Introduction by Croakey: As the 2021 Federal Budget looms, hopes will rise that the Federal Government will act on all the lessons from the COVID-19 pandemic and a host of inquiries and investigations that have graphically showcased critical gaps in policy.
But the odds are not good, as Jennifer Doggett reports below, after consulting three experts in health policy and government decision making for their insights on why governments avoid expert, evidence-based and well-supported policy advice.
They identify the influence of a small number of powerful vested interest groups as one key barrier to reform, along with a weakened public service with little technical and industry expertise and a rigid portfolio structure which creates funding silos and hinders action on the economic, social and environmental determinants of health.
Jennifer Doggett writes:
“It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things: for the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order.” Niccolo Machiavelli, The Prince
The Government recently announced a record investment in aged care in the upcoming Federal Budget, to address – at least in part – the multiple failures of the current system identified by the Royal Commission into Aged Care Quality and Safety.
While this funding has been welcomed by the sector, some frustration has also been expressed by stakeholder groups, such as the Australian Nursing and Midwifery Federation, which have pointed out that the tragic consequences of these failures could have been avoided if the Government had listened to their repeated calls for change over a number of years.
Aged care is not the only area in which governments appear to consistently ignore calls for reform, even when they come from within their own circles. Last year Health Minister Greg Hunt signed the latest Community Pharmacy Agreement, a $18.3 billion agreement with the Pharmacy Guild, ignoring the consistent advice from experts both within and outside of government (including the Productivity Commission and the Australian National Audit Office) that major changes to this model were needed.
Preventive health, climate change and private health insurance are other areas in which governments appear to studiously ignore evidence, expert advice and community concerns when making policy and funding decisions.
As demonstrated by the ongoing opposition to the recommendations of the Medicare Benefits Schedule Review, even small, evidence-based changes can be difficult to achieve when they are opposed by powerful interest groups.
The reason for this intransigence is clearly not some fundamental inability of the health system to change.
If 2020 taught us anything, it’s that the health system can respond quickly when needed. After years of inaction on telehealth, a system of online consultations was set up in a matter of months when the COVID-19 pandemic made in person health care risky, and has now been extended till the end of the year, although not made permanent as has been urged by many health organisations, including the Australian Healthcare and Hospitals Association and Australian Medical Association.
However, this experience is not typical, particularly outside of a crisis situation. The most common scenario experienced by reform advocates is an overwhelming inertia and reluctance to change, even when the overwhelming evidence suggests that reforms would have both health and economic benefits.
This is understandably very frustrating, particularly when calls for reform are repeatedly ignored and the system lurches inexorably towards a crisis, as has been the case in aged care and mental health.
Understanding the reasons for governments’ apparent reluctance to embrace evidence-based reforms might not change the outcome for these policy failures. But it may help reduce the frustration experienced by advocates for reform and help in future efforts to avoid similar looming crises in other areas of health.
With this in mind, Croakey asked the following three experts for insights into government decision making and strategies to avoid having good policy ideas left on the shelf:
- Charles Maskell-Knight PSM, a former senior public servant and adviser on a range of issues including hospital funding, private health insurance and aged care
- Shaun Gath, former CEO of PHIAC (the former prudential regulator of the private health insurance industry)
- Dr Lesley Russell, a health policy analyst who has worked as a political adviser in both Australia and the USA.
Political wins trump policy outcomes
The first important issue raised by all three experts is the difference between the priorities of governments and those of health advocates and groups.
While policy outcomes may seem like an obvious shared goal, all three agree that in reality the outcomes of a specific policy or program are generally lower on the list of government priorities than a short-term political win.
Lesley Russell explains: “The reality of political decision making is nothing like how universities teach policy development to their students. Unfortunately, even when there are high quality reports, strategies and action plans supporting a particular policy direction these are rarely if ever consulted by politicians who put together initiatives.”
Shaun Gath puts it bluntly: “The only thing ministers really care about is being re-elected – any proposal that jeopardises this is immediately in trouble.” He cites the 2009 Health and Hospitals Reform Commission Report as one example of a compelling report with a raft of sensible recommendations which died because the political judgement of the government of the day was that they were too hard and would upset too many interest groups. “In the end the political price was deemed not worth paying,” he says.
Russell agrees:
What governments are looking for is inevitably something which doesn’t cost too much and isn’t going to annoy too many interest groups.
They want something that will give them a profile-boosting announcement and get them onside with the groups who matter. The actual outcomes are a much lower priority.”
The other key priority for governments, according to Gath, is money: “It’s always about the money. It’s not just about convincing the health minister. To get a new funding proposal up requires fighting through multiple gates and other departments, including the central agencies of Treasury, Finance and PM&C. The more expensive the proposal is the harder this will be.”
Maskell-Knight agrees: “Most reports would cost a lot of money to implement and governments don’t like that. They usually involve both winners and losers and governments don’t want losers.”
Along with money, political capital is another resource in limited supply.
“Every time a Minister makes a decision they have to make a judgement about whether it’s worth spending their political capital on,” Maskell-Knight says. “If it’s not a going to give them a political win, it’s a much harder decision to make.”
Influence of interest groups
Health is a sector dominated by a small number of powerful interest groups, including the medical profession, the pharmaceutical industry, the device manufacturers and the private health insurance sector. In aged care, the providers of aged care services are the dominant interest group.
It would be difficult to overstate the influence that these groups have over health and aged care policy, exercising what Maskell-Knight terms “policy capture” in multiple inter-related ways.
Sometime their influence can be seen more by what is not happening rather than what is. If there’s an area clearly overdue for reform within the health sector, there is almost always a powerful interest group benefiting from the status quo.
One example of this, identified by Russell, is the failure of governments to act on sugar sweetened beverages (SSBs):
We know that we have a costly obesity problem and we know there is a link between obesity and consumption of SSBs. There is enough data from other countries to demonstrate making SSBs less affordable has a clear public health benefit.
Yet governments refuse to introduce a sugar tax because it annoys too many powerful groups.”
Interest groups exert pressure on governments to maintain the status quo through both direct and indirect mechanisms. The direct influencing of governments by interest groups occurs through the lobbying of politicians and their advisers, and what Maskell-Knight describes as a “revolving door between ministers’ offices and industry groups.”
Other more indirect ways of achieving influence include board appointments in strategic areas, political donations and the use of ex-politicians and advisers as paid lobbyists.
Maskell-Knight identifies aged care as an area in which interest groups are particularly dominant: “People who run the aged care industry sector sit on key committees and are much closer to government than other groups such as consumers.”
These interest groups also have the expertise and resources to dedicate to influencing the outcomes of consultation and policy development processes. They can employ highly skilled and well-connected people to write submissions and undertake other activities related to inquiry and consultation processes, such as building alliances with other stakeholder groups.
They also can influence the public debate on health issues through affecting the way these issues are played out in the media (see below). This can help frame an issue in way that is favourable to the interest group and which shifts the balance of risk for the government away from reform and towards maintaining the status quo.
Weakened role of public service
In theory, the public service should provide the counterbalance to the influence of interest groups by advising the government to implement policies that reflect the community’s interests and concerns.
However, Gath, Maskell-Knight and Russell all commented on a noticeable decline in the influence of the public service over government.
Maskell-Knight has noticed a distinct eroding of the ability of public servants to provide “frank and fearless” independent advice to governments over his 25 years as a health bureaucrat.
“Departments don’t provide same level of advice to Minister now as in the past. They are cowed and not trusted. Public servants are scared of the implications if they provide unwelcome advice.”
Along with the increased politicisation of the bureaucracy, these experts also cited increased staff turnover in the health department and a failure to value ‘in house’ subject matter and technical expertise as factors that have undermined its influence over government.
Another issue raised by both Maskell-Knight and Gath is the lack of industry experience within government departments, making it difficult for the bureaucracy to effectively monitor performance in complex areas, such as private health insurance and aged care.
Without this experience government departments are often not equipped with the knowledge and skills they need to combat the influence of interest groups.
Take the review of prudential arrangements for aged care, says Maskell-Knight.
“This is a critical component of providing quality care and it is a significant task,” he says. “Aged care providers hold more money than building societies. Yet prudential supervision of aged care providers is undertaken by one small section in the Department. This is clearly inadequate to provide the level of transparency and accountability necessary.”
Maskell-Knight also names the increasing reliance on external consultants as an important factor weakening the role of the public service:
These days the government’s first instinct is to get an external consultant to provide advice on tricky policy issues. The numbers of consultants used by the health department has grown dramatically in recent years and while external consultants can play a useful role they can also be problematic.
They have less accountability to government than public servants and because they have an interest in winning future contracts they may be more likely to tell the government what they want to hear. This trend also reduces the internal expertise of the department in the long term.”
Structural barriers to reform
Structural issues were also identified as major barriers to reform, including rigid portfolio boundaries, a short-term accounting approach to budgets and the division of responsibilities for health between federal and state/territory governments.
These barriers obstruct reform in a number of ways, including through undermining the ability of governments to address the drivers of poor health, in particular in areas outside of the health portfolio.
This is particularly relevant for action on the social determinants of health, such as employment, housing and environment, where portfolio budget silos mean that funding for action in these areas cannot be offset against savings in the health sector (and vice versa).
For example, if a new mental health program saves more in law enforcement than it costs, it will still show up in the health budget as a net expense.
An inflexible portfolio-based approach to policy making also makes it more difficult for the health department to have influence over policy and regulatory decisions made in other portfolio areas, even when they have clear impacts on health.
This was evident in the Government’s approach to fuel standards where health experts and the health department were sidelined in a process run by the Department of Industry and dominated by the oil refining sector.
The short-term focus of government budgets, combined with a short political cycle, also makes it difficult to convince governments to factor long term savings into their decision making. This is particularly an issue when advocating for preventive health measures where the benefits of interventions may not show up for years.
Russell also identifies this short-term narrow focus as impeding a broader assessment of policy and program outcomes:
Only the most simplistic outcome measures are used to assess policies and programs, such as the number of services provided. There is no assessment of whether the highest priority people accessed the service or what their outcomes were.”
She cites a “lack of curiosity in political policy circles” for assessing outcomes, even when the information required to do so is available or could be found without undue effort.
“There is no perceived political benefit in finding out the outcomes of many policies and programs and little attempt by governments to get new ideas into the system through consultation with academics and NGOs who might have some expertise in these areas,” she says.
Russell also identifies the Budget process as obstructing broader consultation on policy options:
Many major funding measures are announced as part of the Budget and the Budget development process is generally conducted in secret with little scope for consultation or input from stakeholders.
This means that policies announced are often not practical or not the best solution to the identified issue.”
Lack of consumer advocacy
The lack of a well-resourced independent consumer lobby group was also identified by the three experts as a barrier to combating the power of vested interest groups. While there are excellent consumer advocates and peak bodies, such as Consumers Health Forum, they are not resourced to advocate on the broad range of issues across the health system and their reliance on government funding can constrain their ability to advocate on sensitive issues.
Maskell-Knight describes how this imbalance plays out:
Interest groups generally have a narrow focus and can dedicate all their resources to this. For example, there are three or four aged care provider groups which can focus exclusively on aged care, and each medical craft group can focus on its specific area of medicine.
Peak consumers groups, such as CHF or the Council on the Ageing are expected to cover a much wider range of issues. They are often spread too thin to really make a difference.”
Gath also emphasises the lack of consumer resources and how these create a barrier to reform.
“Interest groups have more time and resources to devote to effective lobbying than consumers. Getting agreement on a policy measures is only one quarter of the journey,” he says.
“There is a lot of fighting that needs to happen to ensure the Minister is prepared to incur the political capital involved in making a decision and to ensure the relevant department supports the measure. Even once this is achieved, there are resource intensive tasks involved in taking the proposal further, such as writing a Cabinet submission.”
He says:
There are a lot of good ideas which die along the way and it can be hard for consumers to enter that space, they immediately get jumped on by interest groups. It can be very challenging for consumers to maintain the Minister’s interests on a specific issue, particularly once the news cycle has moved on and the immediate sense of urgency has abated.”
Gath cites the government’s traditional post-Budget Health portfolio lunch in the Great Hall of Parliament House as an example.
“This is a huge fund-raising event for the party in power with tables sold to interest groups across the sector. Normally there are two major sponsors for this event, often a health fund and a medical technology company. It is a spend-athon where no consumer group has a prayer of being heard, even though, representing ordinary Australians, they should be front and centre.”
Role of the media
All three experts also highlighted the decline of subject matter expertise within the media as a barrier to informed policy debate, making it easier for interest groups to push a self-interested agenda and for governments to resist reform.
The decline in revenue for mainstream media means that there are now few specialist health journalists and those who remain do not have the time or resources to dedicate to detailed analysis of specific policy issues.
This means that the majority of health stories in the mainstream media are written by general journalists with little experience of health policy.
Russell says: “The fact that we no longer have many health experts in the media means that the quality of policy announcements don’t get scrutinised. If there was more scrutiny by the media then governments might pay more attention to policy.”
This is particularly challenging when some of our greatest health threats, such as climate change, and inequality, are complex issues requiring long term action across multiple areas. Trying to get media coverage on these issues is very difficult when dealing with busy journalists without a background in those areas.
Systemic changes needed
There is no simple solution to overcoming entrenched barriers to reform, particularly when they benefit powerful interest groups which therefore work hard to resist change.
Realistically, individual advocates and stakeholder groups acting on their own are unlikely to be able to challenge the dominance of the small number of groups in the health sector.
The best chance of making a difference to the way policy and funding decisions are made might be to work together to support systemic changes such as the following:
- Adopting a more ‘whole of government approach’ to policy making, which would be particularly helpful in areas like aged care and mental health which cannot be addressed solely by the health system (South Australia’s Health in All Policies approach is one example of this).
- Implementing a ‘value-based healthcare’ model which places consumers at the centre of the health system, rather than providers or governments (as outlined in this brief from the AHHA).
- Reforming the system of political donations to reduce the potential for interest groups to use their deep pockets to influence the policy agenda (The Greens currently have a bill before Federal parliament addressing this issue)
- Further restricting politicians and staffers from using their political influence after they leave politics (while there are some restrictions on ex-politicians and staffers acting as lobbyists many experts feel they are inadequate)
- Establishing some independence for health policy and funding decisions (for example similar to the Australian Health Reform Commission suggested by Labor prior to the last federal election).
- Changing the approach to Budgets to include more consultation and transparent reporting processes and moving away from a narrow approach to fiscal management towards broader economic management (as suggested by public sector management expert Ian McAuley).
Despite the current glacial pace of reform, it’s also important to remember that sometimes governments can and do override the interests of powerful groups to make real and lasting difference to our health system.
Russell cites examples including Gough Whitlam (introduction of Medicare), Neal Blewitt (women’s and Indigenous health and HIV/AIDS), Peter Baume (drug policy), Michael Wooldridge (childhood immunisation) and Nicola Roxon (tobacco control).
The fact that the reforms introduced by these leaders are celebrated today as Australia’s health policy success stories demonstrates the long term benefits that result when policy trumps politics and governments resist the influence of powerful vested interest groups.
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