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complementary medicines
conflicts of interest
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international medical graduates
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men's health
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MyHospitals website
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NHMRC
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paramedics
pathology
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pharmaceutical industry
pharmacy
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private health insurance
quality and safety of health care
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Six policies we won’t be seeing this election campaign

We’re off the blocks, out of the gate, hitting the road and [insert sporting cliché of choice] in the race to determine the next government of Australia.  Over the course of the campaign Croakey looks forward to bringing you some insightful commentary and critiques of the policies the parties will bring to the election table and analysis of what this might mean for our health system.  We welcome and look forward to your contributions and feedback as well in what we hope will be stimulating and diverse coverage which goes beyond the narrow focus of the mainstream media.

First up, we have put together a list of six election statements that you WON’T be seeing this election campaign from the major parties and the reasons why these issues should be on their agenda.

Focus on the ‘private’ health sector

The public health sector is a common target of government reviews and reforms and is subjected to ongoing scrutiny by the media. In contrast, the private sector has been insulated from many of the recent reform measures and does not receive the same level of attention from the media or the general community.  This is curious given that almost all ‘private’ healthcare in Australia receives significant levels of public subsidy through a range of mechanisms (Medicare, the Pharmaceutical Benefits Scheme, the PHI rebate as well as safety-nets for high out-of-pocket expenses).  Given that both the public and private health sectors share a common health workforce which is (largely) publicly trained, the private sector cannot accurately be seen as independent from the public sector or from public funding. Therefore, it is in the interest of the general public that the performance of the private sector be examined in more detail to determine whether or not it delivers value for money (and in what areas) and how it interfaces with the ‘public’ system.   This includes evaluating the $5.5 billion per year provided via the private health insurance rebate.

Unfortunately, there are just too many powerful vested interests in the private health sector for either major party to touch.  The Opposition will claim it will reduce ‘health bureaucracy’ but unfortunately in practice this is more likely to mean losing a part-time health promotion person in a Medicare Local rather than improving the cost-effectiveness of the private sector.

Re-thinking Fee-for-service

We know it doesn’t work for most of the major health challenges facing our community (chronic illness, Indigenous health, preventive care, mental health).  Not only is it inefficient but it creates barriers to the provision of more coordinated and multi-disciplinary care, which is needed to adequately manage most chronic and complex conditions.  It creates perverse incentives for providers to see more patients, more often and does not promote quality of care or optimum health outcomes.  Fee-for-service also entrenches divisions between health professions in an environment in which best practice supports greater engagement and integration.

However, the AMA has fiercely resisted any attempt to reduce the role of fee-for-service payment systems, seeing this as a challenge to the autonomy and authority of the medical profession. Neither major party will risk alienating this powerful interest group during an election campaign.

Supporting genuine consumer input

The role of consumers in the health system has expanded and consumer input is now an accepted part of the development and implementation of most policies, programs and services. However, in many ways the health system still reflects the interests of providers rather than consumers. One reason for the slow progress in re-orienting the health system around consumers’ needs is the fact that the peak consumer body, Consumers’ Health Forum, is not adequately resourced and is dependent on short-term government funding arrangements for a significant proportion of its work. Genuine reform of our health system cannot occur until there is systematic consumer engagement at all levels of the health system via well-connected and resourced consumer networks.  Resources are also required to support and recognise the expertise and value of consumer advocates and leaders and to undertake high quality research into consumer engagement mechanisms.

Creating a statutory authority for consumer health issues, with guaranteed long-term funding and support for research, would provide the security, independence and resources to maximise the influence of consumer engagement throughout the health system.  However, this would require an unprecedented level of vision and commitment by the government (and potential government) to long-term health system development.

Taking the impact of climate change on health seriously

Climate change is one of the greatest threats facing our health system today.  Unless addressed, the health impact of climate change will be widespread and devastating including increases in infectious diseases, impact on food production and consumption, dislocation of populations and significant impacts on social and economic security. Extreme weather events associated with flooding and heavy rains will cause loss of home and livelihood, fatalities, traumatic injuries and post-traumatic stress disorders. Addressing the health risks of climate change means acknowledging the impact of Australia’s own carbon emissions and acting to reduce them. It also involves working with other countries to make positive changes to reduce the impact of climate change globally.

Climate change is a tricky political issue, requiring a balancing of domestic and international interests and a long-term (as in outside of the 2.7 years of an election cycle) view.  It is also an issue on which the major parties have done their polling and its attractiveness as a wedge issue to both sides of politics makes it almost impossible for a serious policy debate to occur. Therefore, despite the wealth of evidence supporting the health risks of climate change, it is unlikely that the political masters of campaigning and spin will allow their health portfolio holders near this issue during the campaign.

Opening up the Pharmacy Guild Agreement

Community pharmacy is currently funded via a $15 billion, five-year agreement, funded by the Australian tax payer.  This agreement covers the services that pharmacists provide (or are supposed to provide) to consumers when dispensing prescription medicines, as well as a range of other services.  In return, as well as the $15 billion, pharmacists are provided with a range of favourable conditions in which to carry out their business, such as restrictions on the location of new pharmacies and ownership conditions which effectively prohibit major retailers from opening pharmacies.

The Consumers Health Forum of Australia (CHF) has argued in Croakey previously that the current agreement lacks four basic elements of good governance: accountability, participation, predictability and transparency. CHF CEO Carol Bennett has called for the Government to consider a new funding and governance model, which involves all the key stakeholders, when the current agreement ends in 2015.  It’s hard to argue with this reasoning but, given the power of the Pharmacy Guild, both major parties will be doing their best to avoid this issue during the campaign hoping that their ‘consensus of silence’ will take it off the political agenda.

Cracking the co-payment conundrum

Co-payments are a significant component of health funding in Australia, representing over 18 per cent of total funding. By international standards, co-payments in our health system are high and there is evidence that they are creating barriers to access for many consumers.  Co-payments are currently implemented in an ad hoc manner across the health system with no overarching policy or coordination.  The aim of co-payments is not clear and there is little evidence that they reduce unnecessary demand for services. In reality, they create barriers to access for vulnerable groups and shift the burden of health care from the affluent and healthy to the sick and the poor, thus reducing the overall equity of our health system. Co-payments can also reduce the efficiency of health care as they steer people towards the lowest cost (at the point of service) form of care rather than the most cost-efficient.

Unless the increasing problems caused by co-payments are addressed through a comprehensive policy based on community values and priorities, they will continue to undermine the goals of the health reform agenda as well as the overall equity and efficiency of our health system.

Either major party could easily commit to developing a coherent co-payment policy but historically neither of them has been willing to be up-front about the limits of health funding and the need for consumer contributions.  It’s much easier, in the crowded campaign environment, to talk about bulk billing rates and hospital funding and ignore the impact that rising health care costs are having on consumers. Expect the double-speak to continue.

Comments 7

  1. john2066 says:

    Agree. Its absolutely outrageous that pharmacists can block any competitors within 1.5km of current pharmacies. Everyone else competes, except for this ‘guild’.

  2. Professor Tournesol says:

    ‘Fee for service’ isn’t the problem, it’s the way that the fees are structured. Whilst it continues to pay more to see more patients in an hour and there’s a financial dis-incentive to provide longer consultations, don’t be surprised if most doctors choose the more lucrative route. As a psychiatrist, I’m already choosing to forgo a possible 20% increase in my hourly income as I choose to see 1 patient an hour instead of quick 15 minute reviews. Fix this problem first and then let’;s see what happens, of course it won’t happen as the headlines focus on quantity rather than quality.
    Co-payments are so high because rebates haven’t kept pace with CPI whereas rent and staff wages have. Again, easy to fix but it costs money.

  3. Delia says:

    Great article. Ironically, just as America’s private health system is moving forward (under Obama) to open disclosure about cost and quality, Australia’s public health system is retreating (under Gillard/Rudd and Abbot to be) into secrecy, price fixing and uncompetitive practices. The USA has just published a list of the costs of the most common hospital procedures being charged by all it’s hospitals. The results show mark ups of 400% or more, with absolutely no increase in quality what so ever. The Obama administration is starting up a website this year, for Americans to report ‘hospital errors’. Hospital funding is now being linked to increased use of computers, decreased errors and lower costs. In Australia, the different costs of common hospital procedures are kept secret. So are reports into sub standard and overpriced private hospitals that even private health funds are questioning supporting. The day Australians can access up front information on actual cost and quality of healthcare, is the day Australia’s hospitals will improve. And neither political party has that on their agenda. http://www.wikihospitals.com.au

  4. Gavin Moodie says:

    I believe fee for service is a big problem by converting government subsidies into opportunities for practitioners to profit. It is far better for government funding to be directed to clinics staffed by salaried practitioners.

  5. Professor Tournesol says:

    Gavin, whether practitioners work under a salaried or fee-for-service model they profit from the illness of others. Is profit the problem for you, or excessive profit? If the rebate had kept pace with CPI for instance then doctors who had increased fees in line with CPI would be charging the rebate and only leaving those with excessive increases charging out of pocket fees for patients. This is what creates the financial incentive to keep a brake on costs. as it is now the choice for doctors is between no out of pocket costs but short appointments, or out of pocket costs with longer appointments.
    The reality is that the rebate fee has lagged behind CPI and practise management costs every year since the introduction of Medicare and this is why we have a large gap.

  6. Gavin Moodie says:

    By profit I mean the difference between the purchase price and the costs of bringing the service to market. Fee for service encourages practitioners to maximise their profits. Salaried service would encourage practitioners to provide the service for which they were employed.

  7. Professor Tournesol says:

    In my own experience it allows me to cost shift from those who cannot afford a gap to those who can, it allows me to see many people who couldn’t afford it otherwise. If the cost of bringing the service to market equalled the purchase price I would go out of business just like everyone else. Even if I were salaried, my salary would be an additional cost over the cost of bringing the service to market, it’s just borne by the salary payer. It also encourages underwork, it also means that what I do and can’t do is dictated by my terms of employment, not by clinical demand. I work as a perinatel psychiatrist providing a service that is just not provided in the public sector as apparently this problem is not ‘serious mental illness.
    What we really need is the right mix of salaried and FFS, as each has their strengths and limitations. FFS gap payments result from inadequate Medicare rebate fees.

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