Health Reforms
Health reform needs a federal fix first
- George Williams
- July 28, 2009
We all pay for having a broken federal system through healthcare that fails to live up to its promise. Now the National Health and Hospitals Reform Commission has presented a bold vision of reform.
By recommending a federal takeover of primary health care, basic dental care and aged care, it proposes one of the largest shake-ups of government responsibilities since Federation in 1901. If the plan is to succeed it will have to be supported by a parallel process of reform to our federal system.
As the commission’s report, A Healthier Future for All Australians, says, the present system is based on a defective model that wastes too much of the $94 billion spent each year. This leads to thousands of premature deaths, reduced life expectancy and untold avoidable pain and suffering on the part of Australians and their families.
Federalism is by no means the only cause of these problems, but it has long been a key driver. Australia has long run its health services within a federal structure that promotes duplication and waste. It also creates uncertainty about who is responsible for areas of care such as dental and mental health.
Australia’s federal system not only lends itself to bad outcomes, it makes reform much harder. This has become obvious in areas such as health, education, childcare and water policy. Federalism is too often the elephant in the room, with governments preferring to respond to its flaws with expensive work-arounds rather than addressing the faults as part of the solution.
In health, these work-arounds can come unstuck over time. This produces complexities mirroring the underlying federal flaws, such as cost shifting among governments and a willingness to blame others. Too often, issues of control and federal-state conflict come to the fore instead of questions such as how to design a patient-centred system that best meets the needs of the public.
Our federal system imposes big costs not only in terms of time and taxpayers’ money, but also in how it can rein in bold visions. Plans that need to gain the support of every government, as would much of that of the commission, often fail or must be so watered down by compromise that they fail to meet their goal. Not even federal bribery of the states is a sure way forward, as shown by the failure of John Howard’s $10 billon plan for the Murray-Darling to bring about a coherent national approach to that critical problem.
The commission’s plan cannot be fully achieved under our present federal structure. The Commonwealth lacks the power to go it alone, especially in areas such as prevention and early intervention, while the states will be unlikely to want to give up control. Health reform will become unstuck unless it also comes with federal reform, perhaps even a referendum to change the constitution. One cannot be achieved without the other. This demonstrates why, if you care about the state of our health system, you need also to care about the state of the federation.
One advantage in the Federal Government’s announcement that it will not respond to the commission’s report in the next six months is that it gives time to explore the federal reform options. The starting point should be recognition that, to achieve a modern, efficient health system, Australia will also need a modern, efficient federal system to support it. We cannot expect to build as complex an outcome as a world-class health system on a structure of government designed in the age of the horse and buggy.
The Federal Government has achieved early success in tackling reform through the Council of Australian Governments, the peak forum of political leaders. That body will no doubt be pressed into action on health reform. While it is the right body for reaching agreement among governments, it does not have the power to entrench those decisions, or the ability to bring about deeper structural reform. COAG can only bring about a suspension of the ‘‘blame game’’, it cannot fix its cause. COAG outcomes are also vulnerable to changes in government.
COAG cannot by itself drive the federal reform needed to support wholesale change to the health system. This must involve a broader group of Australians, and a wider debate than just on health. We need as bold a plan for our federal system as has been delivered for the health system. This will require a rethink of how power and money are allocated among all tiers of government.
In his new book Battlelines, the Opposition MP Tony Abbott has put one option on the table. He acknowledges that ‘‘tackling the dysfunctional federation turned out to be a lost opportunity for the Howard government’’ and that fixing the system is the nation’s ‘‘biggest political problem’’.
Abbott proposes that the Commonwealth be able to pass laws ‘‘for the peace, order and good government of the country’’, words that are constitutional code for having the power to make laws on any topic whatsoever.
His idea is worth considering as part of the health reform agenda. It would not so much abolish the states as render them obsolete. It could work only if the Commonwealth’s extra power to make laws was balanced by the states having the responsibility and the money to implement national laws and services free of federal micro-management.
Australia needs to do better in delivering basic services such as health. The commission’s report is a welcome new plan for how this might be achieved in proposing that health services be redesigned around people.
However, unless we fix how we are governed, health reform will also inevitably be shaped by the flaws in our federal system.
George Williams is the Anthony Mason professor of law at the University of NSW.
System 50 years out of date for chronic illness
- James Gillespie and Robert Wells
- July 28, 2009
Many people with chronic health conditions have more than one disease, which makes caring for them much more complex. Unfortunately, the way our health system is structured now, and the way it is paid for, reflects the health needs our society had about 50 years ago.
Then the average age of the population was much lower and most health activity was around episodic care, when people were treated for a health problem that would be expected to ‘‘get better’’ at some point.
This capacity remains vital in our world today, but many of us now have health problems for which there is no cure (like diabetes) and which have to be managed to enable us to continue to lead productive and satisfying lives in the community.
Extensive evidence from around the world shows that chronic conditions are better managed within the primary care sector, with hospitals providing relevant interventions for acute episodes. The better the management in primary care, the fewer acute episodes should occur.
In this way the final report of the National Health and Hospitals Reform Commission provides a good blueprint for future health reform in Australia.
The commission has placed considerable emphasis on the system’s ability to deal with the increasing burden of chronic disease in the community. Its report has a shopping list of proposals that, taken on their own, would improve particular aspects of patient care. Some cover gaps – for instance, the dental scheme would start to remedy the most gaping hole in health care.
Depression and other mental illness are the grim companion of much chronic illness. There are many useful ways to improve and integrate our overstretched mental health services with the rest of health care. Those most in need of medical care often report the greatest trouble in gaining access to out-of-hours services – often adding to the strain on hospital emergency services. The report offers some practical methods, including telephone coaching services, to relieve this pressure.
More importantly, there are some structural changes that offer openings for long-term changes in the way health is delivered – away from the acute, hospital-centred model towards a system that puts more resources into prevention and care in the community.
Most of these start from changes in the way health care is financed, not in the big bang of a Commonwealth takeover, but smaller adjustments that leave a lot of scope for invention, for state, private and local initiatives.
Under the biggest change the Commonwealth would take financial responsibility for all primary and community-based health care. This covers general practitioners, community health nurses and most of the services outside hospitals, including prevention. The Federal Government would take financial responsibility in various areas of care and be able to use its financial clout to aid the linking up of services.
This would start with the organisation of the health professionals themselves.
One of the successes of the 1990s were regional organisations of general practitioners funded by the Commonwealth to work independently to improve services. These Divisions of General Practice would be broadened to form Primary Health Care Organisations drawing in the health professionals involved in comprehensive primary care and covering a wider population base.
If implemented, the commission’s plans offer the chance to fundamentally improve the way chronic care is managed – and allowing the scope for wider professional autonomy.
What would this mean for patients? Those living with chronic conditions would have a choice of registering with a practice, giving them a recognised medical home. Registration would remain voluntary in deference to medical worries about freedom of choice.
It would enable improvements in services, borrowing British and New Zealand models. At present doctors are paid for each distinct episode of care, giving some incentives to overservice and certainly none to help the patient to mange their illness more effectively and reduce their need for medical care.
Registration offers new possibilities of bundling up payments, so medical professionals are paid for a whole course of care or over an extended period. It also makes it easier for a practice to work out a comprehensive care plan by integrating many different specialities. Patients would face less of a maze when they navigate the system.
If primary care is strengthened, patients may see other improvements. Australia has struggled for years over the problems of building effective e-health systems. An e-health record attached to each patient would reduce the dangers of medication errors – every doctor would know existing prescriptions – and reduce the wearisome business of a patient having to explain themselves to every new professional. Progress has been stymied by the failures of massive bureaucratic e-health schemes. The commission supports a patient-controlled e-health record, shifting from the top-down approach that had many worried about privacy.
The commission started its work in a very different financial climate. Many hopes for sweeping reform have withered with the collapse in Commonwealth revenues. But many of these changes involve small investments, which, if made, promise large returns – some in savings, but more in improved quality of life for the growing numbers living with long-term illnesses.
Dr James Gillespie is deputy director of the Menzies Centre for Health Policy at the University of Sydney. Robert Wells is director of the Menzies Centre at the Australian National University.
http://www.smh.com.au/national/trim-taut-and-terrific-figures-20090727-dyr7.html
Trim, taut and terrific figures
Mark Metherell
July 28, 2009
IF IT all works, full blown health reform will add two years to our lives and save $4 billion a year.
Rather than having to wait for treatment at clogged clinics, patients would be given vouchers to go to private operators.
The rights of patients to prompt treatment would improve dramatically, too. Under national access targets, they should wait no more than two days to see a GP, and the wait for planned surgery should be no more than three months in most cases, and no more than a month for high priority cases.
And everyone would be able to choose the health-care plan that best suited them from a system in which for-profit health operators competed with government agencies.
These are just some of the proposals that the National Health and Hospitals Reform Commission put to the Government to turn health care into a more ‘‘patient-responsive system’’.
The recommendations may seem revolutionary, but the commission’s 11 health experts believe they will work. For the past 16 months they have gauged the frailty and the potential of the health system to cook up a recipe for health care in 2020. The result has upsides and downsides.
Older people, for instance, could get their dentures fitted promptly rather than waiting years for an appointment at a public clinic.
But come time to move into a nursing home, and those who want to secure a high-care bed could face accommodation bonds of about $150,000.
Medical records might no longer be stuck in one place.
By 2013 every Australian would have an electronic health record, containing the latest details of their medical treatment, hospital information, and pathology and diagnostic data.
E-health is seen by the boffins on the commission as central to providing a seamless health system in which we can move from GP to podiatrist to psychologist and be confident that each has readily at hand all of the information we choose to allow them to have access to.
The cost of upgrading the health system is expected to be as much as $5.4 billion – and even more before you subtract the large savings imputed from making us healthier and from excising inefficiencies.
Among the commission’s calculations it estimates that by forcing hospital funding onto a more efficiency-focused regime – also known as ‘‘activity-based funding’’ – Australia will save more than $1.3 billion a year.
Such changes would also free up 1.3 million hospital bed days, it predicts.
But the benefits would not only be seen in waiting time and hospital space. The commission says the reforms could also be good for us.
Personal E-health records would improve the efficiency and the effectiveness of health care, it says. And by stimulating greater individual responsibility for health, the electronic records could result in savings of $620 million a year by 2032.
Among the specific health improvements it envisages is a lower incidence of obesity and the huge risk of chronic disease it generates.
This alone could save the nation $2.5 billion a year by 2032, the commission says.
So health reform would be good for all of the nation’s figures.
Links to some important and useful sites :
The Australian Health Care Reform Alliance
http://www.healthreform.org.au/
The National Rural Health Alliance
http://nrha.ruralhealth.org.au/?IntCatId=14
The Australian Government Institute of Health and Welfare for statistics
http://www.aihw.gov.au/index.cfm