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As Medicare turns 34, here’s a blueprint for the next steps in health

Alison Verhoeven writes:

On 1 February 1984, Medicare, the current universal health insurance system in Australia, came into effect. It was introduced by the Hawke Labor government and succeeded the original Medibank model introduced by the Whitlam government.

Medicare’s merits

As a universal healthcare or health insurance system, the aim of Medicare is for all Australians to have access to health services without incurring financial hardship. Services of equal quality are available to all according to need, not ability to pay.

Recently the Director-General of the World Health Organization, Tedros Adhanom Ghebreyesus, said he was ‘more convinced than ever that universal health care is not only the best investment in a healthier world, it is also the best investment in a safer world’.

In Australia, Medicare subsidises primary health care services provided by medical practitioners (typically GPs) as well as by specified allied health professionals, and allows for free treatment in public hospitals.

Medicare benefits are also payable for medical treatment provided to private hospital patients. Private patients usually have private health insurance coverage to help meet hospital charges such as accommodation costs, and help meet doctor charges that are above the 75% Medicare rebate benefit.

tweetChanging times

Time moves on, and much has changed in the 34 years since Medicare was born. We are living longer, chronic diseases are a bigger disease burden than acute conditions, and there have been great advances in treatments, diagnostics and pharmaceuticals.

All of these factors have led to health costs that are rising faster than population growth, population ageing, inflation and the economy as a whole. For governments, rising health costs have been outstripping tax revenue growth in recent years. The corollary has been rising and increasingly unaffordable out-of-pocket costs for patients.

Prominent Australian health economist Professor Jeff Richardson said recently he feared increasing ‘Americanisation’ of our health system, where successive governments have tried to privatise more and more of it. But the public health system, which in many ways can be equated to Medicare, has so far acted as a countervailing power. It is the major reason why rising health costs in Australia have been controlled compared to what has happened in the United States.

With all those elements in the mix, the search is on for efficiencies and better ways of organising healthcare in Australia to bring it up to date with 21st century requirements while keeping alive the Medicare principle of quality services for all according to need, not ability to pay.

A patient centred makeover

At AHHA we believe the answer lies in reorientating our healthcare system to patients, patient outcomes and value-based care, rather than measuring success through volume of services provided and the money spent in various sectors.

There are, however, many vested interests in healthcare, and the business of providing healthcare to a population as diverse and geographically dispersed as ours is complex. To modernise and reform the system, the Commonwealth, and the states and territories, will need to demonstrate true leadership.

During 2018, Health Ministers and First Ministers will negotiate and agree new public hospital funding arrangements to apply beyond 2020. This is an opportunity to design a healthcare system that will coordinate and integrate services around patients, focusing on the outcomes that matter to them.

To this end, the Australian Healthcare and Hospitals Association has released a Healthy people, healthy systems blueprint, which I have written about at Croakey before. In developing the blueprint we were guided by health leaders, clinicians and patient representatives from around the nation, across the hospital, primary care and community sectors.

The document advocates national stewardship for the entire health sector through combining a group of existing health bodies to form a new independent national health authority.

This authority would be at arm’s length from government and health departments, reporting directly to the Council of Australian Governments (COAG) or the COAG Health Council. Some of the politics and finger-pointing would be taken out of health reform as a result, enabling the resulting system to be nationally unified but, ideally, regionally controlled. The new body would provide a ‘single source of truth’ for the funding of, and outcomes achieved by, all health services.

Around Australia, one size does not fit all in healthcare services. New governance structures and funding models will therefore need to provide room for regional input and flexibility.

Data collection and reporting will need updating and upgrading nationally to operate in real-time across health sectors, and produce statistics that accurately reflect health needs and outcomes. This will drive intelligent system design. All government-funded and subsidised health services should contribute appropriate de-identified data.

A national health workforce reform strategy is needed. The result should be a workforce that is patient-centred, innovative, flexible, competent, and working to the top of their scope of practice—while also contributing to the design and delivery of health services.

Health services funding mechanisms should encourage health outcomes, not patient throughput. A good start would be trialling a mixed funding formula with a 25% component for achieved health outcomes relating to the top 4 chronic diseases.

It’s time we moved our system on, away from more of the same, and tinkering around the edges. In doing so, we should not lose sight of the universal, and fundamentally humane, healthcare provided through our 34-year-old Medicare system.

This is our call to action to health ministers and governments in 2018—and happy birthday to you, Medicare!

Find out more at ahha.asn.au/Blueprint

*Alison Verhoeven is Chief Executive, Australian Healthcare and Hospitals Association (AHHA). On twitter @AusHealthcare 

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National Suicide Prevention Conference 2014
Racism and children/youth health symposium 2014
Rural & Remote Health Scientific Symposium 2014
2015 conferences
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Population Health Congress 2015
2016 conferences
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