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“The accidental logic of health policy in Australia” – some progressive ideas for reform

A new book aims to provide an antidote to policy failures arising out of “an ideology built upon faith in markets and a distrust of governments”.

The authors of the health chapter, Professor Fran Baum and Professor Judith Dwyer, summarise below their contribution to Australian Public Policy: Progressive Ideas in the Neoliberal Ascendency. 

“Overall, our message echoes that of the book as a whole – free markets work well for some limited purposes but they won’t help us control health costs and promote health and equity in the Australia community,” they say.

***

Fran Baum and Judith Dwyer write:

These are tough times for those committed to the ideals of social democracy and the policy ideas that flow from them. There are few contemporary policy analyses or prescriptions for these ideas.

However, a new book, Australian Public Policy: Progressive Ideas in the Neoliberal Ascendency (edited by Chris Miller and Lionel Orchard), does provide many ideas.

In a foreword to the book, former Governor of the Reserve Bank Bernie Fraser says that many recent policy failures in Australia owe a lot to “an ideology built upon faith in markets and a distrust of governments”.

The book explores that concept in 20 chapters covering a wide range of policies including the GFC, welfare reform, childcare, education, housing, and environment.

We contributed the health chapter “The accidental logic of health policy in Australia” and noted that our health system has resulted from a mish-mash of history, culture, structure and institutions that is more accidental than a result of deliberate design.

We argue that health policy in Australia is shaped by its response to three fundamental challenges:

  1. how to maximise health outcomes (long and healthy lives); 
  2. how to ensure equity in access to health care; 
  3. and how to operate an effective health care delivery system within constrained resources.

1. Maximising health outcomes

We argue that the noise and heat in health policy debates is often driven by the question of who gets what health care at what price and standard.

By contrast, if the underlying goal is healthy life, a focus on addressing the social determinants and adopting a preventive focus in health systems is a more direct route to health gain.

The most important issue in terms of maximising health outcomes is closing the health gap for Australia’s First Peoples. This will involve addressing living conditions, racism and improving access to high quality health care.

Building trust and inclusion will be vital. So will continuing to support, strengthen and resources the Aboriginal community controlled health sectors.

2. How to ensure equity in access to health care

In this section we point to the strong evidence in favour of universal access and public funding of health care. We also note that health systems based on the principle of universal coverage achieved through public financing are generally cheaper, more efficient and more equitable.

In many ways our arguments go to the heart of the issue at the centre of the whole book – is the market the most efficient and equitable way to organise our society?

Health deals with issues of life and death, our hopes for long healthy life and our fears of pain, grief and loss of capacity.  Health as a public good is an area where market principles (such as informed choice by consumers) just don’t work.

So while the cost of Australia’s health system is neither ‘out of control’ nor unusually high, there is no reason to believe the sustained upwards pressure of the last 50 years will stop, and significant effort to contain costs in Australia, and other OECD countries, will need to continue.

The complexity of our funding models are shown by the fact that most occasions of service paid for by the Australian government are delivered in the private sector, while most funding for public health care providers comes from state governments (including some funding transferred from national to state governments).

Our system of universal access to essential care is not perfect. There are many other barriers to access including include out-of-pocket costs, shortage of supply of needed services, complex eligibility requirements, distance and lack of transport, and reluctance to engage because of experiences of discrimination or judgmental responses.

Nonetheless, Medicare as a universal publicly funded scheme is vital to health access.

We also review evidence suggesting that comprehensive primary health care is the most effective and cost-efficient basis for a health system. 

By this we mean:

  • Community-based services including first-level care (provided by general medical practitioners, nurses, and allied health professionals) and specialised community services like maternal and child health care, mental health care and family planning; and related services like pharmacy and radiology
  • Care for illness, rehabilitation from injury or illness, interventions to both prevent disease and promote health and well being of the community
  • Whole of population service planning
  • Community involvement in setting priorities and evaluating service quality.

We note that despite the importance of such services, the primary health care sector receives a very small slice of the health budget and investment in these services remains patchy and disrupted by government reorganisations such as the recent retreat from Medicare Locals.

3. Operating a sustainable and effective health care delivery service with constrained resources

The third health policy challenge is to provide an effective and sustainable health care system despite increased demand, and the availability of more diagnosis and treatment technologies, within constrained resources.

We note that the evidence indicates that one of the key factors to ensuring high performance and innovation is to give autonomy to health services at the local level. Despite this, our health system is tending to centralise control at the cost of local control.

Overall, our message echoes that of the book as a whole – free markets work well for some limited purposes but they won’t help us control health costs and promote health and equity in the Australia community.

Fran Baum is a Matthew Flinders Distinguished Professor of Public Health and Director of the Southgate Institute of Health, Society and Equity at Flinders University. Judith Dwyer is Professor of Healthcare Management at Flinders University.

***

Further reading

Why health reform is so hard – it’s all about power, by John Menadue.

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