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Medicare Select: the best option for consumers

And the debate about Medicare Select continues…

Vern Hughes, the Secretary of the National Federation of Parents Families and Carers, has joined the discussion which has been going on here, here, here, and here at Croakey and also at Inside Story.

He writes:

“The National Federation of Parents, Families and Carers was one of just two organisations out of 319 which supported the model of competing health plans recommended by the National Health and Hospitals Reform Commission (NHHRC) in its landmark Final Report in June.

The other was Medibank Private.

Defying political orthodoxy, the Federation advocated a system of competing health plans, now badged as Medicare Select, as the only option compatible with a consumer empowerment agenda and consumer-centred transformation of the health system. As we said in our submission,

The Commission should to be bold in advocating Option C
as the only practical framework for health reform that is
based on consumer choice, allowing consumers to choose
a health plan of their preference. Options A and B are
bureaucracy-centred, provider-driven frameworks.

We think a system of competing health plans which enrol populations of consumers, hold and aggregate funds on their behalf, appoint and fund personalised care coordinators for consumers, and assemble packages of integrated care, is better than a model of regional health organisations which ‘capture’ consumers by locality without the accountability than comes from consumers having the power to exit one organisation and take our money and purchasing leverage to someone else.

Why did we adopt this position?

The Federation was formed in 2007 by families/carers of people with disabilities, mental illnesses, aged frailty, and chronic illnesses, usually with two or more of these conditions simultaneously. The families share a common experience of terrible fragmentation and discontinuities of care in their various situations, and are people who have been very active in trying to change these situations. Because of this, they understand, more than most families, what an agenda of coordinated care and consumer choice is about. Many of them exercise consumer choice and self-management of support packages in disability, accident compensation, and increasingly in aged care.

As a pool of families/consumers who understand the agenda of coordinated care, our attention has inevitably turned to general health reform, and a desire to be able to ‘cash out’ various health care payments and entitlements into services that support our loved ones in a pre-emptive, preventative fashion and without the usual service and disciplinary fragmentation. Hence the Federation’s interest in the idea of a health plan that aggregates funds from various sources, and assembles these funds in individual packages of care.

Our view is that practical innovation in consumer empowerment is necessary to get the health reform debate out of the stagnant left-right dichotomy that has paralysed it for decades. The left opposes private sector interests in health and advocates public sector managerialism as an antidote. The right opposes public sector managerialism and advocates private sector managerialism, with heavy state subsidies, in return. The big losers here are consumers. Neither side begins with consumers or a commitment to a consumer-centred health system.

The Federation welcomes the current debate about Medicare Select because at long last the consumer has a chance to become the central player in health reform. We are inviting individuals and organisations to participate in the CIMID Health Plan project, which will be developed as a demonstration project over the next two years to educate governments, health organisations and consumers in what a Health Plan actually is and how it might work.

The CIMID Health Plan will be a voluntary opt-in health plan for people with chronic illness, mental illness and disability (CIMID Chronic Illness, Mental Illness, and Disability). Individuals with these conditions, and their families/carers, will enrol with the Plan, and the Plan will negotiate with the Commonwealth (as a number of indigenous health organisations currently do) for risk-rated capitation-based allocation of funds (from MBS, PBS, hospital funding, specialist disability, mental health and aged care funding streams, HACC, et al). With these funds, the Plan will put together packages of integrated care for its enrolled members, with a strong emphasis on coordinated care and preventative strategies.

Our aim to have the CIMID Health Plan enrolling consumers from the beginning of 2010, and commencing discussions with the Commonwealth in the new year.

Interestingly, Australia actually has a history of competing health plans, which predated the twentieth century’s infatuation with public sector managerialism and supply-side service provision.

Friendly societies in the nineteenth century were competing health plans. Australians in towns and suburbs across the country joined a society of their choice, with a local focus through a lodge, which contracted with GPs, hospitals and pharmacists for capitation-based services. GPs contracted to a lodge provided unlimited treatment for a member, on call, irrespective of how well or ill they were.

From 1900 to 1950, the left and right fought a long battle against the friendly societies’ place in the health system. The left wanted a state-run system, and the right wanted a practitioner-driven system. The friendly societies were caught in a pincer movement, and were gradually killed off. Chifley’s National Health scheme sounded the death knell. After that the friendly societies were reduced to their current ignominious status as insurers and finance houses.

Rediscovering this history is an important part in contemporary health reform, because without a knowledge of this past, we cannot imagine that ordinary citizens can actually form own health plans. We have been so ingrained with the ethos of managerialism through the last century that we think self-help and mutual aid cannot create the institutions that might best serve our needs. But what’s even more significant is that self-help in health maintenance and chronic illness management is now recognised as the key to good health care practice – even only we had systemic arrangements that supported and reinforced self-care.

We think the Commonwealth should be explicit in seeking to encourage and enable aggregates of health consumers, based on cultural or philosophical or religious preferences, to form their own health plans within a competitive framework. This would mean, for instance, an indigenous communities-based health plan, a Catholic-based health plan, a New Age complementary medicine-based health plan, a sports health plan, and so on, to provide genuine consumer-based competition with genuinely different ‘products’ to choose from.

Existing private health insurers, who offer identical products at identical prices to a public that is justifiably not interested in their products, would have to reinvent themselves dramatically to compete with genuinely community-based health plans of this kind.

Rediscovering this history, and developing innovation in consumer self-organisation, are essential parts of the process of enabling Australians to own major change in the health system by understanding it as a return of health care to ‘our’ communities, away from control by bureaucrats and providers.

Medicare Select is a framework in health reform that is compatible with these dynamics. At last we have something in health reform that is worth debating.”

• For information on the CIMID Health Plan

Related Posts

Comments 5

  1. Trevor Kerr says:

    Agree with Vern, but it’s idealistic. In reality, it is not a level field for all players, as pointed out very well by Katie Lahey (BCA) in The Australian today. Consumers cannot make sensible decisions about their own health care because they are outside the loop of knowledge.
    Juanita Fernando from Privacy Foundation was making that point on the 7.30 report tonight, in relation to the development of a shared electronic health record.
    And, again in The Australian today, Karen Dearne is quoting NEHTA (Peter Fleming) to be moving toward a position of commercial providers holding individuals’ health information. Microsoft and Google come up in that discussion, but how interesting to reflect on Rupert Murdoch’s preferences. I mean, he is well known to dislike Apple (a leader in the supply of end-user gadgetry), and he is currently on the back of Google for the way it collects news and distributes it free of charge.
    Medicare Select is invalid unless it truly offers consumers a choice of competing plans, as Vern lays out. But that capability relies on true portability of health information. As a model for the future, if nothing else, it’s worth hanging on to because it forces thinking into what is required to have total freedom of choice whilst preserving the greatest possible privacy protections, with security locks that are easy to use and audit trails that are accessible to the public.

  2. Trevor Kerr says:

    The 7.30 Report brought up the 16-digit identifier, that Nicola Roxon explained was similar to, but better than, the Medicare number.
    Perhaps DoHA and Human Services can be brought before Estimates to map out where they think the IHIs will intersect with Chris Bowen’s identifiers for dispensing $100bn p.a. of payments.

  3. deccles says:

    Isn’t this advocating a HMO model ala the United States? Will not that result in many people not receiving any coverage? Also there will only be choice on one side of the Great Dividing Range – cross it and you will have one option, take what’s on offer or leave it.

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