Ian McAuley, health economist, Centre for Policy Development and University of Canberra, critiques the interim report of the National Health and Hospitals Reform Commission, released today:
Although some of its ideas such as a Commonwealth takeover of primary care and the “Denticare” scheme have attracted publicity, it is a timidly-written document, ducking the big issues we need to address.
It meekly accepts the existing “overall balance of spending through taxation, private health insurance, and individuals’ out-of-pocket contributions”, without questioning why such an accident of past incremental policy measures has led to an optimal balance, and without acknowledging the distortions and inequities caused by private health insurance.
For example, it acknowledges that financial rewards have attracted surgeons away from public to private hospitals, but does not link this with the waiting list problems faced by public hospitals.
And in parts it is simply incorrect: for example it states that without private insurance one cannot obtain private hospital treatment (Page 126). Perhaps it is too painful for the authors to acknowledge that the present support for private insurers penalizes the most self-reliant who pay for private treatment without reliance on insurance.
Its Denticare scheme has some attractive elements – dentistry should always have been part of Medicare – but its proposed administrative arrangements are clumsy and expensive, for it proposes churning of dental funding, first through the tax system, then through private insurance.
In accepting the present funding mix it puts the big question of collective versus individual funding into the “too hard” basket, taking great care instead to suggest schemes which sustain a role for private insurance – never providing any justification for why the private financial sector should have such a central role in health care, and never acknowledging that private insurance carries all the moral hazard of public insurance but without its benefits and without the benefits of price signals transmitted through co-payments.
And, for all its rhetoric about “connecting care”, its seemingly preferred option is to preserve a separation between primary care and hospitals, and while acknowledging problems in program fragmentation, is vague on practical means of integrating care.
For example, it still sees Commonwealth funding of medical and pharmaceutical care in two separate programs. And it dismisses without argument any possibility of bringing public and private hospitals under one funding channel.
While the Commission has presented three options, it is hardly neutral in their presentation. Option A, which involves the Commonwealth taking over primary care funding while leaving the states with hospitals, is the easy path, but, in prolonging the separation between hospitals and primary care, it preserves opportunities for cost shifting and misses many opportunities for governments to use primary care to reduce hospital costs.
Option B builds on Option A, with the Commonwealth taking over hospital funding, but the Commission raises the spectre of Commonwealth/State conflicts (as if we don’t have them already).
Option C builds on Option B, coming close to an integrated, single insurer scheme, of the type used in most other developed countries, but it is made impossibly clumsy by attaching it to a multiplicity of health “plans”, which it implies are a necessary aspect of universal insurance.
Overall it’s a timid report, written to entrench vested interests, particularly the health insurers. Surely we have learned that financiers cannot be relied on to serve the public interest
