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How to ensure Medicare delivers for changing health needs over the next 40 years? (Part two)

Introduction by Croakey: Health and Aged Care Minister Mark Butler has been talking up the Albanese Government’s commitment to strengthening Medicare. However, many health policy experts believe far more is needed to drive transformative changes and create health systems better able to meet our current and future needs.

Below is a second post compiling responses from our recent survey of health leaders on key reform issues (read the first one here).

Croakey’s Alison Barrett invited approximately 30 people and/or organisations in the health sector to share their views on Medicare and health reform. We received responses from 12 people or organisations, and an additional four advised they were unable to provide comment.

Note, this article has been updated since first published.


Revolutionary change needed

Charles Maskell-Knight, health policy analyst, Croakey Health member and regular columnist of The Zap

Q: What are the key lessons to learn from the history of Medicare, to inform future reform efforts?

A: I think that the evolutionary theory of punctuated equilibrium (Eldredge and Gould, 1972) probably applies to Australian health financing. In other words, there are long periods of stasis followed by rapid development of a new framework, rather than gradual evolution of the system to a new form.

The key features of Medicare are the same as they were in 1984 (and in 1975-76 under Medibank): free public hospital treatment, and benefits payable for services provided by doctors in the community.

As many commentators have observed, a fee-for-service model largely limited to services provided by doctors is not the best way of paying for the ongoing care required to deal with increasingly prevalent chronic diseases.

The government makes regular attempts to trial different models of primary care (Coordinated Care Trials Mk I and II, Health Care Homes), yet never funds these properly or on a large enough scale, or lets them run long enough, to evaluate properly their performance.

I don’t think gradual reform will address the current problems facing Medicare, far less deliver an appropriate 21st century model. Medicare was essentially the second incarnation of Medibank, and that was delivered by a Government buoyed by public dissatisfaction with the status quo and with a readiness to crash through (or crash).

Q: In another 40 years’ time, how do you envisage the health issues facing Australians?

A: I think that the research effort directed to addressing cancer will mean that most cancers are containable, if not curable, by 2065.

I imagine that the same research effort directed towards obesity and diabetes means that these will have been brought under control one way or another.

An extended lifespan (because people aren’t dying of cancer or congestive heart failure) means that more and more people will live long enough to be affected by dementia and other diseases of old age.

The known unknowns are the extent of health problems due to an overheated planet, and the effects of future pandemic diseases.

Q: In another 40 years’ time, what is on your wish list for Medicare and our health system?

A: I would like to think that primary care would be delivered through one-stop shop clinics that offered on-site access to pathology and diagnostic imaging as well as medical services – a sort of Urgent Care Clinic. They would be staffed with a mixture of GPs and practice nurses. But they would also provide physiotherapists, psychologists and pharmacists, dieticians and dentists, and most other allied health services. They would coordinate antenatal care, and provide mother and baby clinics.

They would be funded by a mix of risk-adjusted capitation payments and some fee-for-service payments.

These clinics would also work closely with hospitals in the provision of post discharge services, and with nursing homes to provide higher level clinical care to residents. They would also provide consulting rooms for specialists, who would be paid by the government with no possibility of out-of-pocket costs.

The hospital system would continue to provide acute care, and diversify to providing subacute rehabilitation services – either on-site or in the community – rather than discharging older people still requiring care to aged care.


Principles matter

Kylie Woolcock, Chief Executive of Australian Healthcare and Hospitals Association

Q: What are the key lessons to learn from the history of Medicare, to inform future reform efforts?

A: It is important we remember the motivations of the people who co-authored the original proposals for a universal health insurance scheme.

Professor John Deeble, the namesake of AHHA’s Deeble Institute for Health Policy Research, is often dubbed ‘the father of Medicare’. He co-authored the original proposals for universal health insurance with Dr Dick Scotton, and these proposals subsequently led to Medicare. He was driven by experiences in a previous role at the Peter MacCallum Institute, where he was troubled seeing people refused cancer treatments because they could not afford them. He was also a man recognised personally as treating everyone the same, with dignity and respect.

To ensure all Australians, including our most vulnerable populations, have access to the care they deserve, maintaining John Deeble’s legacy will be more critical than ever before. The principles on which Medicare was founded must be held onto closely in informing future reform efforts – equity, efficiency, simplicity and universality.

Q: In another 40 years’ time, how do you envisage the health issues facing Australians?

A: The aging population and increased prevalence of chronic, complex and mental health conditions are well recognised globally.

Disasters and public health emergencies are also becoming increasingly frequent, harsher, and more impactful every year due to climate change. These present both short- and long-term mental and physical health challenges. As the incidence and severity of emergencies and disasters increase, so too will these health challenges.

As new technologies emerge, Australians will expect more and more from the health system. Not just in terms of access to new devices and medicines, for example, but as we see greater access to data and information, there will be increasing need for governments and health services to support them in being more informed and involved in their care.

All of these will continue to place increasing demand on our health services and resources. And equity must continue to remain a priority. Not just in the health system, but in how the social determinants of health, such as housing, income and employment, and their impact on health and wellbeing, are factored into all policy decision-making.

Addressing inefficiencies in the administration of equity across all sectors of government will require meeting communities where they are, and allocating resources and opportunities as needed. In health, alignment of primary care providers with the clinically determined needs, individual preferences, values, and context of their patients will be required to address the emerging complexities and expectations of Australia’s health in the decades to come.

Q: In another 40 years’ time, what is on your wish list for Medicare and our health system?

A: Australia is a vast country made up of diverse communities who all have unique experiences and environments that impact their health and wellbeing. Further, the health and care workforce make up a large proportion of these communities – the people receiving and the people delivering care are inextricably linked with the health and wellbeing of the community as a whole.

Understanding and responding to local context is important in how we design and deliver healthcare. Sometimes in our drive for efficiency, we lose sight of the health outcomes we are trying to achieve, the people who are striving for better health, and the flexibility that might be needed to achieve that locally. Communities need to be supported to understand how healthcare can be provided very differently to meet their needs. To do this well, we need to connect the data and the resources for health services and stewards to lead, interact and engage from a place-based perspective.

Our health system must shift away from volume-driven healthcare approaches to value-based approaches which promote outcomes that matter to people and communities. The Oxford Centre for Evidence Based Medicine recognises value ‘as a relationship between resources, outcomes and context.’ To embed value, we must focus on all aspects of this relationship.

So on my wish list is a system that establishes the governance, data and performance information, workforce and funding models that will bring transparency and alignment to the relationship between resources, outcomes and context. This will support the health system to drive better health for all Australians as Medicare originally intended  – equitably, efficiently, simply and with universality.


Finite health budgets

Dr Margaret Faux, Founder and CEO Synapse Medical

Q: What are the key lessons to learn from the history of Medicare, to inform future reform efforts?

A: I am currently leading a team who are just completing the development of the non-admitted casemix classification for the Kingdom of Saudi Arabia. In one of my first meetings with the Ministry team I asked them: “What’s your payment model going to be? Fee-for-service, capitation, salary, performance-based funding, or a mix of these?”

A chorus erupted “Not fee-for-service!” To which I replied that I felt we were off to a good start. In the work I am doing in Saudi and other jurisdictions I am seeing a clear shift away from fee-for-service as well as a move to put payment integrity frameworks in place, irrespective of the payment model.

Other countries are recognising that health budgets are finite, and no country can achieve sustainable universal health coverage without payment integrity. Accepting this truth will be critical to Australia’s success into the future.

Q: In another 40 years’ time, how do you envisage the health issues facing Australians?

A: Well, having just returned from the Arab Health week in Dubai, I think the health issues discussed there were universal. An increasing incidence of diabetes, cardiovascular disease, obesity, cancer, all the diseases we all know about.

The ‘hot topics’ to address these challenges were a shift to community-based care, a shift away from ‘sick care’ to health and wellness, health span versus lifespan, generative AI and digital enablement.

Q: In another 40 years’ time, what is on your wish list for Medicare and our health system?

A: If I’m still here in 40 years my desire and motivation will be the same. To see a well-functioning truly universal health coverage system in which all Australians can access and afford the highest level of healthcare, irrespective of their ability to pay.

We are a long way off achieving that but must never give up this aspiration.


Modernisation necessary

Professor Anthony Scott, Health Economics at Monash Business School

Scott will be presenting at the Melbourne Institute’s Medicare at 40 event on Monday 19 February.

In a statement, he said:

“Out-of-pocket costs for GP and non-GP specialist care continue to grow faster than inflation, GP bulk billing rates are falling, and there’s no evidence of health outcomes improving.

The percentage of people who are always bulk billed fell from 65.8 per cent in 2021-22, to 51.7 per cent in 2022-23.

Only 60 percent of healthcare provided is effective, 30 percent is wasteful and of low effectiveness, and 10 per cent is harmful to patients.

The future of Medicare needs to involve supporting the provision of high-value healthcare (and defunding low-value healthcare) through the serious introduction of value-based payment models, systematic investment in research, rethinking aspects of medical education, and the measurement of health outcomes and patient experience.

The past 40 years have embedded Medicare as a valued public institution. Modernisation is necessary for Australians to continue to thrive in the next 40 years.”

Read more of Professor Scott’s commentary here.


Adapt to local circumstances

CRANAplus CEO, Linda Kensington

Q: What are the key lessons to learn from the history of Medicare, to inform future reform efforts?

A: Medicare has shown us that it is possible to design, build and implement a comprehensive strategy to fundamentally change how Australians experience the healthcare system. However, it has also shown us that for an ambitious federal health insurance scheme to achieve its purpose of improving access, it must adapt to unique circumstances (such as those faced in remote Australia) and learn from the lived experience of consumers and health professionals.

Q: In another 40 years’ time, how do you envisage the health issues facing Australians?

A: The Government and Australian healthcare system have increasingly awakened to the need to address the drivers of poor health, not just the symptoms. How effectively we can act on this realisation will define the next 40 years.

If the schedule can expand beyond a fee-for-service model to encompass preventative health, support the contribution of all health professionals, and allow for the impact of geography on workforce, we could see improvements to chronic disease and mental health and close the gap in life experience and expectancy faced by Aboriginal and Torres Strait Islander peoples.

Q: In another 40 years’ time, what is on your wish list for Medicare and our health system?

A: We are hopeful that Medicare can evolve to support health improvement and illness prevention for all Australians. Exemptions for remote state and territory health services and impending changes to the need for collaborative arrangements are steps in the right direction, but we have further to go.

To achieve its aim of improving healthcare access, Medicare must empower all health professionals. We have to challenge the assumption that a doctor is always available in remote areas, and empower nurses, nurse practitioners and midwives to claim for selected services within their scope of practice. This will alleviate the financial pressure on clients and health services and enable these professionals to apply their full range of skills. It will also free up doctors to perform at their full scope. This is vitally important in remote areas, where staff and resources are precious.


Focus on equity

National Rural Health Alliance

Q: What are the key lessons to learn from the history of Medicare, to inform future reform efforts?

Primary healthcare works. Having access to primary healthcare at little or no cost to patients keeps them healthier and well and as much as possible out of the more expensive hospital system.

Medicare has encouraged as much as possible that having an established relationship with a primary healthcare provider such as a GP is positive and supports continuity of care.

The system might have the best intentions but there will always be issues that need policy changes that address shortcomings in the system. For example:

  • GPs are highly regulated and their billing is monitored quite strictly. Other (non GP) specialists have much more freedom to charge high out of pocket fees and there is little that the current system is doing to fix it.
  • Corporatisation of the general practice sector as well as other factors have meant that many GPs spend less time with patients and rely on high levels of patient throughput as a model for sustaining their business.
  • Also, the Medicare system relies on having providers available to deliver the services. There is inequity in the system where people in rural and remote Australia do not have access to the same level of healthcare supported by Medicare as their city counterparts. Care is out of reach for many given the tyranny of distance and limited healthcare workforce in rural, regional and remote areas.

The system needs to further support multidisciplinary team working.

Q: In another 40 years’ time, how do you envisage the health issues facing Australians?

We can already envisage critical health issues facing Australians within the next 40 years. For example:

  • People continuing to live longer with more chronic disease.
  • People may live longer because one