Medicare Locals under review: what Croakey contributors (and others) want to see, and what they fear

The future of Australia’s fledgling Medicare Locals – set up to integrate the fragmented primary health care sector – is officially under review.

Many of those with a stake in that future rushed to lodge submissions by the December 23 deadline, following the long-awaited mid-December announcement on the review by Health Minister Peter Dutton which asked for comments on:

• the role of Medicare Locals and their performance against stated objectives
• the performance of Medicare Locals in administering existing programs, including after-hours GP services
• recognising general practice as the cornerstone of primary care in the Medicare Locals functions and governance structures
• ensuring Commonwealth funding supports clinical services, rather than administration
• processes for ensuring that existing clinical services are not disrupted or discouraged by Medicare Local programs
• interaction between Medicare Locals and Local Hospital Networks and other health services, including boundaries
• tendering and contracting arrangements
• other related matters.

Audits are expected to be undertaken in the coming weeks as part of the review, which is headed by former Commonwealth Medical Officer Professor John Horvath and scheduled to report in March. It is expected to also take into account work done already by another high level review commissioned by the former Labor Government.

At the very least, the review is expected to recommend a name change (which most would understand or welcome, to stop the confusion that saw one phone answering message saying: “Don’t come to us for your Medicare money, ring XXXX”!) and geographic boundary changes to bring them better into line with local health districts.

But there are fears – for those who see the vital need to integrate primary health services at the local level – that they will be significantly scaled back or scrapped, as this preview story noted ahead of the review announcement. Now less than two years old, Medicare Locals won an apparent reprieve from then Opposition Leader Tony Abbott during the election campaign, but there have been no guarantees since.

Public health advocates were disappointed (see tweets below) with the Australian Medical Association‘s submission to the review which, while acknowledging the need for integrated primary health care, hit out at the design and implementation of the Medicare Locals and said the current model “has not delivered”. Calling for a comprehensive overhaul, it said:

“There has been a deliberate effort to downplay the role of GPs and many MLs have failed to communicate effectively with general practice, or engage with them in a meaningful way. The performance of MLs against their objectives has been patchy and there appears to be little evidence of improvements on the former divisions of general practice structure that they have replaced – despite significant additional funding”.

Other concerns have been expressed at the other end of the service spectrum. In its submission to the review, the Council of Social Service of New South Wales (NCOSS) welcomes the “valuable role” of Medicare Locals in primary health care, but raises concerns about direct service provision that “competes” with existing providers and of “a potential conflict of interest” if Medicare Locals are both service funders and service providers.

The peak body of the state’s community sector also calls for greater clarification of the role of Medicare Locals in the broader community and social care system. “Some community sector organisations report Medicare Locals do not appear interested in working with non-clinical health services, despite their importance in supporting people to live well in the community,” it says.

Professor Stephen Leeder, Editor-in-Chief of the Medical Journal of Australia, says (in more detail below) that it would have been a miracle if every Medicare Local had worked well. That not all have done so “is no argument for their abolition”, he said.

“Many Medicare Locals have not had the time and or the nurture needed to take firm root. Grumpy, conservative hospital networks – and there are some – with whom Medicare Locals are expected to work, are stony ground. The fault, dear Brutus, is not always in the Medicare Locals,” he said, warning particularly against rolling them into local hospital networks.

In its submission, the Australian Medicare Local Alliance says the nationally coordinated and locally driven Medicare Locals have made a positive difference over a short period of time. “Not only are they keeping people well and out of hospital, they have demonstrated their potential to realise even greater outcomes through driving further change in the health care system.”

For more background, see these earlier articles explaining the role of Medicare Locals, outlining examples of their work, and this Q&A marking their first anniversary.

Below, Croakey contributors outline their hopes for the review and make some concrete suggestions for advancing primary health care reform. Here are some samples:

“Primary care is just one part of the whole public health care system – it is a ‘systems’ and not just an individualist model of care. The intersectoral partnerships that Medicare Locals are facilitating have been missing from local systems to date and are critical for tackling wicked problems in local catchments.” Dr Helen Keleher

“Whilst we are lucky to have a mostly highly skilled and committed public health care workforce that we all value, it would be a sad day if (the focus of the review) means that Medicare Locals will be forced back into a minor role, effectively placing the needs of providers not the community first.” Tony McBride

“No new government wants to continue to implement a significant policy which it did not author and does not own unless it is one which always had its wholehearted support. Thus, the Federal Government wants either to get rid of Medicare Locals or change them to something they own….. The advantage the Government has, however, is that it is very early days in the evolution of these complex organisations and there are as yet, few tangible results to point to for to argue for continued support. “ Dr Tim Woodruff

“Peter Dutton is not just threatening to cut ‘bureaucrats’ from the system. By doing so, he is threatening to take us back to a world of health service silos which can no longer function efficiently or effectively in treating an ageing and increasingly chronically diseased population.” Lewis Kaplan

Rumours prior to the recent federal election included one that a Coalition government would demolish Medicare Locals. That rhetoric settled but questions persist. Like the National Preventative Health Agency, also under threat, these new structures from the past five years of change in the health system took lots of energy to establish but will require no muscle to break up – porcelain vases all.

It would be miraculous if every Medicare Local had worked well, and as miracles are scarce, they have not. But this is no argument for their abolition. Variation is a feasible management challenge here as it is in clinical practice. Many Medicare Locals have not had the time and or the nurture needed to take firm root. Grumpy, conservative hospital networks – and there are some – with whom Medicare Locals are expected to work, are stony ground. The fault, dear Brutus, is not always in the Medicare Locals.

Suggestions that Medicare Locals could be rolled into local hospital networks are in serious error. A long history of antipathy exists between public hospitals and general practitioners. Independent Medicare Locals guarantee space between the practitioners and the hospitals in which trust can be developed around shared programs of care. Amalgamate the entities and my guess, based on long observation, is that the general practitioners would pick up bat and ball and leave. Coordinated care will require gentle diplomatic handling, patience and goodwill to develop trust.

A world tour of health services in affluent societies would find all of them bothered by one thing above all others – how to link hospital and community care more effectively. This is not a fad: it arises from the reality that increasing numbers of older people and people with multiple serious and continuing illnesses require joined-up care that moves from hospital to community and back as easily as crossing a leafy lane.

Well, then, how to make this work? Recently I attended a conference in London run by McKinsey and Co. Three strategies emerged that could be applied with benefit to accelerate our progress in achieving integrated care:

• Pick the low-hanging fruit – scale up successes
• Change the way health care provision is financed
• Provide incentives for new, more effective and efficient care.

In the case of Medicare Locals and the first point, a review should identify the elements of success among those that have worked well. These elements should then be supported Australia-wide – with financial incentives and sanctions to make them happen.

Second, the fee-for-service model of reimbursement that we have at present is unsuited to long-term, joined up care. The split between Commonwealth and states, private and public, stands in the way to success. This will be hard to negotiate but not impossible.

Third, and linked to this, is the need to build into our health care system of the future a way (as has been done in parts of the US and UK) to support innovation and reward greater effectiveness and efficiency. The reward should come to the service and to the provider. In essence, more effective and efficient care should receive bigger rewards.

These principles are emerging from around the world. We would do well to think seriously about them before calling for the bulldozers to demolish Medicare Locals.

Dr Tim Woodruff, Doctors Reform Society

The political context

No new government wants to continue to implement a significant policy which it did not author and does not own unless it is one which always had its wholehearted support. Thus, the Federal Government wants either to get rid of Medicare Locals or change them to something they own. There is a problem with getting rid of them because there is widespread support that the concept of a more widely professionally based organisation with the responsibility for a local population and providing access to an extended range of services is a very good one.

The advantage the Government has, however, is that it is very early days in the evolution of these complex organisations and there are as yet, few tangible results to point to for to argue for continued support.

The long term agenda of the Government in relation to health care is to have a user pays system of financing health care except for a safety net for the most disadvantaged. Medicare Locals have neither a clear mandate nor the resources to address the problems with health care financing. The best they can do at the moment is to identify areas of poor quality and inequitable care and co-ordinate changes to address such issues. Thus as currently developed, they are not an immediate threat to the long term agenda of the Government, although as their potential to advocate for their communities develops they may become politically awkward. The approach is therefore likely to be either to control their development or to gently push them back to being more like Divisions of General Practice.

Constructive outcomes

Medicare Locals vary considerably in their development stage and in their quality. This partly reflects the historical setting, coming as they do from Divisions of General Practice which themselves varied hugely in terms of quality. In addition the setting for each Medicare Local varies considerably. Some are working in an environment where there already existed considerable dialogue between many of the parties who need to work together to deliver more co-ordinated and equitable care (especially in Victoria where State funded Primary Care Partnerships had existed for some years).

In other areas this type of co-operation and dialogue existed only on a piecemeal or individual basis.

To progress Medicare Locals (under whatever new name they will be granted), changes in governance arrangements are clearly required to overcome some of the disasters which have occurred. More importantly, what is needed is time and a gradual increase in resources along with constant analysis of progress and barriers to appropriate development of these complex organisations. Expecting easy to measure benefits to patients is not appropriate in the early stages of such complex development. But measuring benefits is crucial in the long term and must start early so that problems can be addressed.

Tony McBride, Chair of the Australian Health Care Reform Alliance

Whilst the Federal Government is reading all the submissions to its current Review of Medicare Locals, it is interesting to reflect on what we can expect from the report when completed, in March or so. Two documents give a reasonable indication of its flavour.

First the Coalition’s election Health Policy outlines just nine initiatives, three of which relate to primary health care and all three are workforce focused. Whilst these are welcome, the policy neither mentions nor addresses some of the other key issues facing consumers needing to use primary health care services. These of course include inequitable access and affordability across Australia and a highly fragmented and uncoordinated/unplanned primary health care ‘system’. Whilst a larger workforce will potentially assist in increasing access, it will only do so if there are much more assertive measures taken to address the chronic maldistribution of primary health care workforce and services, especially in more disadvantaged or rural /remote areas (where a mountain of evidence also shows us there are greater rates of illness). The proposed surcharge on bulk-billing recently mooted of course will only make access worse for these areas whilst making no impact on wealthier areas.

The Review of Medicare Locals therefore sits within this context. The terms of reference include some standard criteria about performance against stated objectives etc. Whilst the 61 Medicare Locals’ stated objectives invariably mention the community and consumers directly, none of the extra criteria for this review mention them at all. Does this mean it is assumed their needs will be foremost in the minds of the review team? Perhaps but I suspect not.

Other criteria appear indicative of the emphasis of the review, such as “ensuring Commonwealth funding supports clinical services, not administration” and, second, “assessing processes for determining market failure and service intervention, so existing services are not disrupted or discouraged”.

These could have multiple meanings but the key message appears to be that actions aimed at change (that is, at improving the system for consumers, at addressing some of the structural problems noted above) are not the highest priority. In using negative language in its criteria, rather than that of positive change for the community’s benefit, the implication seems to be that the status quo is the highest priority. Surely no major company would set out to radically improve its systems using key criteria loaded with such language?

Secondly no quality and effective health systems worldwide are solely market-based. The term ‘market failure’ therefore only applies to a sub-set of the current health system. Lack of system planning (so services are provided where people live, in a way they can afford, are appropriate to their needs and are coordinated) is a much larger overall problem. The focus on the term ‘market failure’ and no other to describe the inequities, gaps and lack of coordination in our current system is a highly limited lens to use.

In this context, the other criteria seem to imply that Medicare Locals either ‘support clinical services’ or undertake ‘administration’. This implies a strange simplification of the roles of Medicare Locals. Is planning for a better system ‘administration’? Is working with existing providers to fill gaps ‘administration’? Is only providing clinical services seen as legitimate (when this was not Medicare Locals’ primary role although many seem to have taken it on, not without some local criticism)? I sincerely hope not. Of course, if it means assessing whether Medicare Locals are efficient in their staffing, especially in management and corporate services, we would all support that. However criticism of Medicare Locals by the Coalition in 2012-13 ranged much broader than this simple version of efficiency. Whilst we are lucky to have a mostly highly skilled and committed public health care workforce that we all value, it would be a sad day if all of the above means that Medicare Locals will be forced back into a minor role, effectively placing the needs of providers not the community first.

Alison Verhoeven, Chief Executive, Australian Healthcare and Hospitals Association (AHHA)

The effective and efficient provision and coordination of primary health care services is a critical component of a comprehensive health system which can significantly improve health outcomes and reduce overall health care costs and out-of-pocket expenses.

This requires a formal coordination and development structure for primary care and Medicare Locals have provided a good starting point for this. In line with this view, the AHHA supports the objectives under which Medicare Locals were established, and notes that there are solid examples where Medicare Locals have demonstrated good practice in meeting these objectives.

The key outcomes of the Medicare Local review should include:

• continued focus on improving coordination of care and a multidisciplinary approach to effective primary care
• simplification of funding arrangements and reduction of the administrative and reporting burdens
• enhanced engagement with Local Hospital Networks
• recognition of the need for flexibility in structure to support local solutions for local issues.

See the AHHA’s submission to the Medicare Local review.

Vern Hughes, the National Campaign for Consumer-Centred Health Care.

Medicare Locals were an ill-conceived attempt to integrate a notoriously fragmented health system, but they were the products of provider-centred, bureaucracy-driven thinking. They are a failed attempt at reform, and should be discontinued. Health consumers are just as irrelevant to Medicare Locals as they are to any other component of our provider-centred health system.

Consumer-centred reform of the health system cannot be generated by the failed “service coordination” model. This strategy simply builds additional layers of service coordination meetings in and between provider-based silos in the system. The power and capacity of these silos should be broken down, not enhanced with greater representation and resources.

The old Divisions of General Practice should have been decommissioned in the 1990s and replaced with Divisions of Consumers, as hubs to drive consumer-centred innovation, directed by health consumers. That didn’t happen. The Medicare Locals simply continued the marginalisation of consumers from primary health care reform, and channelled resources into provider-centred networks.

The Abbott Government needs to stop repeating failed Labor strategies in health care, and start on the journey towards a consumer-centred health system. The Medicare Local structures can be converted into local mechanisms for consumer-centred innovation, but their boards will have to be cleaned out and the various provider interests removed (including the AMA, the public health advocacy networks, and the old public sector service coordination networks).

In their place, we need entrepreneurial players who have no established vested interests in the health system, and the new generation of consumer innovators in chronic care, mental health self-direction, and community-based aged care. Stripping the industry interests out of the Medicare Locals and allow them to become vehicles for consumer-directed innovation is the way forward.

Will the Abbott Government bite this bullet? No, they have no more comprehension of this agenda than Labor. Advocates of consumer-driven innovation in health care are ignored by both Labor and Liberal parties and their respective think tanks, so we as consumers need to find ways to drive this agenda ourselves.

Dr Helen Keleher, Frankston-Mornington Peninsula Medicare Local and Adjunct Professor, Monash University.

The terms of reference for the review are focused on general practice/primary care. They fail to acknowledge that primary health care is much more than general practice. Allied health providers, pharmacists and non-govt organisations are all essential partners in primary health care. General practice cannot deliver on health outcomes without the services provided by those professional groups so to ignore them in the review is to miss the point about what is needed to “keep people well and out of hospital”.

What might be constructive outcomes from the review? The name change is inevitable and would certainly help to avoid confusion in the general public about ‘Medicare’ and ‘Medicare Locals’.

What would be positive outcomes for primary health care? For Medicare Locals to achieve the high-level objectives set by the Department of Health, an intersectoral approach to partnerships is critical. Medicare Locals are system enablers for partnerships and Alliances to ensure that the whole system works better, to address the gaps in local healthcare, the connections between providers (such as secure messaging and e-health), and working to redistribute services where they are needed most. Primary care is just one part of the whole public health care system – it is a ‘systems’ and not just an individualist model of care. The intersectoral partnerships that Medicare Locals are facilitating have been missing from local systems to date and are critical for tackling wicked problems in local catchments.

Another positive outcome that could be achieved is that population health is not diminished in any way in the funding model or any new guidelines that come out of the review. Population health is a new discipline being pioneered by Medicare Locals – it is the first ‘sector’ that has systematically incorporated population health work into its core business. It is essential that the work of population health continues to gather and synthesise evidence about local populations and is able to tell the stories of underserved populations, social and health inequalities and the social determinants of health, service gaps, and that service redevelopment work is underpinned by this evidence.

Some thoughts on how to cut healthcare costs and reduce inequalities:

• use population health evidence and commissioning/procurement to redistribute services
• broaden the scope of practice nursing to reduce the use of GPs for low level work (removal of sutures, dressings, immunisations/vaccinations etc). Many practices are doing this already but there is much more scope.
• strengthen the referral practices of general practice to early childhood services provided by allied health. GPs usually only refer to paediatricians when a child should be also referred to speech/OT/ psychology for early intervention services.

Lewis Kaplan, General Practice NSW

Exactly a year ago, the Sydney Morning Herald published my opinion piece “Prevention is always better than the cure” in which I raised the issue of the new Commonwealth funded Medicare Locals and how they should integrate with the NSW Ministry of Health and its Local Health Districts. Twelve months on, the issue is getting pointy as Health Minister Peter Dutton has now launched his promised review of Medicare Locals. The review is a step back from his earlier promise to abolish Medicare Locals which he characterised as “useless additional layers of bureaucracy”. However the review’s terms of reference still include “ensuring Commonwealth funding supports clinical services, rather than administration”.

In last year’s piece I focused on the need for integration of health care to avoid preventable hospitalisations. Integration doesn’t happen by Ministerial decree and the need for it has not diminished. It happens because different parts of the health system commit to working together, create collective visions, integrate service paradigms, create secure messaging for sharing patient data, and in various ways create and maintain productive, patient-centred relationships and systems.

Typically it is not only busy doctors or clinical nurses who do this integration work. It is also care coordinators and system managers, supported by policy staff (often with input from non-government organisations which might be receiving government grants).

These people are by definition ‘bureaucrats’ because they are not ‘front-line staff’. And they exist in part because front-line staff are often too busy delivering clinical care …. all the while wishing that ‘someone’ would coordinate things better so they could know, for example, if a patient had already had a series of tests and give them access to the results, or could they please get an accurate and up to date list of medications, or discover if the patient were being treated by which different health professionals and what this might mean for the presenting symptom this particular clinician was addressing.

Peter Dutton is not just threatening to cut ‘bureaucrats’ from the system. By doing so, he is threatening to take us back to a world of health service silos which can no longer function efficiently or effectively in treating an ageing and increasingly chronically diseased population. He may well provide short-term budget savings, but the medium to longer term impact of cutting back on the work of Medicare Locals and of the general (and internationally accepted) move towards coordination and service integration will be a huge extra burden to the health system and therefore to us all, either in reduced service or increased costs or both.

Tim Senior, Sydney GP

My initial thoughts on the terms of the review are that “other related matters” make it nice and broad. I would agree with the statement about “making General Practice the cornerstone of primary care” (but then I would say that!) but it is a statement that contains quite a lot of politics, and will rankle with many stakeholders. It could also be taken to mean that the review is looking at moving back towards its Divisional roots, which were very much based around GPs, and I think that would be a retrograde step.

“Processes for ensuring that existing clinical services are not disrupted or discouraged by Medicare Local programs” is interesting – especially if Superclinics aren’t being evaluated, as this was one of the main criticisms. What if they wanted to improve or co-ordinate services? Does this put a not-interfering role ahead of actually ensuring services are actually effective or meeting community needs?

It’s interesting that there is no mention of Aboriginal and Torres Strait Islander health, as this was one of their main programs (though no mention of other specific programs such as e-health, chronic disease or immunisation).

John Dwyer, Founder of the Australian Health Care Reform Alliance & Emeritus Professor at University of New South Wales

The review of the Medicare Locals is timely, as 70 per cent of community physicians feel the good intentions associated with their creation – with an emphasis on helping GPs provide the range of services patients may need – are not being met.

Recommendations:

1. Medicare Locals should be redesigned in terms of form and function.
2. They should be renamed “Primary Healthcare Organisations (“PHOs”).
3. Their geographic boundaries should be aligned with the geographic boundaries of the Local Health District in the area they will serve.
4. PHOs should have Boards comprised of health professionals and other relevant professionals as well as community members.
5. The Board of the LHD should have a member of the PHO Board on its Board committee as a voting member.
6. The Board of the PHO should include a member of the LHD Board who would be a voting member.
7. PHOs serving large geographical areas should have “satellite” branches to better serve sub-districts.
8. PHOs should be established as companies limited by guarantee.
9. PHOs would provide a “hub and spoke” model of services to affiliated individual practices.
10. PHOs would explore the possibility of offering “secondary” health services and even running “23 hour Wards” where that would be desirable (see below).
11. PHOs would be able to employ professional and clerical staff and use Medicare and specific government funding of the PHO to offer GPs the ability to move from exclusive “fee for service” arrangements.

In the model proposed here and on show in many countries, a PHO acts as the hub for all primary care activities in a region. It is also the focal point for the integration of hospital and community care and, ideally, would offer excellent primary care services that could include secondary services that could relieve local hospitals of many of the “GP” presentations to their emergency departments.

Our PHOs would offer current GP practices in their area of influence the opportunity for “affiliation”. Affiliation would be voluntary and affiliated practices would remain clinically autonomous. However a range of centralised services would be offered to affiliated practices. Before describing a number of these it is worth emphasising that: –

1. Far better documentation of the health outcomes for the patients GPs treat will be necessary in the future (and rightly so). Many GPs are troubled by the extra time that will be required and doubt they have the expertise or infrastructure to respond adequately.
2. It is to be hoped that in the near future many small practices will amalgamate. Ideally larger practices featuring a “team” approach to care will consist of doctors, nutritionists, general and specialist nurses, allied health and dental professionals all funded by Medicare, PHOs could offer such patient focussed integrated care from a centralised clinic till more localised IPC is available.
3. There are a number of models that would allow affiliated practices to be more involved within the PHO Company including being part of the company itself. It is crucially important if we are to attract a new generation of young doctors and other health professionals to primary care that we offer opportunities for them to have equity in the business they will foster as well as earning remuneration from their delivery of care.