Fixing a dysfunctional health system


The responses of John Howard, Bob Carr and the Productivity Commission to the problems of our dysfunctional health system caused by the Commonwealth and State division of responsibility are welcome. But is it more than political posturing? Tony Abbott raised the same issues six months ago and nothing happened.

We need the vision and resolution of a Keating and a Kennett to break the impasse. A solution to the Commonwealth/State division lies where it has always been, with the Prime Minister and Premiers.
Whilst more task-forces and a Productivity Commission inquiry will be useful and perhaps even provide a circuit-breaker, the problem is widely understood and acknowledged, not only by health professionals, but the community. What is lacking is political will.
Political leadership would not only deliver dividends in efficiency and equity in health care. I am certain it would also deliver a political dividend to the leader or leaders who drive the change. Good health policy would become good politics.
A political deal is the key first step. Once that is achieved I am certain that the legal, governance, administrative and financial arrangements could be resolved.
The problem has been plain as any interested observer can see. So much of the debate is about the funding of health services through Medicare when the real problem is a health delivery system which is badly out of date.

As the late Dr John Patterson described it, the system is nearing the end of its architectural life. All our political debate is about how to provide money to fund a ramshackle delivery system.
The divided responsibility between Commonwealth and State Governments ensures that we do not have a modern and integrated system of health care. For example, the Commonwealth funds general practice, pharmaceuticals and aged care, and the States provide a great deal of the rest, particularly hospital care. The result is people flocking to State-run emergency departments of hospitals because of the lack of Commonwealth funded GPs in the community. The old and frail are in expensive State hospital beds when they would be better and more efficiently cared for in the community and in aged care facilities which are funded by the Commonwealth.

The debate is so often about more hospital beds when about thirty per cent of patients in hospital need not be there if there was appropriate care in the community.

In 2002 Commonwealth and State Health Ministers were advised by expert reference groups about the problem:
The current fragmentation of the health system has been identified by all groups to be the most significant barrier to realizing optimal health outcomes for Australians. The system is considered to impose artificial and arbitrary boundaries on consumers and health professionals who need to manage episodes of care in a flexible and coordinated manner the overwhelming message from the Groups is that this lack of integration is unsustainable, expensive and detrimental to health outcomes.

There is broad agreement that consumers have the right to receive timely, appropriate and quality health care in a seamless environment. The care delivered should be determined by clinical need, not by the limitations or conditions imposed by jurisdictional boundaries or other funding or professional silos.

We are continuing to spend more and more in health. Health care is our biggest industry and represents about nine per cent of our GDP. Governments pay about seventy per cent of our total health bill. Our burgeoning health expenditures must be linked to reform of the health delivery system.

If I was a Commonwealth or State Treasurer I would insist on this reform as a condition of any extra funding. In fact, more funding is often counter-productive. It addresses the symptoms and delays a solution to chronic problems. Surgery is required, not more band-aids.
The Productivity Commission estimates that a ten per cent efficiency improvement in health would deliver a dividend of about $8 million at the present time, and as much as $16 billion by 2050. I think that is conservative.

We have not only the inefficiency of the Commonwealth and State division. We have an incoherent and archaic work-force structure.
We have seen the benefits of substantial productivity changes in the blue-collar workforce, but these changes have not touched the professions and particularly the health sector. Because of restrictive practices less than ten per cent of normal births in Australia are managed by mid-wives. In the Netherlands it is over seventy per cent and in the United Kingdom over fifty per cent. Demarcations and restrictive work practices abound. Senior nurses leave the profession in droves because of denial of career advancement through opposition by doctors and inaction by their own associations. If there is not a forty per cent increase in workforce productivity possible over the next ten years I would be very surprised.

The best solution for our dysfunctional system would be for the States to hand over all their health functions to the Commonwealth. If that is not politically feasible I have developed a proposal. In this proposal the Commonwealth could make a deal with any one State without waiting for reluctant States to sign up. Hopefully once the ball is rolling, other States would see the benefits and sign up also to an integrated health system.

Under reform of Commonwealth and State arrangements several important principles should be observed.
The first is that we need integration of all Commonwealth and State services and the pooling of all of the funds involved.

By taking over State hospitals only the Commonwealth would relieve the States of financial pressures but leave unresolved the need for integrated care across such areas as mental, community, dental health and aboriginal health. Boundary and jurisdictional disputes would continue.

The second is that it is essential that health reform is grounded in primary care: for example, access to GPs, illness prevention, health promotion. Hospitals are essential in an integrated health system but they must be the last and not the first resort. Unfortunately, the hospital lobby dominates the debate and skews the allocation of resources away from primary care and particularly mental health care.
Third, a reformed health service should be delivered at the most immediate and local level possible consistent with safety and efficiency. There must be local ownership.
The fourth is that an informed and involved community is the best ally in a reform process.

So often the health ‘debate’ is between insiders “ doctors and Ministers. The community often has quite different views on health priorities and where scarce health dollars should be spent. In community surveys mental health always comes to the top of the list.
In the health reviews I chaired in NSW in 2000 and in South Australia in 2003 I was told by numerous groups and people, ‘It is all very well for State Governments to review their health systems, but the real problem is the confusion, blame and cost shifting between the Commonwealth and State Governments’. They were quite right in their assessments.
The community and the health sector is anxiously awaiting leadership in health reform. Is there a politician today like Paul Keating or Jeff Kennett who is prepared to grasp the nettle?

John Menadue compares the major parties’ positions in the recent article Five key issues in health

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