Regional control and centralised funding make a better health system

What would a new health care system look like? Under the umbrella of my new national healthcare system proposal, all of the health and aged care responsibilities that are now shared between various state, territory and federal governments – and the various departments within those governments - would be united. It would see all funding from both levels of government pooled and distributed to regional health authorities on the basis of population and special needs.

The aims, or goals and targets, would be set by the federal government. As we cannot cut the states totally out of the picture, their role would be to monitor quality. Regional Health Boards (RHB) would be responsible for delivering prompt and affordable services in their areas. These RHBs would consist of representatives elected by the community and would include service providers, consumers and health professionals.

Specialist high-intensity services, such as neo-natal beds would still be delivered by specialist teaching hospitals and access to high-care beds would be provided directly by the federal government.

It would be a universal system, based on the need for services and not on the ability to pay.

The question of what specific services would be delivered to meet the needs of the community would be a decision for the individual RHB.

Our health system is under increasing pressure from a range of factors such as an ageing population, higher expectations, and increasingly expensive new technology and medications. Under those circumstances it is clear that we can not afford wastage of any sort.

But there is an enormous level of waste in our existing “dog’s breakfast” of a health system. Often this wastage is a direct result of cost shifting between federal and state/territory governments. It also occurs when the particular services an individual requires is not available and a less effective, or more costly, service is made available instead.

Waste is also occurring because we put so little effort into preventative medicine. In fact, our current funding model works against prevention as it is treatment-focused and funded.

We also waste about $2.5 billion annually by subsidising private health insurance products rather than directly funding health services, or looking at a specific “Gold Card” system for all Australians over 70 years of age.

Money is also wasted because we do not adequately fund or support the medical workforce - particularly our GPs and nurses. There is pressure on emergency departments because many doctors can not afford to bulk-bill and do not practise after hours. Many people simply cannot afford to pay up front for a doctor’s appointment and associated medications, and so when their budget is stressed they head to the nearest hospital emergency department.

Spending valuable dollars training nurses but then not adequately supporting them when they enter the workforce leads to many thousands leaving the profession after negative experiences. This is not just a waste of resources but also a tragedy for those individuals involved.

Again there is waste when allied health professionals, such as physiotherapists, podiatrists or psychologists are excluded from the public system and patients are sent off for expensive surgery instead. When these health professionals can only be seen privately, those on low incomes often can not get the rehabilitation they need. There is waste when dental services are not publicly funded and are therefore unaffordable for many, particularly older, Australians whose diets often deteriorate as a result.

Another example of how we currently waste money is the high level of hospital admissions we still have, despite more operations being done as day surgery. The problem is that many community services are significantly underfunded. Their unavailability causes people to be admitted to hospital, or kept in inappropriate and expensive high-care beds for too long – a totally inefficient use of public money.

People who are drug and/or alcohol dependent who are unable to find community-based services also end up in hospital. The same applies to the elderly because there are not enough hostel or nursing-home beds. Add those who have mental illnesses who yet again cannot find support in any community setting, and the result is a huge waste of resources as well as inappropriate treatment being delivered.

We currently spend 8.9 per cent of our GDP on health, which, compared to other OECD countries, is about average. In terms of health outcomes, Australia is above the OECD average. The indications are that we spend roughly enough money on health services, so the solution to our current problems is not just pouring more money in. I argue that we can be smarter in how we spend what we now allocate to health.

A system of RHBs would offer more flexibility, as it would allow each region to address its own specific needs. It would also allow communities to have more of a say in what services they want, thus reflecting the diverse needs of the Australian population.

Regions would need to manage their budgets in the most effective and efficient way and this would provide funding incentives for preventative care – basically incentives for keeping people out of hospital. It would also be an incentive for maximising health outcomes and offering the most effective treatment based on results.

It has been estimated that a change to a single level of funding would save at least $2 billion annually. Add that to the $2.5 billion that could be saved through the abolition of the private health insurance rebate, and we could have a handy start to tackling many of the problems plaguing the current health system, and provide extra support for the groups in our community (such as Indigenous Australians) whose health status is poor.