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The health reform we DON’T need: Prof Stephen Leeder

Debate about the Medicare Select proposal continues.

Professor Stephen Leeder, professor of public health at the University of Sydney, argues the case against.

He writes:

“The prime minister, Mr Kevin Rudd, is conducting an extensive “direct consultation with the health sector and with communities around the nation” about the health reforms proposed by the National Health and Hospitals Reform Commission whose final report was received on June 30th this year.

As President Obama is doing in the US, Mr Rudd is taking a deep personal interest in health reform, and this is immensely encouraging.  The report of the Commission is a thoughtful, expanasive document that embraces the complexity of the health care system in its 123 recommendations, ranging from concerns about public hospitals through to the more arcane need for improvement in health literacy in Australia.

Mr Rudd has made it plain that there are constraints upon reform, not least the fiscal limits of the global financial crisis.  “Whatever options we adopt,” Mr Rudd has declared in stentorian voice, “we will be adopting them within the context of fundamental fiscal disciplines.”  Hmmmm.

An additional constraint is the sheer political and bureaucratic complexity of the health system, a kind of secular equivalent of the Vatican where states (bishops and cardinals) all have distinctive views and vested interests.  The Council of Australian Governments is the forum within which much of this political complexity is played out, and a special meeting of this agency is to be held later this year to consider health and hospital reforms.

Already changes in the way states receive money from the Commonwealth (much less earmarked funding, much more ‘do it your way and we will hold you to account) is changing the landscape.  Mr Rudd has threatened that unless things improve he will seek a mandate from the people on reform.

Against the background of Mr Rudd’s travelling consultative caravan and the 123 recommendations of the NHHRC, has emerged ONE idea and that is that perhaps we should change Medicare quite radically.

It is that we turn out attention as a moderate sized nation sprawling across the largest continent on earth to the health care systems that have been created with decades of travail and angst in two of the geographically smallest and most demographically compressed nations – the Netherlands and Israel.

Both Israel and Netherlands collect funds in one central pot, and then distribute a capitation payment to sickness funds on an individual and prospective basis. Israel adjusts its payment for age; Netherlands adjusts its payment for age, sex, region, employment status, and disability.

Under Medicare Select, which we are assured will not be like managed care, the ills of the current system will disappear.  Doctors will willingly move to the bush.  There will be no more miscarriages in hospital emergency departments.  Money, presumably a great deal of it  including $11B a year for public hospitals; $10B for the PBS, and $17M a year for the MBS will be rolled into one pool and allocated to whichever insurer you choose to arrange your care, according to a formula that takes account of your age and health risk.

Questions?  First, what is the problem Medicare Select is meant to solve?  Waiting lists, no doctors in the bush, poor mental health services?  If we are clear  – and this is where the NHHRC Report is weakest – on the definition of the needs that would drive reform, then we might be better able to assess the proposed solutions including Medicare Select.

There is a major imbalance between hospital and primary care in Australia, there is a health bureaucracy that has grown beyond the wildest imagination, there are entrenched political resistances in the medical profession and elsewhere, pantehnicons carrying chronic disease shipments are thundering down the toll way, public hospitals have been stripped and general practice struggles.  Will Medicare Select help solve these problems?

Second, is what is being proposed any better for Australians’ health, rather than better for the private sector providing health care, and if so, is that a reason to change from Medicare to Medicare Select?

Third, if you worry that current administration of Medicare is inefficient, and you would have a hard time proving that, would splitting it into three improve efficiency?

Fourth, how would competing health funds – the three or so agencies that would make up Medicare Select – be managed and by whom and with what skills?  The workforce challenge would be large.

Fifth, how would we assure equity in this setting?  Reflect for a moment on the problems of getting privatised Telstra interested in the bush.  Why should an agency (Green, Red or Blue Medicare Select) not seek to provide care only where the costs ot them are low?

Time, I think, to turn our attention to the other 122 recommendations and see what can be done.  In the words of AMA president Andrew Pesche, we should seek to fix what’s broken.  The things that are broken do not include Medicare.”

• This article was first published in Australian Doctor magazine

Related Posts

Comments 4

  1. Doctor Whom says:

    Medicare Select is a strange name to use. The name itself conjures up some notion of the worst of USA managed care and insurance.

    Leaving that aside – Stephen suggests that is all that has come out of Rudd’s “consultative” caravan.

    Having been to a few of Nicola and Kevin’s roadshows I’m as perplexed as anyone as to what exactly this roadshow is. It certainly isn’t consultation, unless 20 minutes of rhetorical questions and statements of entrenched positions from the usual suspects now counts as consultation. (I’d say that all the roadshow is meant to do is act as a lightening rod to see if the entrenched groups of doctors and nurses are going feral about the reforms and see how much Nicola and Kev need to listen to the AMA and ANF)

    Anyhow at the ones of been to I don’t think Medicare Select has even been mentioned. Calling it the ONE idea to emerge is a bit eager.

    Here in OZ we have a two tiered system (or 3 or more tiered if you add in the gold plated DVA system and others). The PHI subsidy sucks money away from the universal /public sector and despite the spin provides no relief to the public system and only some small relief to insured individuals.

    MBS as it is is not geographically or person or episode of care focused. It is still mostly fee-for-time based-service that forces, despite headline objectives otherwise, GPs to to do many short – time based services to remain viable. Again, despite headline gestures the current system does little to encourage and reward team work between GPs and specialists, GPs and hospitals, GPs and Aged Care, nurses, chemists, physios etc.

    Whats wrong with Medicare is the above and also the fact that the current PHI in Oz doesn’t really serve anyone well except some insurance companies, private hospitals and procedural specialists. GPs get bugger all from the current PHI, patients get bugger all, gov and treasury and taxpayers lose, and prevention under PHI runs to the earth shattering 10% discount at a few gyms.

    Heres a list of about one third of what what HBA will cover: Chiropractic, Osteopathy, Naturopathy, Homoeopathy, Western herbalism, Chinese herbalism, Massage, Acupuncture. About as much evidence based as a Dan Brown novel.

    Medicare Select (I’d rebrand it Medicare Universal and think a bit regional based) can provide a way through to do away with a two (or more) tiered system, fold PHI into Medicare Universal while turning our old tired Medicare into a capitation/casemixed/evidence based primary/chronic/complex care payment system.

    Pragmatically, for politicians, it would give the PHI industry something to do other than bleat, change the way primary care is delivered and probably be better and cheaper than what we have.

    The problems of what services can (or should) be offered to towns of less than 5,000 – 1,000 or whatever and other isolated Australians won’t be directly solved by an insurance system no matter how good it is. Other solutions will need to be tried.

    Do I think a a Medicare Universal (Select) is worth investigating thoroughly? – Yes.
    Do I think we need reform of the existing coverage? – Yes
    Do I think we can learn from the Dutch (and Danes, Germans and Brits) – Yes

    Do I think the Rudd gov.au will do anything about it in the next 2 years – No

  2. Gavin Mooney says:

    Agreed Steve. Medicare Select aint going anywhere we want to go. And turning our attention to the other 122 recommendations of the NHHRC makes sense. But within those 122, which? Where to start I suggest is with recommendation 93: “We recommend a systematic mechanism to formulating health care priorities that incorporates clinical, economic and community perspectives through vehicles like citizen juries.” Rather amazingly as the NHHRC implies there is currently no “systematic mechanism to formulating health care priorities”. That is disturbing. As Steve says “there are entrenched political resistances in the medical profession and elsewhere” and Medicare Select won’t resolve these. Agreed. But what might, if it can past these “entrenched political resistances”, is an informed open well structured and well designed priority setting system.

  3. William says:

    Doctor Whom writes…

    ‘Do I think we can learn from the Dutch (and Danes, Germans and Brits) – Yes’

    I assume (and I speak from bitter experience) you mean that we can learn how not to do it from the UK?

  4. Doctor Whom says:

    The UK do a lot of things well – Scotland especially does Primary care and aged care well – or at least a fair bit better and cheaper than us and they do basic dental better than us

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