An iron clad guarantee rusts quickly

For how much longer can Australians take readily available good health care for granted? Even urban areas are experiencing shortages of doctors and hospital beds. Will it get worse? What are the solutions?

How good is our health system? Figures from the Organisation for Economic Co-operation and Development (OECD) from 2003 show we have a life expectancy at birth of 80.3 years, the fifth in the world. It has increased from 77 years in 1990, and the increase is on a par with that of most comparable countries. We are 16th in terms of infant mortality, 5.2 (per 1,000 live births) compared to Iceland’s 3.0. We have managed this while spending US $2,699 per capita on health which is the 12th highest in the world, and as a percentage of GDP our spending is also 12th at 9.3 per cent.

Public spending constitutes 67.5 per cent of our health spending. The four countries whose public spending is less than 52 per cent all have life expectancies at least two years less than us and infant mortality over 6.1, and the US is one of these countries. So, compared to other countries our health system delivers good outcomes and spends the money efficiently. One might conclude therefore that with a system working this well, we shouldn’t be too worried about changes.

There are, however, other ways of looking at the available statistics. Figures (pdf file 805KB) from the Australian Institute of Health and Welfare show “health gains have not been equally shared across all sections of the population”. So although mortality rates are declining in all age groups at all levels of socio-economic status, the relative mortality rates in the most socio-economically deprived groups compared to the most advantaged groups are increasing. For example, in 1985-7, the mortality rate in males from the most disadvantaged aged 25-64 was 65 per cent higher than the most advantaged but by 1998-2000 that figure had risen to 75 per cent.

When one looks at the more regular users of the health system, there is evidence to suggest that many do not take for granted the ready availability of good health care. The Commonwealth Fund, a Harvard based international health research institute, performs surveys in various countries every few years. In 2005, an in-depth telephone survey of 750 Australians, with some evidence of chronic use of the health system in the community, showed that 34 per cent did not access health care because of cost. Forty six percent who needed a specialist consultation waited more than 4 weeks for the appointment, 19 per cent waited more than 4 months for elective surgery, and 17 per cent waited more than 4 hours to be seen in an emergency department. It would appear therefore that many Australians who use the health system regularly already do not take access for granted. The question is, will it get worse?

For those who have sufficient money, little will change, as is always the case. For most of those who already have problems with accessing the system, the answer is almost certainly, yes, it will get worse. The reason is not the workforce crisis. That is just one very significant contributing factor. The direction our health care system is taking, however, is the major factor which will lead to increasing inequity and increasing inefficiency.

From 1974, when Medibank (succeeded by Medicare) was introduced, until 1996, the Australian health system had been characterised by a very large public health insurance scheme which had aimed to provide universal affordable access to basic health care in an efficient and cost effective manner. The small pre-existing private health insurance system continued to supplement the public system.

In 1996, the direction changed. No longer was the aim to maintain and improve the public health insurance scheme. Instead, “choice” had to be championed and the private system expanded while maintaining a public system for those who were unable to afford the private fees. The publicly funded component of the system had to be seen as predominantly a “safety net” for those who were unable to afford the private system.

This change of direction however, has been gradual. Any abrupt change in direction would have been politically too dangerous. The benefits of private health care and choice needed to be sold to enough of the population with a mixture of carrots and sticks. Sufficient Australians needed to be convinced that the public system should be the “safety net”. Despite setbacks, the agenda continues, and we can expect to see an expansion of private health insurance cover to such things as private emergency departments, radiotherapy, dialysis, prescription drugs, and eventually everything.

One of the temporary setbacks to the agenda has been the issue of “safety nets”. The iron clad guarantee underpinning the Medicare safety net rusted very quickly, but much less publicised is the legislated guarantee that for the next four years the Pharmaceutical Benefits Scheme safety net will become harder to access each year. That’s the problem even with the very obvious “safety nets”, they are never safe from the treasury’s knife. But more important is to understand that the whole of the public health system will increasingly be seen as a “safety net”, as private fees become ever increasing components of medical services, and private health insurance is permitted and encouraged to step in to cover an increased range of services.

Inevitably, the privatisation of our health system and the transformation of the public system into the “safety net” will mean increasing inequity. Those who currently face barriers to access will find the barriers greater, and many who now manage will struggle as the financial bar is raised. Failure to pay medical bills is the single most common reason for personal bankruptcy in the privatised United States health system. That is the direction in which we are heading.

Workforce issues will be even more of an issue as privatisation increases. Already, despite very definite evidence of increasing workforce shortages across Australia, there are seldom significant delays even for elective surgery in private hospitals in major metropolitan centres. Next door in the co-located public institution, workforce shortages are usually one of many factors contributing to the delayed service.

But the privatisation agenda, the Americanisation of our health system, is not just a disaster in terms of equity. It is the most expensive and inefficient way to fund our health system. Spending on health care in the United States is US$5,635 per person per year. In Australia, we spend US$2,699. We live longer and our infant mortality is better. An increasing reliance on a poorly regulated private health sector is a recipe for increasing inequity and inefficiency.

Private health care is much more expensive than public care, for at least two reasons. First, the charges are much higher. In 2001 a study in the Medical Journal of Australia showed that the charges for having the coronary arteries investigated in a private hospital after a heart attack were twice that of the costs in the co-located public institution, using the same facilities. The only constraint on costs in the private system is the capacity of individuals or the health fund to pay. Patients are seldom in a position to question costs. But despite the costs there is no evidence that medical outcomes are any better, and most specialists will tell you that if you are really sick, the best place to be is in the public system because the level of care is better.

Second, there is very suggestive evidence of over servicing in the private sector. For example, the rate of expensive investigation of the coronary arteries after heart attack was assessed in Victorian public and private hospitals in 1999. The rate in private hospitals was twice that in public hospitals. This could be all due to under servicing in public hospitals but the more credible explanation is that it indicates a mixture of over servicing in private and under servicing in public.

Doctors like to help, and when confronted by a problem, they like to use their expertise, and when it is procedural expertise there is an inevitable tendency to use that expertise. In private, no one questions an individual doctor’s decisions. In public there are many constraints. Huge discrepancies in the rates of a whole range of procedures have been documented previously. The inverse care law, "the availability of good medical care tends to vary inversely with the need for it in the population served", coined by Tudor Hart in 1971 still applies. Consequently over servicing, combined with increased charges in a privatised system, leads to a much more expensive health system with no evidence to suggest better outcomes, and the distinct possibility of worse outcomes in patients inappropriately subjected to unjustified low risk procedures.

So what can be done to improve our health system, to increase the likelihood that more Australians can take for granted the availability of quality health care?

First, we need to reverse the direction in which our health system is heading, away from a privatised system with targeted “safety nets” - which are being eroded as you read this - back to a public health insurance scheme of some kind which aims for universal access. That universal access must be to quality health care, not, as is currently the case, to an inadequate Medicare rebate especially for specialists, increased co-payments for pharmaceuticals, year long waiting lists for surgery, and four hour waits in emergency departments.

But more is needed. Medicare as it was, was far from perfect. The emphasis of our health system has been on hospital care, and the approach to non-hospital care has been directed to doctors on an inefficient fee for service basis. Especially as the burden of disease is increasingly related to chronic diseases, we need to move the emphasis to primary care and to preventive care. The current rhetoric even supports such a change in emphasis, but significant political financial and organisational commitment is still lacking.

Without such commitment, the poorly integrated primary care sector, attempting to cope with funding from three different levels of government, and multiple sources within each government, will remain an inefficient mess. Without a whole-of-government approach which involves, for example, departments of welfare and housing, the mental health crisis will be re-documented, unchanged or worse, in five years.

In addition, it is time to engage the community to determine what they want most from the health system. To date the priorities of the system have been determined predominantly by the medical profession and politicians, with the media having a huge influence on the latter. Hence, hospital care, the lack of which always makes a good story, has led the priority list for funding. But already there are examples in Australia of governments and health authorities engaging the community to help to determine priorities and successfully move away from the stereotypic “you can’t close that” response to a reallocation of resources. In that context it was disturbing to note the very negative response of Health Minister Abbott to the concept of citizen engagement as expressed at a meeting of the Australian Health Care Alliance in November 2005.

Despite such negative responses, there must be something positive happening. For some years now there has been a gradual increase in the component of GP income which is derived from sources other than fee for service rebates. It remains small and for specialists the issue has been ignored, despite even the conservative Australian Medical Association (AMA) acknowledging that specialist fee for service rebates for many procedures are inappropriate. The recognition that allied health is a part of the health system and the introduction of taxpayer funds, albeit very limited, for that purpose, is to be applauded.

The recent Council of Australian Governments (COAG) meeting committed $1.1 billion to health. This sounded impressive, but when one recognises that this amount is over four years and is only one tenth the amount of taxes spent on propping up the inefficient and inequitable private health industry, it is a sad reflection of government priorities.

The fact that the state and federal governments managed to commit together to some small improvements in the health system, such as getting young people with disabilities out of nursing homes, should be considered a positive step, but when one sees that the future direction for our health system remains unchanged, such commitment is not encouraging.

Indeed, with the Queensland Premier talking about means tested access to public hospitals, and leading the country in enrolling private fee paying medical students, this new found co-operation between state and federal governments may indicate that all we will see are some minor efficiency gains, some more targeted programs, but a health system destined to rival the US in its inequity and inefficiency as state Labor governments accept and adopt the conservative privatisation agenda.