<< back to archive index Date: 28th June How To Fix The Health System 1. Maximise prevention Prevention saves a lot of money, but gets little attention, because if a disease does not occur, it attracts no attention. Good immunisation levels means less epidemics. Quit campaigns will mean a lot less heart attacks, strokes and cancer. Smoking kills about 50% of smokers, and diseases occur decades earlier than they would otherwise- this adds to health costs. 2. Get a single source of funding A major driver of current health policy is the attempts by both Federal and State governments to transfer costs to each other. For example, the Federal government, by not increasing the Medicare rebate, made doctors less willing to see Medicare patients. So the patients go to hospital Emergency departments where the costs are borne by the State government. The State government saved money by closing down outpatients clinics in hospitals, so that patients have to visit doctors’ rooms, which is paid for Medicare, private insurance or patients themselves. In both cases patients were inconvenienced. The solution is for Federal and State governments to set up a single agency to fund all health care, so that the decisions can be made on how to give the best service for the total available budget. 3. Support a single system- the public system, but use competition to get the public system a better deal There cannot be effective competition at a patient level in health care, because competition assumes that consumers have power and knowledge and can refuse to buy. When people are sick, they want all the treatment they can get. They will not refuse unnecessary tests, and though they do not like high bills, they are forced to pay them. The government should thus set a standard, and manage to it. A single paying entity can use competition to ensure that agencies compete to provide services to it. The entity should run a comprehensive system with the maximum use of prevention, salaried staff and community support to lessen hospitals admissions. If people choose to go outside this universal system to a private alternative, that is their right, but it need not be taxpayer funded. 4.Integrate community support system Lack of home support leads to hospital admissions and increased costs. People who are disabled by age, disease or other causes may become ill and require hospitalisation or long-terms accommodation support. Many older peoples nutrition becomes poor because they cannot afford dental care, and often aged or disabled people can stay in their own homes longer if simple tasks like doing the shopping and mowing the lawn are done. Carers need support as they save the state a fortune. But health thinking is too based around short-term hospital stays, rather than population health. A more holistic approach is needed. 5. Have a public discussion of the limits of intensive care Intensive care services are very expensive, and often used inappropriately, for patients with poor medium-term outlooks. There needs to be an admission policy, so that people who are unlikely to have a reasonable quality or duration of life are not put in intensive care. People need ‘living wills’ to plan for their bodies, just as they plan for their money. A public discussion is needed, so that limitation of care is not seen as akin to murder, but rather a sensible approach to the inevitable. 6. Make more intelligent use of investigations and pharmaceuticals Pharmaceuticals are an increasing percentage of the health budget. Marketing pressures encourage doctors to uses newer, more expensive drugs, which are often not needed, and even breed more antibiotic-resistant organisms. Guidelines need to be produced and doctors must justify use of unnecessary drugs. To be listed on the PBS drugs should not only compete with other drugs, but with non-drug intervention. For example, recently listed Quit drugs are much less cost-effective than a TV campaign would have been. The government should buy technology on a cost-justification basis, and use it appropriately so that the overall cost-benefit is optimised, not the unit cost minimised. Giving out licences to purchase expensive scanners, which are then used on a fee for service basis give poor cost-benefit outcomes, as the owners of the technology become enthusiastic marketers. 7. Reform medical indemnity, replacing tort law with a safety management system Medical indemnity insurance is so expensive that it is forcing doctors out of practice. It leads to unnecessary investigations and consultations. It also delivers a culture of fear and cover up. Because mistakes cannot be admitted or discussed there is less chance of stopping similar future events. Preventing mishaps is losing out to compensating a tiny percentage of those affected. What is needed is regular and open discussions of cases which did not go so well. System failures need to be identified and corrected. Regular training updates must be provided for all staff. Doctors could opt in to the system as a quid pro quo of greatly lessened insurance costs. Medical colleges or universities need to be doing more systematic training for re-certification. 8. Pay a reasonable Medicare rebate and move towards a salaried medical service The failure to raise the Medicare rebate to keep pace with 25 years of inflation means that doctors cannot run their practices on bulk billing and will only bulk bill cases of hardship or where possible. Talk of a ‘safety net’ is code for the ‘removal of a universal service’, and sending a ‘price signal’. Sick people become poor because their expenses go up and their incomes go down. A universal system minimises administration costs. Overuse of services is less of a problem than discouraging poor people from coming to their GPs early, as GPs are a relatively cheap part of the system. Few people actually have operations they do not need, because people do not really like operations. 9. Set up community Medical Centres including salaried, para-medical personnel There is no particular need for fee for service, though this is assumed to give an incentive to keep medical staff working hard. Emergency staff are salaried, and there is no evidence that they do not work as hard as GPs. Better use could be made of GPs skills if medical centres with para-medical staff took some of the load in counselling, vaccination and some aspects of consultations. Ideally, there would be a salaried service. 10. Get a national dental scheme similar to Medicare Initially only doctors were in Medicare, but it was shown that optometrists could examine normal eyes more cheaply and with no loss of service quality. At present the lack of dental facilities in the elderly leads to nutritional difficulties. In unemployed people treatment, which can save teeth, is often neglected, leading to the need for extractions and longer terms problems of dentures. The question might be asked- why is everything in the body except the teeth? Naturally, as in surgery, cosmetic procedures would not be covered. This plan has many enemies. It is worth listing these and giving the most basic answers to some of their objections. Federal and State governments are reluctant to give up powers, even when their non-cooperation worsens results. Their health departments should be simply merged, with a per capita formula agreed for the population as a whole. The private health insurance industry cannot compete with Medicare as it has to assess each procedure on each eligible person, rather than having everyone eligible, and just to look at practice patterns to detect fraud. They do not want universal cover, as it lessens their market. However, a universal health system lessens the amount per capita spent on health and allows the benefits of prevention. This makes the country more competitive. Doctors prefer to set their own fees, rather than be on salaries. Doctors’ incomes may come down, but there will be enough people willing to do such interesting, prestigious and rewarding work on salaries. Economic dogma is its own impediment. Many in politics believe that competition at the consumer level is the only way to efficiency, but the lack of consumer knowledge makes this a fallacy, and it is better that providers compete within a framework where priorities are already decided. Sellers of technology and pharmaceuticals seek to maximise profits and this results in an emphasis on purchasing these at the expense of human resources and training. What is required is real cost-benefit analysis of technology and pharmaceuticals, and better management of the workforce. Tort lawyers cannot see any other way to compensate mistakes, despite the huge inefficiencies and lack of prevention in the current system. The example of the safety systems in virtually all other industries however makes a compelling case. Prevention involves a cost, and is strenuously resisted by the tobacco industry. Areas such as quit campaigns, obesity control and public exercise programmes are new areas for governmental action, which causes anxiety for those who only see today’s dollars. Expansion of new areas such as home support to lessen hospital admissions cause fear of a more generalised welfare blowout, and clearly need to proceed with a research-based agenda to see what is cost-effective. The same could be said for paramedical staff in medical centres. In poorer areas services such as counselling or physiotherapy which are mainly private, are unavailable to those who need them. Often doctors provide an expensive and incomplete service in areas that they do not have time for or no particular expertise. The question is which government has the courage to step through the difficulties and give Australia a world-class health system?

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updated: August 6, 2004