level (EL) 2 employees reported to the review team that they also regularly work long hours, with most volunteering that they have no desire to progress to a senior leadership position due to concerns about a further anticipated diminution of work–life balance. Evidence before the review indicated that much of this workload was attributed to inefficiency of systems and processes, duplication and rework, which all lead to significant resource and capacity waste.

    Employees and external stakeholders regularly noted that the department lacks sufficient focus on the contribution of highly skilled people to its achievements. While some individual leaders were recognised for their focus on people leadership, the review team found that the broader department has not sufficiently invested in the development of its culture, in line with high-performing organisations. Contemporary research is clear: when an organisation’s culture lacks a sufficient focus on people this can lead to a decline in productivity, negative external perceptions and the eventual devaluation of the organisation.1

    Despite the efforts of the former secretary to break down silos, most employees and stakeholders described the department as hierarchical and siloed. The review team heard a strong desire from some employees for consistent communication and greater leadership visibility. This is supported by Census data, which reported that 51 per cent of employees perceive that senior leaders are sufficiently visible, compared to 57 per cent in like policy agencies.

    The review team found strong emphasis on contributions of ‘the individual’ over collective collaboration. Employees commented that there is a lack of a sense of a united leadership ‘team’ and a lack of whole-of-organisation ownership from employees and leaders with a strong corporate versus policy–program–regulatory divide.

    The review team regularly heard evidence from employees and external stakeholders of a culture of ‘inappropriate’ behaviour in some areas, including bullying and harassment. The 2014 Census rate of 19 per cent compares with an average 15 per cent in like policy agencies. The relatively high reported rate of bullying in the Census does not correlate with the data held by the department on formal complaints about inappropriate behaviour. The department has acknowledged that this is an issue and has implemented a targeted communications campaign to encourage employees to report inappropriate behaviour and seek support.

    A number of employees reported a need for greater transparency regarding SES placements and performance pay. Many senior employees commented that they received no input into or rationale regarding their placement to a position, with many in long-term acting positions. Others advised that they had received a telephone call only days before a move with no accompanying explanation.

    APS Census data in 2014 reports on the climate of workplaces by considering the demands placed on employees and the control employees have in relation to these demands. Figure 7 plots the distribution of departments. Those in the lower right-hand quadrant represent employees experiencing the highest demand and lowest control in relation to workload. In relative terms, the department, represented in ‘red’, is a high-strain workplace. Evidence demonstrates that high demand–low control workplaces face an elevated risk of ill health among employees.

    The department needs to develop a high-level organisational and policy strategy

    The department has an ambitious, noble and compelling vision that employees aspire to achieve. But it is not clear how the department’s vision is translated through organisational strategy to inform structures, priorities, resource allocation, workforce planning and performance measurement and reporting. Organisational strategy is also needed to map how the department is going to increase its influence and where it will invest.

    The review team found that the department has a view that the Government does not welcome or value strategic policy, which contradicts the evidence provided. The department does not have a high-level strategic policy framework to support the development of coherent policies and programs that are guided by and support a single strategic intent.

    The department needs to better connect sources of evidence across the organisation to support the development of a high-level whole-of-health-system view to inform and guide the department’s advice in an increasingly contested policy environment. The department has established a Strategic Policy Unit to provide a system-wide and strategic policy capability, however policy discussions are largely constrained within work silos. The review also found limited evidence of horizon-scanning or internal discussion on whole-of-health-system policy.

    The forthcoming White Paper on the Reform of the Federation, the consequences of the Williams II High Court decision, and broader government health and economic policy decisions have the potential to change the department’s role within the Australian health system. While the department is providing input into these processes, the views expressed by external stakeholders, and by some within the department, is that greater internal consultation and connection is needed to leverage expertise and draw on policy ideas from across the department in order to provide the best advice to the Government.

    Internal and external comments to the review team also highlighted a sense of reluctance from the department to consider new or changed policy direction. While there are many examples of the department using evidence to inform policy and decisions, the review team also heard examples where new evidence did not result in a change of policy or program direction. It seems likely that the department’s lack of high-level strategic policy direction is hampering policy and program agility.

    Internal and external stakeholders described the department’s desire to maintain existing work programs, with ‘trimming around the edges’ and a limited appetite for decommissioning work. This has resulted in a lack of agility in resource allocation. The department’s current budget re-basing exercise is, in part, recognition of the need for greater flexibility in resource allocation. The review team found that greater alignment of work programs through strategy, combined with more analysis of the comparative return-on-investment in the health system, could assist the department to prioritise work activities and provide policy options to the Government.

    There is an urgent need to address inadequate governance arrangements and delivery frameworks

    Decision making within the department has been largely centralised at senior levels, with a number of senior leaders being described by employees and stakeholders as exercising a command-and-control leadership style. While this approach may be appropriate in responding to a crisis or national emergency, the review found that its application in day-to-day management has resulted in the disempowerment and poor use of its workforce, reinforced vertical silos, limited corporate ownership and potentially hampered innovation.

    The department’s governance arrangements appear disconnected, which may be a function of their design. The accountability relationship between some committees and the Executive is unclear, with some areas (such as audit and risk) assuming greater prominence on the executive-leadership agenda than others. Minutes of meetings provided to the review team indicated that the department’s People and Capability Committee has met only once in the past 12 months.

    The review team identified a number of people, system and project risks that have not been sufficiently documented through risk frameworks or identified through internal or external audits or management reports. The department needs to review its internal governance and accountability arrangements to ensure decision-making frameworks are fit-for-purpose.

    Throughout the review, employees often commented on significant inefficiencies in the department’s operations due to internal workflows, especially regarding clearance and coordination processes. The review team found that the department would benefit from streamlining internal workflows, further delegating responsibilities and ensuring that people at all levels are appropriately empowered. This shift would also help refocus SES time from detailed management to leadership and strategic matters.

    Additional financial investment is required to modernise and ensure the department’s information and communications technology (ICT) environment is secure and fit for purpose. While the department is acutely aware of the shortcomings and associated risks of its ICT systems, resolving this to an appropriate standard will likely require accelerated, concerted and sustained focus.

    The department needs to foster a culture that appropriately embraces and manages risks within agreed tolerances

    The review team regularly heard examples of risk aversion, tight control of information, micro-management, elevated decision making and an excessive focus on issues management. This approach, coupled with a reluctance from a number of employees to report potential risks or mistakes due to fear of being blamed for failures, has created ‘blind spots’ to risk exposures, disempowered people, increased residual risk and stifled innovation. Employees provided the review team with examples where red traffic lights were not placed on management reports until risks were quite advanced as they felt that bad news would not be welcomed, and they would be better off trying to mitigate risks rather than report them.

    Employees regularly commented to the review team about personal fears of making a mistake, with some commenting that the department ‘does not make mistakes’. The review team found a variable understanding of, and sophistication regarding approaches to, managing risk. This is compounded by risks being elevated or escalated to the Executive to manage.

    The department needs to engage with a broad range of risks on a daily basis. Due to the scale and complexity of its operations, it is inevitable that some risks will eventuate, regardless of mitigation efforts. Significant work is needed to change the department’s cultural appetite towards risk and acclimatise all levels of the department to embrace and engage collectively to manage risk as appropriate.

    The department should lead more purposeful engagement and partnership with external stakeholders

    The department maintains good relations with a number of external stakeholders, particularly when those relations have been managed at the most senior levels. The former secretary was highly respected by the majority of external stakeholders for her knowledge of the health system and her capacity to steer solutions to difficult issues in national and international fora. Many stakeholders also commented on the good relationships maintained with individual departmental officers at lower levels.

    However, a majority of external stakeholders, including agencies across the APS, reported they have experienced the department as increasingly insular and often outwardly defensive. Stakeholders often commented on the difficulty in interacting with the department compared to other APS policy departments which were seen as much more open, though still professional and able to manage competing interests.

    The review team heard from external stakeholders from across the broader APS, and the health portfolio and sector, that they would like to develop stronger, more collaborative relationships with the department. External stakeholders often noted that they understand the department is not always able to be open with them in a timely manner, or to cater to their views. Still, they perceive the department’s approach to consultation as excessively risk averse, narrow and at times perfunctory.

    Some senior departmental employees noted the need to ensure that junior officers are not ‘captured’ by stakeholders who can often be quite influential in their advocacy for a certain policy position. This has led to a rotation of employees or the management of relationships at senior levels in the department.

    In an increasingly contested policy environment, the department needs to ensure it adequately captures the views of stakeholder groups who often hold positions of authority and influence within the community. Incorporating a broad range of external policy perspectives into the department’s advice remains crucial to its continued position as a trusted and key policy adviser to the Government.

     

    Note that the former Secretary of DHA is now the Secretary of the Department of Finance,

     

  • Michael Gracey. Risks of Closing Remote Aboriginal Communities.

    Forced dislocation from traditional homelands in the late 1960s and early 1970s made many Aboriginal families and groups move, for the first time, to small towns in the north and north-west of WA. This drift to strange environments with access to alcohol and living close to people from different backgrounds, languages and alien beliefs and behaviours, had dire and long-lasting social consequences as well as negative impacts on health and well-being and contact with the police. This came with a price to the general community as well as to those who were displaced.

    The controversial proposal by the Federal and WA governments to close or remove essential services from dozens of small Aboriginal communities in WA’s remote north runs a real risk of repeating the mistakes made 40 years ago. Some Indigenous people in such communities have not experienced life beyond their traditional homelands, some of these people have limited English language skills, maintain their ancient customs, beliefs and rituals, and many have never been exposed to alcohol. The inevitable drift to towns or their fringes that would follow this forced, abrupt change to their way of life will bring immense pressures on them. This will expose these internal refugees to the real risks of an alien environment and almost certainly bring harmful impacts to their well-being in social, emotional and health terms. As with the disaster of 40 years before there would be real costs to the governments and a need for public services to manage the mess.

    If the governments’ proposal goes ahead, these risks and their consequential costs must be assessed very carefully beforehand in an open, consultative process. If this does not occur, the harm that follows will undoubtedly bring a savage and long-lasting backlash. It could also further tarnish Australia’s reputation wider afield in its record of handling issues affecting the First Australians.

    Michael Gracey AO is a Paediatrician who has worked with indigenous people, communities and organisations for over 40 years, particularly in the far north of WA. He was Principal Medical Adviser on Aboriginal Health in the Department of Health in WA for more than a decade and was Australia’s first Professor of Aboriginal Health at Curtin University in Perth. He has also been President of the International Paediatric Association.

  • Julia Davison. It takes a nation to raise a child.

    The week after Australia Day each year, around 260,000 five-year old Australians start school. Of those, almost 60,000 children – 23 per cent – will start school developmentally vulnerable in some way. Children who start school behind often stay behind, and are likely to finish school with skills and competencies that have not equipped them for the workforce or future life. The economic and social costs can be profound and long lasting.

    The first five years of a child’s life are when most of their brain development occurs. It is a period when children are most open to learning and when the foundation stones for future learning can be laid. According to Nobel Laureate James Heckman, it is a period when the biggest returns on investment in education can be achieved.

    Around the world, nations are investing more in the early years as a means of improving the ongoing learning capacity of their future workforce. As nations increasingly compete on the quality of their human capital, they recognise the vital national public interest in having an ‘all hands on deck’ economy when facing an ageing population and declining levels of workforce participation. In this global race to build human capital, Australia can no longer afford to leave 23 per cent of its future workers behind at the starting block of school entry.

    Access to quality early learning has been demonstrated in numerous studies to provide the greatest benefit to the most vulnerable children. Yet these children are the least likely group to access quality early learning, often due to cost barriers.

    Quality early learning provides more than mere child minding. Quality early learning involves qualified professionals delivering age-appropriate play-based programs. Quality early learning magnifies children’s development, their social competency and their resilience, and is very much in the public interest. A study of 2000 Australian children found that those who attended a quality preschool with a degree- or diploma-qualified teacher achieved around 30 points higher on their Year 3 NAPLAN tests. A long-running study tracking 3000 English school children, now up to age 16, found that children who had attended more than 2 years of quality preschool finished their GCSE examination (Year 10) with scores on average around 51 points higher than those who did not. This represents the difference between getting 8 GCSE at ‘B’ grades versus 8 GCSE at ‘C’ grades.

    Reflecting the overwhelming case for the importance of quality early learning, the commonwealth and all 8 state and territory governments agreed to a landmark National Quality Framework (NQF) to raise the quality of early learning in Australia just five years ago. It is particularly pleasing to note that this support is bipartisan, with both Coalition and Labor governments championing the importance of the early years. Though Australia is playing serious catch-up with much of the rest of the world, the decade-long reform process in the NQF gives us a pathway to get there.

    However as any informed shopper will tell you, quality comes at a cost. And government assistance to families, to help meet the rising cost of child care has not kept up. The result has been that too many families have been priced out of access to early learning and childcare. This results in a double negative – for the children who miss access to early learning opportunities, and for their parents who are then unable to re-join the workforce. Both sets of lost opportunities carry big costs for Australia that will accumulate over time.

    Price Waterhouse Coopers has produced some modelling of the benefits of investing in quality early learning. They estimated a threefold benefit to the future productivity of the economy over coming decades – $6 billion from increased female workforce participation if childcare costs were made lower, $10 billion in improved productivity from the benefit of raising the quality of early learning, and a whopping $13 billion from increasing the participation of vulnerable children in early learning. Price Waterhouse Coopers’ modelling also found that while there was a short-term fiscal cost to making quality early learning more accessible and affordable, in the medium and long term it more than paid for itself.

    Other research suggests that Price Waterhouse Coopers’ estimates could be understated. The Grattan Institute concluded that if Australia’s female workforce participation rate rose to that of Canada, our economy would be $25 billion better off. This is a figure often quoted by federal Treasurer Joe Hockey in making the case for increasing Australia’s low rate of female workforce participation, which ranks as the fourth lowest in the OECD.

    Public investment should mirror the public interest, and the public interest case for investing in childcare and quality early learning is very strong. The National Commission of Audit, the Henry Tax Review, the OECD Going for Growth report, and the recent Productivity Commission Inquiry into childcare and early learning have all recognised this.

    It is in the public interest for more children to start school ready to learn. This not only gives children the best start, it also saves the public many millions of dollars. It is in the public interest to provide additional support and early intervention for children facing disadvantages, and the first five years provide a crucial short window to redress the development gap. It is in the public interest to remove barriers to women’s workforce participation through the provision of affordable early learning and care for their children. And it is in the public interest to invest now in Australia’s future economic productivity by investing in the learning capacity of our future workforce.  Australia invests far less in making quality early learning accessible and affordable than most industrialised countries. That needs to change. As a nation, we should not leave any of our children behind. We cannot afford to.

     

    Julia Davison is CEO of Goodstart Early Learning, Australia’s largest provider of early learning and care, with 644 centres across Australia caring for 73,000 children from 61,000 families. Goodstart employs over 13,000 staff and has an annual turnover of around $800 million. Goodstart was created by a partnership of four of Australia’s leading charities – Mission Australia, Social Ventures Australia, The Brotherhood of St Laurence and The Benevolent Society – which saw the potential to operate the failed ABC Learning Centres, transforming early childhood education in Australia. Goodstart’s vision is for Australia’s children to have the best possible start in life. As one of the biggest social enterprises in Australia, Goodstart works to create social change by giving children access to affordable, high-quality early learning. Julia has a strong interest in public policy having completed a Masters in Public Administration at the Harvard Kennedy School.

    This article was first published in Australia 21. It was part of a series entitled ‘Who speaks for and protects the public interest in Australia?’  See www.australia21.org.au

     

  • Alex Wodak. Reducing the demand for illicit drugs

    At his Congressional confirmation hearing in January 2001, the then Secretary of Defense-designate Donald Rumsfeld was asked whether US drug problems were best attacked by reducing demand or targeting drug supplies. Rumsfeld said that he believed that illicit drug use was “overwhelmingly a demand problem”. He added, “If demand persists, it’s going to find ways to get what it wants” and “if it isn’t from Colombia, it’s going to be from someplace else.” This might have been an unconventional view 14 years ago but it’s becoming a mainstream perspective these days.

    The conventional view is that young people make bad choices about illicit drugs because of an information deficit. Tell young people how bad illicit drugs are, so Conventional Wisdom asserts, and they won’t touch the stuff. Unfortunately, the experience of evaluating decades of educational mass and school-based campaigns is that, at best, modest and temporary benefits are achieved. But some studies have found that educational interventions often achieve no benefits or even increased drug use and problems. Community and therefore political expectations, are stubbornly unrealistic. In the various National Drug Strategy Household Surveys conducted for the Commonwealth Department of Health and Ageing every three years, the community always notionally allocates the lion’s share of government expenditure to drug education. Drug education is clearly the community panacea for drug problems.

    My personal journey thinking about these issues started after I spent an evening in a shooting gallery in Williamsburg, Brooklyn, New York City, in October 1987 while looking at HIV among people who inject drugs in Europe and North America. ‘Shooting galleries’, common in much of the USA, are derelict houses where people can bring drugs secreted on their person and hire (used) needles and syringes for a few hours to inject with. Shooting galleries helped to spread HIV extensively in the USA. The local police are usually paid to ignore shooting galleries.

    The Williamsburg area, now gentrified, was then clearly extremely dangerous. Abandoned cars rested propped on bricks on the side of the road. Many tenement buildings were derelict and lay empty after a fire. We gathered in a basement room carpeted with filth and broken glass. We had brought candles, as there was no electricity in the building. The front door of the house was missing. I watched aghast as four Hispanic people injected speedballs of heroin and cocaine for several hours.  I could not stop wondering why these two men and two women were so ridiculously indifferent to their health. I wondered why they made so little effort to avoid HIV? I established that they knew some people who had injected drugs and had AIDS, including some who had died of AIDS. But I was then instructed to stop asking further questions. I realized that these four people had lost all hope of decent housing, healthcare, education and employment. Not just for themselves but also for their children and grandchildren. Given the inevitability of a bleak future for them and their families and friends, enjoying a few hours of intense pleasure made some sense after all.

    In 2009, Richard Wilkinson and Kate Pickett published ‘The Spirit Level: Why Equality is Better for Everyone’. This influential book argued that many important public health and social outcomes were worse in countries with high levels of inequality, such as the USA and Australia, and better in countries with lower levels of inequality, such as Japan and Scandinavia. Illicit drug use was one of the issues that they included in their studies. This book has its critics but overall, the reception has been quite positive. My 1987 experience in Williamsburg, Brooklyn seemed to fit their theory like a glove.

    Last October I was invited to give some talks on harm reduction in Japan. I was struck by the fact that after a quarter century of economic stagnation, average unemployment was still only 3.1%  in Japan while after almost a quarter century of uninterrupted growth, average unemployment in Australia was more than double. Youth unemployment in both countries would have been several multiples of average unemployment. Heroin use is almost unknown in Japan but continues to be a significant problem in Australia. Amphetamine use in Japan is also tiny compared to Australia.

    In 2011, I was asked to give a presentation on demand reduction to the Global Commission on Drug Policy in Geneva. I argued that the results of conventional attempts to reduce drug use and problems through education were disappointing. The Chair of the Commission, Fernando Henrique Cardoso, who had been the President of Brazil from 1995- 2003, did not seem impressed by my negative assessment of demand reduction. Cardoso, a hero in Brazil for conquering hyperinflation in the 1990s, asked me what I would do to reduce the demand for drugs. I replied that his slaying of Brazilian hyperinflation had done more to reduce the demand for drugs than all the conventional drug education in the world. Although he did not seem to like that answer either, many clinicians and researchers around the world do accept that higher levels of illicit drugs use and problems are very likely if severe social and economic disadvantage is common.

    The conclusion seems inescapable to me: if we in Australia want lower levels of illicit drugs use and problems, we will have to reduce our high level of inequality. This may seem counter-intuitive to some but there are many examples of dangerous health conditions being conquered as much by improved social conditions as by powerful medical treatments. In the USA, with improved social conditions the prevalence of TB fell by more than two thirds in the early decades of the twentieth century before the advent of antibiotics.

    Dr Alex Wodak AM

    Emeritus Consultant, St Vincent’s Hospital, Darlinghurst, NSW 2010

     

     

     

     

     

     

     

  • Michael Keating. The 2015 Intergenerational Report

    Purpose of the Intergenerational Report

    The Intergenerational Report (IGR) should be an important document.  It purports to tell us what the Australian population, economy and Budget could look like in forty years time.

    Of course no-one really knows what the economy will look like in forty years time. Instead the IGR tells us how fast the economy could grow over the next four years if the drivers of economic growth – population, participation and productivity – continue to have the same future impact as in the past. So despite the declared optimism of the Treasurer about our economic future, and how much better off we will be, as far as the IGR is concerned that future has been established by definition and is certainly not proven.

    But that is to miss the point of this IGR and its three predecessors.  Rather the IGR is a conditional projection designed to help us assess the sustainability of government policies impacting on expenditure and revenue, assuming that the economy continues to grow in much the same way as in the past.  That is a useful exercise, especially as each of the four IGRs so far have signalled a future long run Budget deficit, although the magnitude has varied substantially from one IGR to another (see Table below). This in itself reinforces the need for caution in interpreting the IGR projections as a basis for policy action.

    Projected Fiscal Deficit in Successive Intergenerational Reports

    Per cent of GDP

    Report Projected deficit forty years later
    2002 5.2
    2007 3.5
    2010 3.0
    2015 6.0

     

    Nevertheless the principal message in all the IGRs is that assuming no change in present policies, there are pressures for public expenditure to grow faster over time than the economy and revenue; principally because of:

    • the ageing of the population,
    • the disproportionate impact of more expensive technologies on the cost of health care, and
    • the relatively high demand for more health and education services as incomes rise.

    Accordingly it would seem prudent to start taking action now to bring the budget back onto a more sustainable basis in the long run, especially when the present starting point is itself an unsustainable deficit. But given the inevitable uncertainties associated with these projections, the pace and extent of fiscal tightening should be subject to constant review as events unfold.

    Although this message of the need for ongoing fiscal restraint is common to all of the four IGRs so far produced, this latest 2015 IGR is different in both tone and presentation.  In particular, the three previous IGRs had only one fiscal projection based on a continuation of present policies, whereas this 2015 IGR has three scenarios. In itself this introduction of scenarios might be a good innovation, as they could serve to further illustrate the relative significance of the uncertainties involved in these projections. Unfortunately, however, that does not seem to be the main purpose of the three scenarios in the 2015 IGR; rather their purpose seems mainly to make polemical points about the irresponsibility of the previous Labor Government and those who continue to oppose the Government’s budget measures in the Senate.

    The fiscal scenarios

    The three fiscal scenarios provided in the 2015 IGR are:

    1. A ‘previous policy’ scenario which purports to reflect the situation that the present Government inherited on its assumption of office along with a continuation of what would have allegedly been the previous Labor Government’s policies. Under this scenario an underlying cash deficit for the Budget is projected equivalent to 11.7 per cent of GDP in 2055, and net debt would reach almost 122 per cent of GDP.
    2. A ‘currently legislated’ scenario, which uses the Government’s savings measures that have actually been passed by the Parliament, and for 2055 it projects a Budget cash deficit of almost 6 per cent of GDP and a debt to GDP ratio of almost 60 per cent.
    3. A ‘proposed policy’ scenario, which is based on full implementation of the present Government’s policies as they had been announced – a couple of these policies have been reversed since the scenario was completed (namely the Medicare co-payment, the Defence Forces pay, and possibly additional expenditure on international and domestic security). According to this scenario the underlying cash balance of the Budget will improve to a surplus of 1.4 per cent of GDP in 2040, and then moderate to a surplus of around 0.5 per cent of GDP in 2055, with net debt projected to be fully paid off by 2032.

    The second ‘currently legislated scenario’ has most in common with the way previous IGRs reported, and this projection of the size of the fiscal task is of much the same order as projected in the first IGR. However, in Peter Costello’s first IGR the projected fiscal gap was discussed in a much more measured way as an illustration of the future challenges, whereas in the latest IGR the presentation seems to be intended to scare us into accepting the Government’s ill-fated budget.

    Furthermore, the so-called ‘previous policy’ scenario which the Government wants to hang around Labor’s neck is a pure concoction. The starting position chosen for this scenario is after the Government had been in office for some time and had made a number of decisions, such as abolition of the mining and carbon taxes. That effectively means that at its starting point the Budget deficit for this scenario was already much greater than when Labor left office.  In fact the only true statement of the fiscal situation that the present Government inherited is the Pre-Election Economic and Fiscal Outlook report, which the two Secretaries of Treasury and Finance signed off on just before election day, and that report showed that in the Secretaries’ opinion the Budget would return to surplus as soon as  2016-17. In addition to the extent that the Budget has deteriorated since Labor left office there is every reason to think that Labor would have taken action to restore the fiscal position, as Labor has in the past.

    In short, this ‘previous policy’ scenario is quite disingenuous. Furthermore it is inconsistent with the Government’s professed desire to build the bi-partisan support which will almost certainly be required to restore a sustainable fiscal position.

    Restoring a sustainable fiscal position

    The Government’s ‘proposed policy’ scenario projects a return to a fiscal surplus by 2019-20, and this surplus continues to increase slowly to around 1.4 per cent of GDP in 2039-40. On what we presently know, the projected trajectory for that Budget balance seems reasonably in line with what is required to restore fiscal sustainability.  Again, however, the validity of this scenario depends upon the realism of the underlying assumptions, particularly as regards the policies required to achieve the projected Budget surpluses.

    Indeed a key rationale for each of the four IGRs that have been produced to date has been to examine the fiscal consequences of the projected ageing of the population, and the extent of that projected ageing has increased through successive IGRs as the baby boomer generation continues to age. Thus this latest 2015 IGR projects that in forty years time there will be just 2.7 people working for every aged dependent whereas today there are 4.5 people in the workforce supporting every aged dependent. And by comparison, the first 2002 IGR projected that there would be about 4 people working for each aged dependent in another forty years, compared to a bit more than 5 working people at that time.

    So, as expected, the projected aged dependency rate has increased as the time-period of the projections has been pushed out in successive IGRs, and other things being equal, the fiscal pressures expected from an ageing population should have also increased commensurately. But the preferred ‘proposed policy’ scenario in the latest 2015 Report projects much lower social spending on health, aged care and age pensions, and education than all the previous IGR Reports. Thus the latest IGR 4 projects increases of 3 percentage points for these social expenditures in the ‘preferred policy’ scenario, compared to around a 6 percentage point increase projected in IGRs 1 and 2, and a 4.5 percentage point increase in IGR 3.

    This much lower social spending projected in the latest 2015 IGR essentially reflects the policies of the Government that the Senate has so far refused to pass and which are the key feature of this ‘proposed policy scenario’. But the realism of these proposed policies must surely be open to question.

    First, health costs were projected to rise by 80 per cent over the following forty years to 7.1 per cent of GDP in IGR 3, but in the latest IGR 4 these costs are projected to only increase by 30 per cent to 5.5 per cent of GDP in 2055. The principal reason for this huge turnaround in projected health costs is the government’s plan to reduce the indexing of health payments to the States. Similarly changes to indexation arrangements are expected to bring big savings in education; especially in payments to State schools.

    Even if the Government does succeed in limiting its payments to the States to this extent, it seems most unlikely that the States could then restrain the expenditures commensurately on health and education. Instead this policy is a form of cost shifting to the States, and if the States have to wear it, then they will almost certainly have to raise additional taxation revenue to cover their higher share of health and education expenditures. The most obvious tax for the States to increase would be the GST, but that is a Commonwealth tax and the 2015 IGR is premised on the assumption that the revenue from Commonwealth taxes will not be allowed to rise above a ceiling equivalent to 23.9 per cent of GDP. If that ceiling is adhered to then the Australian Government would then need to find further expenditure savings on its own account if the States were allowed to increase their GST revenue to meet their increased funding share of essential health and education services.

    Second, another major source of savings critical to achieving the outcome of the ‘proposed policy’ scenario is the change in the indexation arrangements for various pensions and other social security payments so that they are indexed to consumer prices rather than to average weekly earnings[1]. Peter Whiteford of the Australian National University has shown that this will result in the single age pension falling from about 28 per cent to just under 24 per cent of average earnings by 2029. While if indexation back to wages were not restored then, by 2055 the single age pension would have fallen to around 16 per cent of average wages, a considerably lower level than any experienced in the last 50 years. The projected increases for many other social security payments, such as family allowances and Newstart, would lead to even more inequality, and this in an economy which already has a tendency to increasing inequality without the government withdrawing assistance to lower income people and their families.

    In short, there must be considerable doubt about the realism of this ‘proposed policy’ scenario.  Wage earners would continue to experience increases in their living standards and no increase in their taxes, but people on welfare and those who are sick would fall behind.  The consequences for our society would seem to make it most unlikely that these policies would be maintained for the next forty years. Instead many would say, as the Senate is presently disposed, that the route back to fiscal sustainability must lie elsewhere.

    Thus, unlike its predecessors, this latest 2015 IGR does not provide a useful basis for further planning and we all will need to consider alternative strategies.  There are other alternative ways of balancing the budget, and in addition the rate of economic growth could be enhanced modestly by further improvements to participation and productivity.

    These alternative proposals for restoring fiscal sustainability over time and further improving living standards will be the posted as part of a series of policy articles being planned for this blog to appear over the next few months. In addition, some previous suggestions for an alternative budget strategy were canvassed in articles I posted on 21-23 July 2014.

    Michael Keating AC was formerly Secretary of the Department of Finance and Secretary, Prime Minister and Cabinet.

     

    [1] The IGR assumes that this policy will only be maintained until 2028-29, although the Government’s legislation has no such sunset clause.

  • Alex Wodak. The current imbalance between public and private interests. 

    The public interest, meaning ‘the welfare or wellbeing of the general public’, has always competed with private interests. Furthermore, public and private interests will always be in competition. What is so unusual about the current tension is the extreme imbalance: these days, private interests almost always get what they want. The policy domination by huge companies and extremely wealthy individuals has severe adverse consequences for the community in areas such as health, social cohesion and the economy. The current extreme imbalance between private and public interests is now not merely an Australian phenomenon but is also international. Examples of this policy imbalance abound in Australia and include mining, alcohol, fast food, transport, taxation and gambling.

    The increasing dominance of private over public interests coincides with an increasing inequality of income and wealth. Inequality in Australia waxed and waned over the years with low levels reached in the 1970s. Inequality then began increasing in Australia, growing under Labor and Coalition governments. Inequality increased to even higher levels in the United States where the imbalance of private and public interests is even more evident and has had striking political repercussions.

    The health of Australians improved dramatically during the 20th century. For example, average life expectancy increased from about 45 years in 1900 to over 75 years in 2000. About 25 of the additional 30 years of life expectancy resulted from improvements in public health while advances in clinical medicine only added five additional years. Yet in Australia, 98 per cent of health expenditure funds clinical services with only 2 per cent allocated to prevention. In the first half of the 20th century, improved sewerage and drains substantially reduced deaths and disease. In the second half, the decline in smoking, improved diet and increased exercise were major factors improving health. Tobacco control has been a rare victory for a public interest David over a corporate Goliath. Yet in 2014, the federal government blocked the implementation of a national agreement to alert consumers to the potential health risks of some foods. Some powerful food producers were the only beneficiaries.

    The fate of the proposed Resource Super Profits Tax (RSPT) is another example of the recent dominance of private over public interests. In 2010, the federal government proposed the RSPT, modelled on the well-regarded Petroleum Resource Rent Tax levied on the off shore petroleum extraction industry, after accepting a recommendation from a review of Australia’s tax system. A distinguished committee chaired by a highly regarded Secretary of Treasury had carried out this review. Vociferous criticism from the mining industry including an effective advertising campaign followed, and after the deposition of the Prime Minister by the Deputy Prime Minister a heavily watered down and ineffective Minerals Resource Rent Tax (MRRT) replaced the RSPT. The then government contributed to its own problems through its political incompetence. Once again, powerful private interests got their way and the community lost.

    One of the common links in these examples is the development of monopoly, or near monopoly, arrangements used to generate vast wealth and thereby political power sufficient to extract huge economic rents.

    Taxation arrangements in Australia in recent decades including the abolition or reduction of inheritance taxes, capital gains taxes, private income and company tax, and generous concessions for superannuation and negative gearing, have benefited the wealthier members of the community and large companies.

    The coming to power of Thatcher in the UK and Reagan in the USA and the fall of communism in the USSR and its satellites increased support for the view that private economic interests are inherently more efficient than publicly owned enterprises.

    The replacement in China of a central command economy by a free market system which lifted hundreds of millions of people from poverty over the following decades seemed to exemplify the benefits of a free market economy with minimal restrictions for large companies and wealthy individuals. In the United States, major economists including Paul Krugman, Joseph Stiglitz and Jeffrey Sachs have warned that the currently high levels of inequality have corrupted the political system and there is increasing concern that with a radically extreme Republican Party often prepared to disregard the national interest the United States may have become ungovernable — surely a warning for Australia.

    What is to be done? The first step for those concerned by the increasing dominance of private and corporate interests over the public good is to articulate their views.

    Could a Public Interest Commission maintain a better balance in the future?  First some difficult questions would have to be answered. How will the public interest be defined and measured? Where will successful examples of a Public Interest Commission be drawn from? How will issues be selected and enquiries be conducted?

    And finally, what sort of Australia do its citizens want — an individualist Australia with marked inequalities, poor public services, choked roads and shrinking taxation on the American model, or a more collective and more equal Australia with less poverty, better public services but more taxation similar to the Scandinavian countries and Japan?

    A political correction to the current imbalance can only occur if Australians start to debate their values and visions. The political class can only do so much. Extensive polling shows that a majority of Australians want improved public services and are prepared to pay higher taxes to fund them. However, if large numbers of Australians want to see a different country emerge, they have to be prepared to work for these changes starting at the community level.

    Dr Alex Wodak AM, a physician, was Director of the Alcohol and Drug Service at St Vincent’s Hospital, Sydney from 1982 until he retired in 2012. His major retirement project is drug law reform.  Together with colleagues, Dr Wodak started Australia’s first needle syringe program and supervised injecting facility when both were pre-legal. He was also involved in establishing the National Drug and Alcohol Research Centre, the Australian Society of HIV Medicine and the NSW Users AIDS Association, an organisation for and by people who use drugs.  He is a Director of Australia21.

    This article is one of a series published by Australia 21 on the subject ‘Who speaks for and protects the public interest in Australia?’  For other articles published, see www.australia21.org.au.

     

  • Graham Freudenberg. Gough Whitlam Commemorative Oration.

     You will see below what I think is a remarkable speech by Graham Freudenberg about Gough Whitlam’s contemporary relevance.  This oration is much longer than I normally post on this blog, but it is an outstanding oration which I am sure you will enjoy.  The Whitlam Institute will also be publicising this oration.  John Menadue

    THE WHITLAM INSTITUTE

    GOUGH WHITLAM COMMEMORATIVE ORATION

    “Contemporary Relevance, comrade”:

    Gough Whitlam in the 21st century

    Graham Freudenberg

    St Kilda Town Hall, Melbourne, 4 March 2015

     

    Let me begin by doing what I did for the best part of my career, and re-cycle a speech by Gough Whitlam.  It was his first major speech in the House of Representatives on international affairs, in days when they actually debated foreign policy in the Australian Parliament – on 12 August 1954.  That was another world.  Yet this speech goes to the heart of my assertions about the contemporary relevance of Edward Gough Whitlam.  In style and substance, in his zest for the cut and thrust of parliamentary debate, for the sweep of its ideas, its challenge to prevailing orthodoxies – and for its optimism – it is quintessential Whitlam.  He made the speech soon after the Geneva Conference in 1954 had given the West a new chance for good sense over China and Vietnam; instead, alas, the lost opportunity of Geneva became a disastrous wrong turn for the United States and Australia. Whitlam had been a member of parliament for less than two years.  His star was just rising in the Labor Party, itself on the threshold of the Great Split.  I’ll quote just a few of his opening lines, to give the flavour:

    In the exciting and rapid movement of events during the last few months, the Minister for External Affairs [Mr Casey] has twice circumnavigated the globe in the steps of his model, Mr Eden, and his master, Mr Dulles [UK Foreign Secretary and US Secretary of State respectively].  Though the Minister saw fit to make statements to the newspapers in the United States of America and in other parts of the world, he did not say anything to the Australian press.  The only Minister who has seen fit to make any statement on international affairs has been, of all people, the Postmaster General (Mr Anthony)  [Doug Anthony’s father, that is], who three weeks ago addressed the annual conference of the Queensland branch of   the Australian Country Party.  In haranguing that rally of rustics, the Postmaster General declared that we Australians cannot live in peaceful co-existence with the Communists in this cold war.  That pronouncement, fortunately, was in direct contradiction of statements that had already been made by President Eisenhower, of the United States of America, and Sir Winston Churchill, the British Prime Minister.  The declaration of the Postmaster General has been emphatically repudiated in this House by the Prime Minister [Mr Menzies] and the Leader of the Opposition [Dr Evatt].  As a consequence of that rash utterance, the Postmaster General, whose health in recent months was deemed to be rapidly qualifying him for a diplomatic post, has rendered himself persona non grata  to every head of State except President Syngman Rhee of the Republic of Korea, and Generalissimo Chiang Kai-shek, the leader of the Chinese Nationalist Government [on Formosa].

    When, more than a decade later, I came to read all Whitlam’s early speeches with a professional eye, time and again I found myself thinking “I wish I could say things like that”.  So I did.

    But what could be the possible relevance of a speech made by a Labor backbencher more than 60 years ago, when Churchill was still Prime Minister of Britain and when Menzies still had more than eleven years to go as Prime Minister of Australia?  Well, this was the speech in which Whitlam first called for recognition of the People’s Republic of China, nineteen years before he achieved it.  In particular, he insisted that China’s sovereignty over Taiwan (Formosa) must never be allowed to become a cause for war with China, inevitably a third world war, inevitably a nuclear war.  Whitlam was daring to assert that the views and interests of Australia might not always be the same as those of the United States.  His propositions will be as relevant to our relations with China and the United States over the next 60 years as they were 60 years ago.  Further, he made an eloquent connection between hopes for democracy in our region, then in the throes of decolonisation, and the preservation and enhancement of parliamentary democracy in Australia – his life-long cause, from which all else flowed.  It was a speech marked by his special capacity to make connections between the wider world, the region around us, and Australia’s own standing and conduct.

    And this speech, not only in its content but in its approach, attitudes and insights, the breadth of vision enhanced by his attention to detail, provides a sub-theme for everything I say tonight:

    Gough Whitlam’s contemporary relevance lies not only, or even so much, in the actual policies and issues he placed on the Australian political and social agenda, but in the educative process, based on reason, relevance, knowledge and foresight, by which he reached them.  And perhaps most relevant of all to these times, for all of us as Australians, his challenge to conventional wisdom, the prejudices and fears of his times.

    And that included emphatically obsolences and obstructionism in Labor thinking.  I don’t pretend to be able to answer the question: “What would Whitlam do if he were the Labor leader today?”  I’m certainly not purporting to tell Bill Shorten and his colleagues: “This is how Gough would do it”.  But perhaps I can shed some light on what I believe would be his approach and attitudes to the very complex questions facing Australia and the Labor Party in today’s “rapid and exciting movement of events”.

    There is no place more fitting to do this than Melbourne.  I take the opportunity to make amends for an omission in my accounts of the life and times of Edward Gough Whitlam.  In my brief eulogy at the Sydney Town Hall on 5 November last year, for instance, I identified the central importance of his relationship with Werriwa, for 25 years his electorate in the outer Western suburbs of Sydney.  And he himself always acknowledged the impact of being a teenager in Canberra, as it struggled to grow into the national capital after the move from Melbourne in 1927.  But it should never be overlooked how much of Melbourne there was in Gough Whitlam.  It is not just the fact that he was born here – on 11 July 1916 – and spent the first five years of his life here.  The greatest single influence of his life was his father, Harry Ernest Frederick Whitlam, later Commonwealth Crown Solicitor; and Fred Whitlam was Melbourne through and through.  His influence on his son was steeped in the old Melbourne liberal/radical tradition.  Its strength, paradoxically, retarded the early growth of the Labor Party in Victoria. There was a remarkable revival of that tradition through the flourishing of the Fabian Society in the late fifties, sixties and beyond; and the Fabian relationship with the rise of Whitlam is an important part of the larger story.  “Among Australian Fabians, I am Fabius Maximus”, he said.  Though I myself believe the title properly belongs to Race Mathews.

    Gough returned to Melbourne, in thought, towards the very end.  When much in that mighty memory was fading, he would recall to his faithful visitors to his William Street, Sydney, office, like John Faulkner and John Menadue, that when he was 17 or 18 he took his grandmother to the new Shrine of Remembrance in St. Kilda Road and read out to her – she was nearly blind – the name of the battlefield in France where her son, his uncle, had died.

    Even at the time of Gough’s death, the comment was still being made that it was strange, with his background, he should have become a Labor leader.  There used to be Tories who regarded him as a class traitor.  The truth is, with his upbringing, with such a father and his values, Gough Whitlam could never have been any other than Labor, in the Australian context.

    In November 1973, in the glow of his first year in office, Whitlam delivered the Robert Garran Memorial Lecture in Canberra.  His father had delivered the inaugural Garran Lecture in 1959, one great public servant honouring another, who had been his Melbourne mentor.  Whitlam quoted his father, who was speaking of Australia’s role in the United Nations:

    The task before Australia is honourable, and its efficient discharge would make for a dynamic peace; to it, all the resources, skills and energy that Australia can command deserve to be committed.  The honourable task, however, could become majestic, and infinitely inspiring, and the peace could become creative, deep and rich, and enduring, if there be added what I have termed Excellence, Excellence in all its fullness.

    That is Gough Whitlam quoting his father.  But he might just as well have been quoting himself.  Perhaps, given the closeness of their relationship, he was.

    I acknowledge my own debt to Melbourne.  Melbourne made me.  I arrived here as a 20-year-old reporter for The Sun, via newspapers in Brisbane, Sydney and Mildura, in 1955 – the year of the Great Labor Split and the beginning of the Bolte era in Victoria.  Anyone who believes that the fifties were dull wasn’t there.  I missed the transformational event of the 1956 Olympic Games because I had taken myself off to London for a year.  It was a watershed year: Khrushchev’s not-so-secret speech in Moscow denouncing Stalin; Nasser’s nationalisation of the Suez Canal and the Suez crisis; the Soviet invasion of Hungary.

    The Suez crisis was my political Road to Damascus.  Returning to Melbourne in 1957, I immediately joined the East Melbourne branch of the Australian Labor Party.  Arthur Calwell, then Deputy Leader of the Opposition under Evatt, was the member for Melbourne.  In 1961, I was given the opportunity of a lifetime when, by a wonderful combination of friends and flukes, I became Press Secretary to Arthur Calwell, by now the Leader of the Opposition,  and in 1967, to his successor Gough Whitlam.  When Whitlam made his famous or notorious “The impotent are pure” speech before the jeering delegates to the Victorian Labor Conference at the Melbourne Trades Hall in June 1967, Calwell watched the performance from the gallery and said to me in the vestibule afterwards: “You won’t be working for your new boss long now”.

    “Throughout my public life”, Whitlam said on the 30th anniversary of the It’s Time election, “I have tried to apply an over-arching principle and a unifying theme to all my work.  It can be stated in two words: contemporary relevance.  It was the fundamental test I applied, in particular to the development of Labor policy in the years before 2 December 1972.  There is a case to be argued that my government faltered whenever we lost sight of the principle or allowed the rush of events to subsume them.”

    Among the many fine and true things said at the Sydney Town Hall, I want to focus on a point made by Tony Whitlam.  He said that his father believed deeply in a strong two-party system.  The whole thrust of Whitlam’s career was to further his determination that the Labor Party should remain one of the two dominant forces within our parliament, either in government or able to form government, in its own right.  He saw strong, effective parties as the mainstay of parliamentary democracy.  The future of the two-party system and Labor’s role within it is now the big political question facing Australia today, not just the Labor Party.

    May I say here how much encouragement we draw throughout Australia from the victory of Daniel Andrews and the Labor Party in Victoria, so soon after Gough Whitlam’s death.  Like Neville Wran’s victory in New South Wales six months after the Dismissal, it had a galvanising effect and renewed our sense of what is possible.  As to the Queensland result, well, it shows that anything is possible.

    In his first statement on becoming Leader of the Federal Parliamentary Labor Party on 8 February 1967, Whitlam said:

    For the Labor Party, what is clearly at stake is its future role within the Australian parliamentary system …. Our actions in the next few years must determine whether it continues to survive as a truly effective parliamentary force capable of governing and actually governing.

    Nearly nine years later, almost on the eve of the Dismissal, in the middle of his tremendous battle against the Senate, the ultimate challenge to the very legitimacy of a reforming Labor Government, Whitlam delivered the Curtin Memorial Lecture at the ANU in Canberra (29 October 1975).  Speaking of his work before 1972, he said:

    I addressed myself to three principal tasks: to develop a coherent program of relevant reform; to convince a majority of Australians that those reforms were relevant to their needs and their lives; and to convince the Labor Movement as a whole that the parliamentary institutions were relevant in achieving worthwhile reform.

    “The great organisational battles between 1967 and 1970, particularly in Victoria”, he said, were essentially about that third task:  “It was the toughest of all”.

    Keeping bright the Whitlam legend does not require manufacturing myths about him.  The stakes in Victoria were high; and while both sides invoked high principles, in the end the resolution of the conflict involved number-crunching of the roughest kind.  Whitlam was not particularly adept at that game, but accepted its necessity.  He largely left it to others – Lance Barnard in his rise to the leadership; Rex Connor in his self-imposed contest for the leadership with Jim Cairns in April 1968; Clyde Cameron in the reconstruction of Victoria in 1970.

    So I want to emphasise that electoral and political calculations figured as largely with Whitlam as any other political leader.  It was not all altruism and crashing through.  To gloss over Whitlam as a practising, party politician, working the system with the best of them, is the surest way to make him irrelevant.

    Whitlam set out, from the first, to combat the defeatism which had settled on much of the Labor Party, particularly in Victoria.  Political necessity drove his defiant speech to the Victorian ALP Conference in June 1967:

    We construct a philosophy of failure which finds in defeat a form of justification and a proof of the purity of our principles.  Certainly, the impotent are pure ….. Let us have none of this nonsense that defeat is in some way more moral than victory ….. I did not seek and do not want the leadership of Australia’s largest pressure group.  I propose to follow the traditions of those of our leaders who have seen the role of our party as striving to achieve, and achieving, the national government of Australia.

    Whitlam was especially infuriated by the self-serving claim that the bosses of the Victorian Central Executive were the principled guardians of Labor’s opposition to Australian involvement in the war in Vietnam.  In his landmark speech of 4 May 1965, Calwell had explicitly acknowledged the unpopularity of Labor’s position, to be met, in what seemed on the day a devastating reply by Menzies, with the sneer “If I might end on a horribly political note, it is a good thing occasionally to be in the majority”.  This was the same speech in which Menzies’ total justification for the war was that it was “part of the downward thrust by China between the Indian and Pacific Oceans”.  By such simplicities did Menzies reign supreme.  After the debacle of the 1966 election, ostensibly because of Vietnam, but more because of the dire state of the Labor Party itself, Melbourne became the heart and soul of the Moratorium Movement under the memorable leadership of Jim Cairns.

    Whitlam, by contrast, antagonised the Labor Left by his dismissive attitude towards the Moratorium Movement.  He told that Victorian Conference in June 1967 that protests “would not save a single Australian life or shorten the war by a single day.  Our consciences should not be so easily salved.  The present government opposes all moves which might bring about negotiations, and is the first to applaud and endorse escalation of the war.  Therefore our aim must be to replace that government.”

    But Vietnam was not really the divisive issue for Labor.  The most potent source of division was far older – over a century old in fact.  It was the issue of State Aid for non-government schools, meaning, in practice, the Catholic parish school system.

    It must be hard for any Australian under 60 to grasp fully the sectarian bitterness and the political explosiveness surrounding this issue.  Even the phrase itself – “State aid” – barely registers today.  The Bishops and the Church, even with so powerful an advocate as Archbishop Mannix, had failed utterly to dent the bipartisan intransigence against State Aid – the Liberal Party still essentially a Protestant  party; the Labor Party, its traditional Catholic support notwithstanding.  The unravelling came after the Split when the breakaway DLP put a pro-State aid plank in its platform.  From then on and for the next decade, the Labor Left made opposition to State Aid the test of Labor orthodoxy.  This was the issue which was to provide Whitlam with a platform to secure representation for the parliamentary leadership on the Labor Party’s Conference and Executive, ending the “36 faceless men” controversy.    It produced Whitlam’s outburst against “the 12 witless men” of the ALP Federal Executive, and his near-expulsion from the party in 1966.  It produced his triumph at the 1969 Federal Conference in Melbourne which adopted his ground-breaking proposal for the Schools Commission, granting aid to all schools – government and non-government alike – on the basis of needs.  It produced the last ditch defiance of the old VCE, sabotaging Labor’s 1970 State campaign, and perversely giving Whitlam unmistakable grounds for Federal intervention; which in turn paved the way for Victoria’s decisive role in electing the Whitlam Government in 1972 and saving it in 1974.

    What were the qualities that rewarded Whitlam with such success after these long years of turmoil and confrontation?  Perseverance, of course.  Stamina, of course.  But there was something else – a characteristic approach to political problems, and his way of arguing them out.  “Only connect”, E. M. Forster wrote, and Whitlam was the master of making connections – from the particular to the general, linking the local with the regional, the regional with the national and the national with the international.  Or reversing the process, as when debating standards for education, health, housing or transport, he would start from the carefully crafted formula: “Countries with which we would choose to compare ourselves”.  Sometimes, this left only Canada.  In the case of State Aid, he comprehensively connected the whole education issue with party reform, policy reform and electoral success – “the party, the policy, the people” in John Menadue’s 1967 formula.

    I see this making of connections as the essence of the Whitlam approach and the key to his contemporary relevance.  Remarkable, too, was his melding of personal experience with public policy.  In her truly great biography, Jenny Hocking describes his learning curve on aborigines when he witnessed their treatment in Queensland and the Northern Territory during his wartime years in the RAAF.  I have already mentioned the connection between Whitlam, the member for Werriwa, and Whitlam’s policies on “Schools, hospitals, cities”, to use his shorthand for his Program, his deep understanding that Australia is a nation of immigrants, and all the opportunities and obligations which flow from that central fact, his passion for electoral reform, one-vote, one-value, and even the national sewerage program.  He himself dated his determination to modernise the Constitution from the failure of the 1944 referendum, broadening and deepening with his service on the Joint Parliamentary Committee on Constitutional Reform.  This seminal experience led him to focus on the connection between the Constitution and the Labor Platform.  He was exasperated by the way the Labor Party had allowed the High Court rejection of bank nationalisation under Section 92 in 1948 to become an excuse for policy stagnation.   He later put his attitude in this way:

    I was concerned by the way in which the Labor Party’s failure to move on, to look ahead, to attempt to find new ways towards reform, was short-changing the Australian people and short-changing the Party itself.  The Party became obsessed with the idea that rather than being about revival for the future, its purpose was to return to a more comfortable past – not renovation but mere restoration.  As a result, both the achievements of the past and the hopes for the future receded equally.  The Party stagnated and the Platform was stultified.

    There, in its most striking form, is Whitlam’s continuing challenge – to modernise the Party, to modernise the Platform, to modernise the Party’s place in a modernised Australia.  He wanted, of course, to modernise the Australian Constitution, and no Australian leader worked harder to achieve change by referendum.  Right to the end, he never gave up on this, despite the overwhelming evidence that change by the direct referendum route is almost always foredoomed in Australia.  Yet despite this, he achieved real change in the spirit of the Australian Constitution, in its interpretation and in the application of the Constitution as it exists to the implementation of Labor policy.  He never succeeded in altering the Constitution by a single line or letter, but he enlarged the Constitution like no other leader.  As in so much else, Whitlam was the Great Enlarger.

    He did it in three ways.

    First, by pointing the Labor Party to the parts of the Constitution which were relevant and achievable.  As he said in 1961, in his first Curtin Memorial Lecture:

    In our obsession with Section 92, which is held up as the      bulwark of private enterprise, we forget Section 96, which is     the charter of public enterprise.

    In that speech, too, he derided the most sacred of Labor’s cows, the socialist objective, as “weak, defensive and apologetic”.  At the same time, he was not apologetic about calling himself a socialist and was, in fact, the last Labor leader to do so.

    Second, in government, he widened the Constitution and its interpretation whenever his legislation was tested in the High Court, starting with the Hamer Government challenge to the Australian Assistance Plan in 1974.  He was justly proud of the fact that no Whitlam Government laws were ever held to be unconstitutional.

    Thirdly, most relevant of all, he enlarged the Australian Constitution by the use of the external power, and by enshrining key laws within covenants of the United Nations and the International Labor Organisation.  The Racial Discrimination Act is an outstanding example.

    And here I make the claim that the connections Whitlam made between what we do here and our standing in the world represents his distinctive expression of Australian patriotism – rational, authentic and deep patriotism.

    Let me give a specific example.  In two visits to Papua New Guinea in 1970 and 1971, as Opposition leader, he proclaimed independence for PNG by 1976.  In Government, he advanced the time-table by a year.  The independence ceremony in Port Moresby in September 1975 was the last time Sir John Kerr and Whitlam appeared in public together.  During the 1970 visit, his meetings with Michael Somare were tracked by ASIO.  After he addressed 10,000 Tolai at Rabaul, Prime Minister Gorton said he would have “blood on his hands” if there were any violence on the Gazelle Peninsula.  The Minister for Territories, CEB Barnes, thought PNG might be ready for independence in 25 to 100 years.  This was probably majority opinion in Australia.  Seven Australian Prime Ministers attended Whitlam’s Memorial on 4 November 2014 – with five Prime Ministers from PNG, including Michael Somare.

    How did Whitlam turn around Australia’s stance so completely, so quickly?  I remember vividly the day in Port Moresby in January 1971 when he dictated the thoughts which we worked up as the definitive statement on PNG independence:

    All Australians must now realize how damaging and    dangerous a reputation Australia’s present policies produce.  What the world sees about Australia is that we have an aboriginal population with the highest infant mortality on earth, that we have eagerly supported the most unpopular war    in modern times on the ground that Asia should be a      battleground for our freedom, that we support the sale of arms to South Africa, that the whole world believes that our immigration policy is based on colour and that we run one of the world’s last colonies.  We may profess our good intentions      and feel that we are victims of special circumstances but the combination of such policies leans heavily indeed on the world’s goodwill and on Australia’s credibility.

    The true patriot therefore will not seek to justify and   prolong these policies but will seek to change them.

    It is upon his determination to protect and advance Australia’s reputation and standing in the world that I stake my strongest claim for Whitlam’s contemporary relevance.  I deeply believe that if the Labor leadership had taken its stand clearly on Australia’s international reputation and international obligations on refugees from the beginning, in 2001, we would not have had fourteen years of this malignancy, eating away at our national self-respect.  Of course, Australians care about “who comes here and the circumstances in which they come”.  But, given leadership, they do care for Australia’s good name in the world.  How else were Whitlam and Don Dunstan, together with quite small public interest groups in the universities, churches and unions, able to persuade the Labor Party in 1965 to abandon its most cherished tradition and Australia’s deepest fears embodied in the White Australia Policy?

    So I stress the importance of making connections in Whitlam’s approach to policy.  But I am bound to acknowledge that there were disconnections when it came to implementing policy in government.  The connections were Whitlam at his most constructive; the disconnections the most damaging.  No appraisal of his contemporary relevance can omit the failures, and the lessons to be learned from them.

    In his book The Whitlam Government, Whitlam himself makes a significant admission.  The matter-of-fact way he puts it masks the pain it cost him to make it.  He wrote (p.195):  “The chief economic failure of my Government resulted from the wage explosion of 1974.  In part, our failure was a failure of communication, our failure to persuade the trade union movement to accept the central concept of Labor’s program.”

    He then spelt his definition of the meaning of equality in modern Australia: “That central concept was this: in modern communities, even the wealthiest family cannot provide its members with the best education, with the best medical treatment, the best environment, unaided by the community.  Increasingly, the basic services and opportunities which determine the real standard of life of a family or an individual can only be provided by the community and only to the extent to which the community is willing to provide them.  Either the community provides them or they will not be provided at all.  In the Australian context, this means that the community, through the national Government, must finance them or they     will not be financed at all.”

    That is the bed-rock of the Whitlam Program, with its over-arching theme of a more equal Australia.  Then comes his painful admission: “I have to acknowledge that this philosophy was never really accepted by the Labor movement of Australia at any time after the election of its own Labor Government.”

    In a generous review in The Age, Sir Paul Hasluck described the book as “the longest trumpet voluntary in political literature”. But it seems to have escaped Sir Paul that there could hardly be a more mortifying admission than that the very core of Labor support had not accepted the relevance of the Whitlam Program to its immediate concerns.  By contrast, the Hawke and Keating Governments succeeded in persuading the unions to accept the concept of a social wage, and, through the Accords, made it the basis of their transformation of the Australian economy.

    Whitlam notoriously said: “I don’t mind how many prima donnas there are in my Cabinet, as long as I’m prima donna assoluta”.  It was a throwaway line that actually highlights both the strengths and weaknesses of the Whitlam style of government: individual brilliance against collegial disarray.  There was a serious gap between the primacy he gave to Parliament, to parliamentary government on one hand, and the operation of its most distinctive feature, the Cabinet, the great engine of parliamentary government.  Cabinet embodies the two principles that make parliamentary democracy work effectively – Cabinet solidarity, and answerability to Parliament.  Cabinet is the grand committee of the nation.  Bob Hawke’s superb chairmanship skills made his Cabinet the most successful in our history.  A properly-run Cabinet would not have enmeshed the Whitlam Government in the toils of the loans affair.

    Nevertheless, while the orchestration was sometimes discordant, the Whitlam Government was not a one-man band, although Gough himself scarcely discouraged the notion.  “What would happen if you were run over by the proverbial bus”, Mike Willesee asked him in 1974.  “In the light of my government’s public transport reforms, that is highly improbable”.  But the free rein Whitlam gave his Ministers did become the basis for its record of achievement.  The one thing he expected was that they would act in the spirit of the Program, especially as set out in the It’s Time Policy Speech.  As Kim Beazley Snr said: “The Platform is the Old Testament; the policy speech is the New Testament”.  He was only half-joking.

    There will never be another Policy Speech like it.  At least I devoutly hope so, because I hope that the conditions which produced it will never be repeated.  That is, I hope fervently for the sake of Australian parliamentary democracy that the Australian Labor Party will never again be out for 23 years, or anything like 23 years.  We cannot fully understand the nature, content and purpose of the It’s Time  Policy Speech, unless we place it firmly in the context of those 23 years.  Nor, for that matter, can we fully understand the conduct and fate of the Whitlam Government without understanding the sense of urgency and expectation those lost 23 years produced.

    There were outstanding Ministers.  Think of Bill Hayden, who built Medibank – with its vital principle of universal access to health care – so strong that it defied seven attempts by the Fraser Government to dismantle it and enabled the Hawke Government to restore it as Medicare.  The attacks on its basic principles by the present Federal government are, of course, part of its current turmoil.  Contemporary relevance indeed!

    Again, Hayden had progressed far towards establishing a national superannuation scheme.  Keating accomplished it, and Labor’s role as the custodian of superannuation, and its true principles, remains, or should be, one of its greatest electoral assets.

    Think of Lionel Murphy, whose transformational law reforms constitute almost a parallel program.  His concerns about the accountability of the national security apparatus remain a question of fundamental relevance to Australian democracy.

    Or think of Al Grassby.  For dismantling White Australia (“Give me a shovel and I will bury it”, he said to a sceptical reporter in Manila); for establishing multicultural Australia, he paid a high political price.  He lost his seat in what Whitlam called Australia’s first overtly racist campaign in 1974.  We may think we have come a long way since 1974.  On the other hand, we may think that the story has deep contemporary relevance, certainly in terms of the need for unremitting vigilance in the work of building a more inclusive and tolerant Australia.

    I think, in particular, of Tom Uren, who breathed life into the most original and wide-ranging of all the Whitlam concepts, really the heart of the Whitlam project – national involvement in cities and regional centres.  The restoration of his Department of Urban Affairs is again urgent and relevant to the Australian people in almost every aspect of their daily lives.

    These examples remind us of a largely neglected, if not forgotten, aspect of the Whitlam project – how much, both in development and implementation, the Whitlam Program was a collective effort, how much he sought and welcomed the ideas and advice of others, inside and beyond the Labor Party.  Many years later, I suggested that he should acknowledge that “the Program did not spring, like Minerva, fully armed from Zeus’ brow”.  He agreed entirely, but insisted that he was not going down to posterity confusing the Greek and Roman gods.  Gough thought Zeus more appropriate than Jupiter, so Minerva had to give way to Athena.

    This aspect of the Whitlam project, as a cooperative and collaborative effort, will, I believe, become increasingly relevant to Labor’s mission, as Australia moves into a more complex era, with its communities more dissociated, its voters more volatile, its competing interests more vocal, its public discourse more discordant, if not debauched, its media ever more pervasive.

    More than a century ago, Alfred Deakin complained about the impossibility of governing “with a reporter at one’s elbow”.  We may speculate how Gough would have coped, in a world of instant response, endless spin, the ten second grab and the cacophony of self-appointed pundits.  I think I know the answer.  Brilliantly.  Three reasons: He was the master of the one-liner before the term was invented.  He would have dominated the mainstream media by open, long and frequent press conferences.  And, above all, he would have refused to relegate Parliament to its present humiliating role as an almost incidental channel of political communication.

    Almost our last collaboration, stretching across more than 40 years, was the Foreword to Troy Bramston’s splendid collection, The Whitlam Legacy.  Gough knew it would be his last serious word on Australian politics:

    May I make one valedictory point: never forget the primacy of Parliament as the great forum for developing, presenting and explaining policy.  This seems to me the best response we can make to the unprecedented demands now made on our leaders and representatives by the relentless news cycle, 24 hours a day, seven days a week.  If we develop, define and defend our policies thoroughly before their implementation, we will be much less likely to be blown off course by the accidents and aberrations inseparable from modern political life.  And Parliament is by far the best place to achieve it.

    This was the precept and practice of a life time.

    Parliament is, or should be, a marvellous resource, and it has been the anchor of our national life longer than almost any country in the world and, by the standard of the suffrage – the right to vote – more democratic longer than any.  But if the Labor Party is to survive as the prime mover in the development and implementation of the public polity – the party of new ideas – its policy makers will need to draw on all the available resources, reaching out beyond its own resources and ranks.  This points to a future role for independent but dedicated resources like the Whitlam Institute itself.  This was Gough’s own deep hope as he watched the Institute grow during his rich and mellow autumnal years.

    Partly because of his long and active public life, there is a timelessness about Gough Whitlam’s legacy, extraordinary for a working politician who reached the heights of his achievement forty years ago and whose Prime Ministership lasted only three years.  But I always emphasise that Gough Whitlam was also very much a man of his time.  His vision of a more equal Australia, a more independent Australia, a more inclusive, generous and tolerant Australia, a more forward-looking and outward looking Australia, belongs to all time.  But the means by which he sought to advance Australia towards that vision reflected his own times, the influences, pre-occupations and demands of his time, the political, constitutional, social and economic opportunities and constraints of his time.  Hence his insistence on contemporary relevance.  Here in St. Kilda Town Hall, closing his great campaign in 1972, he invoked Ben Chifley’s “light on the hill”.  His program was not the light on the hill; but he shone a bright light along the path.

    Far be it from me to presume to put words into Gough Whitlam’s mouth, at least now that he cannot speak for himself.  But I do believe that his first advice to his successors – the Labor leadership, the members, supporters and well-wishers – as they pursue their tasks of shaping and re-shaping Labor policies, Australian policies, for the 21st century, in times and circumstances every bit as daunting and challenging as those he faced in his time – I believe that his watchword would be for them, as his instruction was so often to me:

    “Contemporary relevance, comrade”.