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More reflections on health reform: so much more is needed

In the previous post, the University of Queensland’s Professor Philip Davies asked whether we’d been having “cappuccino-style” health reform – an approach focused on the milky froth of health sector institutions while leaving the underlying, thick, rich espresso of health care delivery largely untouched.

Robert Wells, Director of the Australian Primary Health Care Research Institute and Menzies Centre for Health Policy at the Australian National University, responded to the post:

Professor Davies’ assessment of health reform two years on is a sad reflection on missed opportunities. Fortunately, the focus on the froth rather than the coffee probably means that we are not that much worse off for the experience and if Medicare Locals and Local Hospital Networks are given the right incentives and flexibility we might well be better off.

Unfortunately some of the major failures of the recent reform process are that it leaves in place the key weaknesses of our system: vested professional interests with undue influence; unresolved Commonwealth/state tensions; and increased rather than streamlined bureaucracy.

***

Below are two pieces reviewing progress to date – by Dr Tim Woodruff, vice president of the Doctors Reform Society, and blogger Mark Bahnisch, as well as a link to a report on the challenges of reform implementation that is well worth reading.

***

Important structural issues that contribute to inequity are yet to be addressed

Tim Woodruff writes:

Health reform was flagged as a major part of the election commitment of Federal Labor when it came to power in 2007. After input from a range of inquiries the Federal Government finally made some proposals, which faced substantial resistance particularly from state governments. Following a Council of Australian Government (COAG) meeting earlier this year, substantial agreement has been reached on what is proposed. It is now being implemented gradually.

There are two distinct parts to what the Federal Government has done and is doing.

Firstly there are funding commitments to various parts of the health system. Much of this should not really be regarded as reform as it is simply a recognition of the need for more funding.  Substantial increases in workforce have been funded but this is just recognition that there is a shortage. It is not reform.

The federal share of public hospital funding had fallen from about 50% to 39% since 1996 as states had increased funding in response to need and the Howard Government had not matched the increase. The proposed increased funding for hospitals will lead to a 44/56 Federal/States split by 2030. This is not even a return to previous funding levels. It is definitely not reform.

Inefficiencies

There are reforms, however, and reform is desperately needed to address both the inefficiencies and the inequities of the so-called health ‘system’.

There is no system. Patients are faced with the nightmare of negotiating the public hospital system, the publicly subsidised private hospital system, the GP system, the community care system, the publicly funded private allied health system, the mental health system, the publicly subsidised private dental system, the public dental system, the aged care system, private specialist system, the public specialist outpatient system, and a myriad of other poorly connected pieces.

Structural reform to integrate these systems is required but is not suggested. Instead, relatively powerless regional organisations called Medicare Locals (MLs) will be charged with co-ordinating the maze of primary care services. The new plan abandons proposals for the Commonwealth to take over all primary care funding so the added barrier to co-ordination will be a continuation of different sources of funding from federal, state, and local governments and other sources.

In addition another entity, hospital-centric Local Hospital Networks (LHN) will address just the public hospital side of hospital care. The two entities are expected to work together to integrate services despite their completely different interests and funding streams.

The funding silos for the myriad separate systems the patient encounters will remain intact and ignored by a Government intent on avoiding any significant structural reform of the primary care sector (GPs, nurses, allied health, dental), or the private hospital sector. This approach could be likened to applying a bandaid to a bleeding fractured leg. Will patients notice?

Hospital funding mechanisms/performance indicators

There are also reforms to how public hospitals are funded.

Firstly, the amount of federal funding will be dependent on how many patient s with particular conditions are treated. This is already the basis for funding in Victoria.

Implementation nationally will be challenging and the net result may be improved efficiency but there are potential problems paying for throughput rather than outcomes, as there is a perverse incentive to do more rather than do better. National standards are proposed however, and this can go some way to mitigate this problem.

The concern regarding standards and targets is that there is no evidence of a commitment to useful targets and the intention is to use these targets or standards to ‘punish’ hospitals financially.

One such target is waiting times for surgery. It ignores waiting times to get to see the surgeon and be on a waiting list. My patient needing spinal surgery has already waited a year just for an outpatient appointment.  That time, which may end up being 2 years, is ignored when measuring waiting times for surgery. She is almost housebound.

Once seen she may only wait 6 months for surgery, but her real waiting time will be ignored because the Commonwealth Government refuses to acknowledge the reality.  Waiting times are a joke.

Another proposed standard is access time to be seen in Emergency. But for years hospitals have been ‘gaming’ such standards for State Governments and will continue to do so when faced with financial penalties for failing to achieve unrealistic targets using inadequate resources.

Barriers to access

In addition to the challenges of negotiating the health system, patients are also faced with financial and geographical barriers to access. Medicare ensures universal entitlement but not universal access.

The most obvious shortage of health professionals is in poorer urban areas and rural areas. Whilst governments of all persuasions have developed programs and projects to address these issues, the approach is always to avoid the underlying structural problems in our health system, which guarantee that patients can’t find a doctor.

These reforms hardly mention ensuring equity or a fair go.

Instead, the approach is to address gaps in services.  Under the new plan the Medicare Locals will more quickly address the issue of after hours access than was previously planned. They are charged with filling the gaps that a flawed system reveals.

More importantly little is suggested for the 32% of sick Australians who, according to the Commonwealth Fund, fail to see a GP or get tests or fill out prescriptions because of costs. This is despite the fact that those facing financial barriers tend also to be those with the worst health outcomes.

Financial barriers to access are almost totally ignored by these proposals.

Indeed, the Commonwealth Government imposes such barriers for prescriptions.

Meanwhile, financial support for those who can afford private health insurance premiums continues to increase, enabling those lucky people to quickly access private hospital care, dental care, and allied health care in the community.  The rest wait or go without.

Geographical barriers to access are recognised in the proposals and in previous policies, with many programs to increase workforce and to encourage workforce to areas of shortage.

But these efforts ignore the dominant funding mechanism in our health system which is to direct Medicare rebates through providers for services rendered (ie fee for service), irrespective of whether those providers are in areas of need. This funding structure imposed by government attracts providers to rich urban areas where copayments can be afforded and health need is least.

Thus, well-intentioned programs to attract providers to areas of greatest need work in direct opposition to this basic fee for service funding structure, but the Government’s plan ignores this strikingly inefficient and inequitable situation.

Mental health

In this year’s budget significant new funding for mental health was promised. This was belated recognition of the parlous state of funding for this sector. In addition however, there was recognition that fee for service funding of psychologists introduced several years ago was very popular but was not as well directed as it could be. In other words, it wasn’t getting to many of the most needy who faced unaffordable copayments or lived in areas where there were inadequate numbers of psychologists.

The reform was to change the funding mechanism. If only there was recognition of this problem across the whole fee for service Medicare rebate system, we could begin to move towards an equitable health system.

Conclusion

The Health and Hospitals Reform Commission in its interim report suggested three possible structural changes to the funding of our health system.

The Federal Government initially chose the least radical ie taking over all responsibility for primary care. It reneged on that at COAG this year so we are left with a reform plan with minimal structural changes to the system despite system wide inefficiencies and inequities.

Whilst some patients will most probably notice some benefits from welcome initiatives like electronic health records, the most needy will continue to face financial and geographical barriers to access and few will notice the hoped for integration of services.

The obsession with efficiency appears to be more about throughput rather than health outcomes and there is no vision for an equitable system.

In five years time I suspect I will see my patients facing exactly the same problems as they do now, unable to find a doctor they can afford, negotiating the maze of professional services, or waiting at home in pain on narcotic pain killers, trying to get onto a public hospital waiting list because they weren’t smart or rich enough to get publicly subsidised private health insurance.

• Thanks to On Line Opinion for allowing re-publication of this post

***

Why we do need new models of care

Mark Bahnisch writes:

At Catallaxy, Judith Sloan reposts the text of an op/ed critical of the government’s health and hospital reform agenda. She concludes by decrying the results of the plan’s implementation, claiming all that has been achieved apart from “much higher funding from the federal government” is:

a motley collection of cute sounding schemes, such as the GP super-clinics and Medicare locals, with little purpose.

Over the last year, I’ve been working on a couple of research and consultancy projects in health workforce innovation and health systems research. So, among other things, I’ve learnt a bit about GP Super Clinics and Medicare locals.

Both are responses to a couple of inter-related issues: the difficulties of co-ordinating the provision of care (including through markets) and workforce distribution.

We’re often told that there are massive shortages of health professionals. But since the increase in medical places, we have more graduate doctors than health departments know what to do with. The actual problems go to how and where health professionals work.

GP Super Clinics are designed to take pressure off emergency departments, and particularly to do so in places where access to private doctors is restricted by cost and supply. Unsurprisingly, GPs tend to go to where the most money can be made, because of incentives driven by fee for service cost reimbursement models. That’s usually in the inner city and wealthier suburbs.

Just as importantly, GPs aren’t necessarily the most efficient providers of all aspects of primary care, and Super Clinics are based around models of care which bring together nurses and allied health workers, and use the full set of their competencies and skills to the utmost.

Such “new models of care” also respond to the fact that changes in population health mean that patients are increasingly suffering from “co-morbidities”: that is to say, a range of often inter-related conditions for which “bits of the body” specialists can’t treat the whole patient.

Think older people living with diabetes. Medicare Locals are intended to co-ordinate care for patients so they’re able to access what they need in one spot, rather than being bounced from clinic to hospital to specialist to GP. They’re also intended to deliver care better and more cheaply in the community, rather than in acute care public hospitals.

My biggest criticism of the implementation of these initiatives would be that the original vision has been diminished by separating primary care from acute hospital care governance, contrary to the Kevin Rudd plan. That’s going to make it harder to achieve the co-ordination of care, and potentially re-opens the whole can of worms about blame and cost shifting.

But to say that these are just “cute sounding schemes” is manifestly wrong.

Part of the problem here, aside from the perennial issue of vested interests and turf wars that plagues health policy, is that the government itself hasn’t departed from the one note narrative of “more nurses and more doctors”. That’s a pity too.

NB: These comments represent my personal opinion, and not that of my employer or of funding bodies which have supported research in which I’ve been involved.

• Thanks to Larvartus Prodeo for allowing re-publication of this article.

***

Challenges aplenty for implementation

Meanwhile, the Australian Healthcare and Hospitals Association recently released its report on the proceedings of recent workshops aiming to road-test reforms and identify the challenges for implementation (the two-day health reform simulation was previously reported by Croakey and Sharon Willcox).

The report can be downloaded here and is recommended reading.

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