The great health divide

Australians are only too well aware that their health care system is increasingly unreliable, indeed dysfunctional. Surely this is an intolerable situation for a wealthy country with a huge budget surplus.

Public hospitals have major problems because of ever-increasing demand, under-funding, and shortages of appropriately skilled health professionals. The essential continuum of care that should link primary, community, and hospital services is made all but impossible because of the jurisdictional inefficiencies associated with the great divide between Canberra and the states.

Planned surgery is rationed, general practitioners must raise their fees to survive, and specialists’ fees make it increasingly difficult for a large number of Australians to benefit from their care. Personal finances are increasingly a major determinant of health outcomes. This is not good enough for a wealthy country like Australia, particularly when the major barrier to progress is political intransigence, rather than lack of policies to address these issues.

What follows is a discussion of four major areas of reform required to facilitate improvements in all problematic areas of our health system. They are the problems created by the federal-state divide, a failure to address workforce issues and the related restructuring of primary care and hospital reforms.

Bridging the federal-state divide

Australian consumers, of course, are only too well aware of the constant bickering between the state and federal governments over who is responsible for the problems in the health care system. Under the Australian Constitution, the federal government can purchase health care for its citizens, but not provide it directly. This they do through a variety of arrangements, such as the Medical Benefits and Pharmaceutical Benefits schemes. The federal government contributes tax dollars to the states to help them with their health care responsibility, namely the running of public hospitals.

The Prime Minister has acknowledged that, if policy makers were to start from scratch to design a new Australian health care system, they would not do it this way again. The federal Health Minister, Tony Abbott, has described the current arrangements as a “dog’s breakfast of a system”.

No individual reform is more important than developing a mechanism by which the country can have a single source of funding for the planning and implementation of the health care system needed by contemporary Australia. Fundamentally, such reforms are crucial and will require considerable political leadership to achieve them. They must involve the pooling of all federal and state funds for redistribution by one planning authority that acts in a patient-focused manner to ensure that health care is targeted, integrated, fair, and cost-effective.

The pooling mechanisms could be played out in a number of scenarios but only one seems viable.

This scenario would see pooled funds made available to a third party: for example, an Australian Health Care Corporation that would be owned by Australians, but not by either state or federal governments. The Corporation would have a board with very heavy consumer involvement and report to a governing body of state and federal political leaders.

This model has many attractions, including the abolition of current inefficiencies associated with health care provision across state borders. In reality, current political tensions make it necessary for those who advocate such a model to accept that Australia must immediately embark on a journey toward a single source of funding, starting with individual states and the Commonwealth agreeing to pool funds used for programs for which they share responsibilities. Such trials could be regarded as experiments, with lessons learnt continuously improving the model and perhaps attracting other states to embrace a similar approach. Australians must not let this essential reform remain in the political “too hard basket”.

Addressing workforce shortages

The nation has a major shortfall in the number of skilled health professionals needed to prevent illness and deliver health care to Australia’s communities. So often now, governments find themselves in the media spotlight, as headlines detail the lack of beds available in public hospitals. Governments typically react by providing additional monies to correct the situation, only to find there are no nurses available to open hospital beds. The average nurse in Australia is 47-years-old. Remunerations and conditions must be made attractive to those who are drawn to this vocation, and Australia needs at least 1,800 more places for nurses in the country’s universities.

There are insufficient numbers of doctors due to the increasingly casual nature of the medical workforce; misdistribution of the workforce; and increasing reports of professional dissatisfaction, which might deter young people from a medical career. Allied health professionals are also in short supply and this is particularly true in the public sector because remuneration for such professionals is now very much more attractive in the private sector.

The recent Productivity Commission’s report on the health workforce contains several sensible suggestions none of which were acted upon at the recent COAG meeting. Disappointingly however, the report failed to recommend that Australia should become self-sufficient in terms of training the professionals it needs and did not bite the bullet on the number of additional HECS funded places we need in our universities for students of the health professions.

Remodelling primary care in Australia

Two much-needed reforms will require the remodelling of primary care. The first demands that much more emphasis be placed on preventing illness. The second necessitates the restructuring of primary health care so that doctors can care for many patients in a community setting who are currently being sent to hospitals.

In the delivery of primary health care, the Australian system is becoming increasingly less fair. In many poorer socioeconomic areas, doctors have little choice but to bulk-bill. When pressures force them to attempt to ask for co-payment, we know that a number of patients will stay away from the doctor’s surgery. The situation exists where, in some areas, doctors have to make their income through the volume of services they provide, whereas elsewhere, where the average person can readily afford a co-payment, doctors can provide a better quality service. This means that, increasingly, those Australians whose lifestyles are putting them at risk for the development of major illnesses and who need the most quality time with their doctors often receive the least.

Australia needs to explore alternative models of remunerating general practitioners so these difficulties can be overcome. To do so, the country must experiment with programs that see a move away from the exclusively “fee-for-service” payments that currently characterise the primary care system. This involves exploring, as other countries have done and are doing, the appropriateness in contemporary Australia of offering general practitioners up-front payments - “contracts” to care for patients with chronic and complex diseases, with such remuneration making it possible for them to look after patients at home rather than sending them to hospital. This is the ultimate solution for addressing the hospital crisis.

Doctors need to be part of primary health care teams where health care professionals, such as specialist nurses and other allied health professionals, are available to provide many of the services currently provided by doctors. This means extending Medicare payments to health professionals other than doctors (one of the sensible recommendations in the Productivity Commission’s report). The primary health care team would focus on personal needs of the patient and pay a considerable attention to individual health plans to help people prevent illness.

Only part of a general practitioner’s work needs to be remunerated in this way, with a number of standard services continuing to be available through a “fee-for-service” mechanism. In New Zealand, such a system exists and, without any coercion, 80 per cent of general practitioners have embraced such a model of care. The major stumbling block here is that the model requires federal and state governments to pool funds to allow the appropriate business plans to be developed.

Hospital reforms

Particularly in recent years, there has been insufficient political honesty about problems within the hospital system. Many consumers feel that no matter which public hospital they attend, they will find a broad range of services available, including those for the management of emergencies, and that all these services will be of similar quality. Given the workforce situation, this is certainly not true and, indeed, is never likely to be true.

Nothing is more important in Australia, in terms of improving quality and safety, than exploring with the public the reality that role delineation for individual hospitals will ensure that the services they do offer, although not the full range, are of the highest quality. Hospitals should be networked so they create, in a given region, “a string of pearls,” with each hospital offering programs of excellence where the workforce skill mix is available to do the job properly. Certainly, no matter where an Australian enters the hospital system, they should be triaged and assisted in moving to a facility that does have the capacity to care adequately for their current problem.

Even if Australia had the appropriate number of health professionals, the opening of additional public hospital beds so critically needed at the moment is not the ultimate answer. The primary care remodelling discussed above will provide the best solution for the clearly unsustainable pressure on the country’s hospitals.

Current data proves beyond doubt that the almost $3 billion tax dollars used each year to support private health insurance does not achieve the goal of relieving pressure on the public hospital system. Private hospitals provide a range of very different services to those that place pressure on public hospitals. What is needed is a genuine partnership between private and public hospitals, with considerably more of the private health insurance dollar going directly to hospitals rather than to third party payers. With appropriate leadership, policy makers can do far more to promote synergy and collegiality between private and public sector hospitals.

The way forward

At the Health Care Summit, delegates agreed unanimously that federal government should immediately establish an Australian Health Care Reform Commission. The Commission would be composed of leading policy bureaucrats from state and federal departments of health, experts in change management, and clinical and consumer leaders. The job of the Commission would not be to generate policies, but to work on implementation strategies. By its very nature, this would be a collaborative effort between state and federal governments, the bureaucracy, clinicians, and consumers.

Without the best brains available coming to work every day to work diligently on the reform agenda, it is hard to imagine progress being made with these urgently needed reforms. Of course, the first step involves a degree of political leadership and courage to make this happen. That courage should be boosted by consistent polling, which makes it clear that there is no domestic issue as important to the Australian community as restructuring and improving the health care system to provide Australians with the care they want, very much need, and can afford.