HEALTH SYSTEM REFORM REVISITED

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HEALTH SYSTEM REFORMREVISITED

• ANDREW PODGER
• 4 May 2007

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Health System Reform Revisited

• Moving forward next incremental steps
• Systemic reform room for compromise amongst
  reform advocates
• PHI no consensus, but need for a coherent
  policy
• Controlling costs

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Assessment of Australias Health System

• Generally good
• - overall health outcomes
• - equity and access
• - but Indigenous health terrible
• - and cost control an increasing concern
• Not well-designed for emerging challenges
• - patient-orientation for chronically ill,
  frail aged
• - allocational efficiency

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(No Transcript)
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Moving forward incremental steps

• Sensible recent measures
• strengthened primary care, broadening MBS, GPs
  strategy eg mental health, care coordination
• ageing-in-place, increased community care for
  aged
• information investments
• national accreditation of workforce

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Moving forward further incremental steps

• Disappointing omissions to date
• - regional reporting and planning
• - cooperative approaches to primary care
  planning and delivery
• - long-term commitment to increased
  Indigenous primary care resources
• - rationalisation of federal responsibilities
  for aged care
• Possible further incremental steps
• - additional funds for primary care in
  regions with low spending
• - CSHA focus on outputs and best-practice
  purchasing

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Systemic Reform Room for compromise?

• Common ground
• - single funder
• - regional framework
• - increased primary care/prevention
• - funder/purchaser/provider framework
• Differences
• - which single funder model
• - role of PHI

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Possible compromise on single funder model

• (Transitional?) collaborative approach
• - bilateral financial agreements
• - some form of health commission(s)
• - state role in regional planning and
  purchasing bodies
• - national policy parameters set by
  Commonwealth after consultation
• Commonwealth as single funder/purchaser still
  best option for long-term

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Model for Single Commonwealth Funder Health
System
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Single Funder Model
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Possible administrative arrangements under
compromise model

• National policy department advising Australian
  Government Minister on policy and standards
• Commission(s) as joint purchasing authority
• - with regional planning and purchasing
  bodies linked to community and provider groups eg
  GP Divisions
• Medicare Australia as administrative agent of
  Commission and its regional bodies, paying for
  most health services
• AIHW as independent reporting authority,
  including annual regional reports on population
  health, service utilisation and expenditures.

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PHI need for coherent policy

• Which philosophical view of equity and choice?
• (a) all must be in same queue or
• (b) anyone may jump the queue, but then forgo
  right to any subsidy or
• (c) anyone may jump queue, and retain right
  to some of the subsidy otherwise available
• Judgment may depend in part on the standard of
  the publicly-funded system
• Do competing health funds improve efficiency?
  (not much if at all)

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• Estimated Hospital Costs per person per year
• by Funding Source, 2002-03

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A coherent policy under philosophy (c)

• Cap PHI rebate, and remove additional subsidies
  for the aged
• Remove Medicare Levy Surcharge exemption
• Establish even playing field for public and
  private hospitals for both public and private
  patients
• - require casemix purchasing in next ACHSA
• - case for further reform over time with
  funds meeting all hospital costs of their members
  whether public or private patients, and including
  in-patient MBS and PBS (with adjustments to
  subsidies)
• Firmer contracting with doctors and clearer
  insurance benefits for members
• - no or known fees
• - aggregate copayment limits

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Future financial controls

• Continue PBS/MBS cost effectiveness approaches
• - extend to hospital procedures etc
• Continue to develop more sophisticated purchasing
  policies
• - including more use of competition amongst
  providers
• Regional budgeting and use of soft caps
• Realistic approaches to copayments, particularly
  for any new Medicare-covered services, and where
  choice available
• Continued but reduced (hopefully) role for queuing

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Conclusion

• Australias health system generally good
• - but not designed for emerging challenges
• Recent incremental measures mainly in right
  direction
• - but complacent on patient focus, allocative
  efficiency and cost control
• - key priorities now regional framework,
  improved primary care/prevention (partic.
  Indigenous), rationalised aged care
• Systemic change viable and worthwhile
• - much common ground
• - room for compromise to move to single
  funder
• Less common ground on PHI policy
• - need to settle coherent approach that is
  fair, promotes efficiency and allows choice
• Need more realism on cost controls