An iron clad guarantee rusts quickly

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.