Introduction: This year marks 40 years since Medicare was established – and 53 years since a general practitioner in Wales, Dr Julian Tudor Hart, described the inverse care law.
Tudor Hart’s legacy raises many critical questions and challenges for contemporary policy makers and health reformers, with inequities in access to dental services one of the most obvious examples, according to academics at the University of Tasmania: Megan Smith, Dr Silvana Bettiol and Associate Professor Kate MacIntyre.
Below they make the case for policymakers, healthcare providers and the general public to become more familiar with the inverse care law, in order to drive reforms that ensure equitable access for those with the greatest need for healthcare.
Megan Smith, Silvana Bettiol and Kate MacIntyre write:
Thirteen years before Medicare was established in 1984, Welsh general practitioner Dr Julian Tudor Hart coined his now-famous inverse care law.
The inverse care law places equity at the centre of resource allocation decision making in healthcare. It is crucial that policy makers understand the implications and impact of this law when navigating the dual challenges of financial sustainability and ecological burden inherent across the Australian healthcare system.
Writing in The Lancet in 1971, Dr Tudor Hart noted that: “The availability of good medical care tends to vary inversely with the need for it in the population served. This inverse care law operates more completely where medical care is most exposed to market forces, and less so where such exposure is reduced. The market distribution of medical care is a primitive and historically outdated social form, and any return to it would further exaggerate the maldistribution of medical resources.”
The failure of successive Australian health ministers, policy makers and health reformers to understand the inverse care law has resulted in significant unintended consequences.
Access to primary care services for Australians in lower socioeconomic areas is increasingly inequitable. Rising out-of-pocket expenses disproportionally impact the more economically disadvantaged, limiting access to preventative care and increasing inequity. Less accessible bulk billing options and increasing co-contributions payments price many low-income earners out of the primary care market.
Paradoxically, individuals living in socioeconomic disadvantage face increasing barriers to accessing healthcare but are more likely to have multiple chronic conditions, worse health outcomes and a reduced life expectancy compared to people living in socioeconomic advantage.
But with limited access to preventative or accessible primary care services, these same people, unable to access medical support within their financial means, risk becoming frequent users of more costly acute health services – think ramped ambulances in overcrowded state hospital systems.
This situation exacerbates the increased inefficient allocation of precious healthcare resources diverted from prevention at a primary care level to treatment at a secondary care level as policy makers responding to the most visible need.
Yet the longer individual and societal risk factors for disease and ill-health are ignored, the more demand is generated for higher-cost hospital-based healthcare into the future, as investment in healthcare prevention provides long-term cost savings.
Whilst increased wealth facilitates access to preventative healthcare for the more affluent in society, reducing the provision of healthcare to needs rather than demands also reduces over servicing.
In Australia more wealth enables more consumption of healthcare services, which can be compounded by fee for service funding models, which incentivise investigations and intervention.
Increasing levels of intervention can also lead to higher rates of iatrogenic harm and ineffective and inappropriate overuse of healthcare. On average, approximately 30 percent of healthcare is of low value and 10 percent harmful and there are diminishing marginal benefits with increasing expenditure as well as significant costs for both individuals and the environment.
Compelling example
Inequities in access to dental services is perhaps the most compelling example of the inverse care law at work in the Australian healthcare system. Excluded from Australia’s Medicare safety net, a key determinant of individual access to good oral health in Australia is the individual’s ability to pay.
Highlighted in a recent report from The Gratton Institute, the stark reality is that those Australians on the lowest income, have the poorest oral health outcomes and the least access to preventative care.
Increasingly research is demonstrating the long-term spill over effects of these policy decisions. A 2015 Finnish study of over 8,000 people revealed that poor oral health was an indicator of an increased risk of coronary heart disease, acute myocardial infarction, diabetes, and early death.
A 2023 article from the longitudinal Ohasama study illustrated the importance of dental health, after documenting the relationship between mild periodontitis and cognitive decline in 179 adults aged 55 years and over.
Yet here in Australia we have instituted a system that, in prioritising initial saving to the Medicare budget by precluding dental care, unintentionally forces individuals with fewer means to forego unaffordable dental care in the short term – while also increasing their likelihood of requiring more costly acute care services in the years and decades to come.
This policy habit of kicking the cost to the overall health system further down the road highlights the inefficiency of failure demand, or demand that is generated by a failure to address problems created elsewhere in the system.
In this context it is important to ask how the concept of opportunity cost is applied to healthcare resource allocation decision making.
Do methods accounting for our understanding of broader spill over effects, adequately account for those policy choices that generate future benefits to the Australian healthcare system? Or are politicians and service planners too focused on immediate budgetary impacts?
Wiser investment
An example of this can be found in a 2023 publication from Victoria, Effects of Private Health Insurance on Waiting Time in Public Hospitals, which found limited merit in successive federal governments’ policies to reduce elective surgery waitlist times by shifting demand from public to private healthcare systems through incentivising private health insurance (PHI).
The Australian Government pays $6.5 billion per year in rebates to encourage Australians to purchase PHI and an additional $3 billion to cover private inpatient medical services. However, this Victorian study found “a one percentage point increase in the PHI take-up leads to about 0.34 days (or 0.5 percent) reduction in waiting times in public hospitals on average”.
Would a wiser investment be a Medicare-style funding of dental services?
At the very least these options are worth robust analysis and considered debate. In the rush for ‘efficiency’, has the adoption of neo-classical market structures reinforced unintended negative consequences, exacerbating healthcare cost and inequality within the Australian population?
We should remember markets alone have no conscience or allegiance to broader social contracts, they do not pursue community goals seeking to achieve the right mix of healthcare programs and have no concept of maximising societal health benefits or collective good.
Policy settings can reinforce vicious, unsustainable, and inefficient cycles, compounding inequitable healthcare provision and embedding long-term costs.
If the current allocation of healthcare resources is inefficient and unsustainable, what would it take to embed the principle of equity in healthcare policy?
Applying an inverse care law lens to this knowledge challenges decision makers to use resource allocation decisions to accurately align the provision of healthcare to health needs.
Such targeted resource allocation of primary care and other community-based services potentially offers less emphasis on hospital-based care and more emphasis on high-risk primary and secondary prevention, thereby also reducing immediate and projected healthcare demand.
By positioning equity at the centre of our universal healthcare system as an explicit national priority, clear targets for improvement and robust information systems to measure and monitor progress could be implemented. This would result not only in better health for those in lower socioeconomic groups, but a potential overall reduction in acute/emergency healthcare demand in the longer term.
To address the impacts of the inverse care law, the specific health needs of different populations need to be understood. Stronger frameworks facilitating broad stakeholder participation in resource allocation decisions will also be required.
As Tudor Hart’s work reminds us, strong collaboration with community provides valuable insights into the unique needs and challenges faced by different populations, leading to more effective and culturally sensitive healthcare strategies.
This enables targeted interventions to be designed, addressing health disparities and aligning healthcare services with actual needs. Whilst this approach may require further financial investment initially, it has the potential to generate long-term savings as healthcare dollars are invested more wisely.
To achieve this, though, an investment in high-quality, complete, accessible, timely, and accurate data collection and analysis to inform policy decision making is essential.
But to begin this refocus, implementing educational initiatives to raise awareness about the inverse care law and its implications among policymakers, healthcare providers, and the general public is urgently needed.
Three steps
Increased awareness can lead to informed decision-making and foster a collective commitment to reducing health inequities. This could encourage politicians to also consider the longer-term benefits of upstream interventions.
Ultimately we suggest understanding and addressing the impacts of the inverse care law across our Medicare system will likely reduce overall costs, limit generated waste, and decrease the risks of unintended harms.
Such an approach is in line with proportionate universalism, a concept described in the Marmot Review, where actions are universal but at a level that is proportionate to the level of need.
Given the future challenges facing our health system as outlined in the 2023 Intergenerational Report – driven by a variety of factors, including increased demand from an ageing population and technological improvements – this work is never more urgent than it is now.
What might the Australian healthcare system look like, if those with the most need had access to the type and frequency of healthcare they required?
What is needed to achieve this?
We consider the following as essential prerequisites to eliminate the inverse care law by more accurately aligning the provision of healthcare services to need, ultimately allowing for more efficient planning and commissioning of healthcare resources.
First: A universal commitment, explicit across all levels of government, to the ongoing challenge of equity and the reduction of inequity.
Second: High quality, complete, accessible, timely and accurate data to better assess health needs are fundamental to understanding the inverse care law, and our success at eliminating its impact.
Third: To support change, frameworks that facilitate broad stakeholder participation in resource allocation decisions is necessary. We are reminded that for Dr Julian Tudor Hart, his partnership with his community was the cornerstone of his research.
Medicare is an important pillar of the Australian social contract.
On this, its 40th year anniversary, as we struggle to design a sustainable yet affordable universal health system, it seems Dr Tudor Hart’s observations have much to teach us about the limits of market-based solutions in healthcare systems.
• Note from Croakey editor: This article was updated following publication to include a more recent reference on private health insurance
Author details
Dr Kate MacIntyre is an Associate Professor in public health and public health physician at the Tasmanian School of Medicine, University of Tasmania. She has over 25 years’ experience working across research, education and public health practice both in Tasmania and in Scotland. Her research interests are in inequities in health and the social determinants of health.
Dr Silvana Bettiol is a senior lecturer in public health and communicable diseases at the Tasmanian School of Medicine, University of Tasmania. She has over 30 years of teaching and research expertise. Her current research interests are in sustainable health care, and she has extensive experience in oral health research and dental public health, with a notable focus on addressing social inequalities.
Meg Smith is a lecturer in public health at the Tasmanian School of Medicine, specialising in the economics of health care. Her professional career spans over 30 years and has seen her work across several policy areas within health care systems. Her research interests are in health system sustainability and equity issues.
Previously at Croakey
2018: Vale Julian Tudor Hart – what a legacy
See other articles in our #Medicare40Years series
