Wednesday, December 13, 2006


Hospitals will face renewed pressure to save money, cut waiting times and tackle superbugs under new performance targets to be set today by the Government. In his first report as chief exective of the NHS, David Nicholson has compiled a list of priorities for the next financial year, including a target for a 250 million pound budget surplus by March 2008. He will also demand faster access to treatment and less of a “postcode lottery” of health inequalities. A new benchmark is to be set for the 18-week waiting times target — widely regarded as the most ambitious of all NHS targets — that almost all hospitals will treat patients within that time by March 2008. The Government has pledged to have all patients treated within 18 weeks of a doctor’s referral by the end of that year.

Mr Nicholson’s target for a 250 million surplus comes amid rising levels of debt in the NHS. Funding has more than doubled in ten years, but the total NHS deficit has also risen. Thousands of job losses and other cost-cutting measures have already been announced to make savings, but Patricia Hewitt, the Health Secretary, said yesterday that hospitals that did not meet the 18-week target could be penalised with further financial sanctions. About half of all hospital patients are currently treated within 18 weeks, but further progress has been limited by bottlenecks of patients waiting weeks for scans or test results.

Meanwhile, nearly a third of hospitals and a quarter of all 570 NHS organisations failed to balance their books in 2005-06, leaving the NHS with a net deficit of 547 million pounds. The latest figures show that 120 of 548 NHS organisations are now predicting deficits for the current financial year, with 90 per cent of the estimated gross deficit originating from 71 trusts. Despite this, ministers are confident that the NHS will generate a profit by next year, but that will become even more difficult to achieve after 2008 when extra funding supplied by the Treasury is due to dry up.

John Appleby, chief economist at the King’s Fund, the health think-tank, said that the new surplus target was intended to provide a “buffer” to the anticipated drop in the rate of growth, from a 10 per cent year-on-year cash increase to between 2.5 to 3.5 per cent by 2008-09, he said. “There’s a paradox of lots of money going into the NHS but trusts still overspending and going into debt. It is possible that across the NHS the system can generate a surplus by 2008, but whether the system can meet that at the same time as meeting other performance targets is open to question.”

A Department of Health spokesman said: “Only by managing finances efficiently can NHS organisations develop and improve services. The majority of organisations are delivering on finance and patient care, but more need to generate surpluses to recover historic overspending.” Hospitals affected by the latest superbug, Clostridium difficile, will be able to bid for grants of up to 350,000 pounds each from a 50 million fund to combat infection rates. The grants could pay for measures such as extra basins for hand-washing in an attempt to stop the spread of C. difficile — which kills three times as many patients as the better-known MRSA, Ms Hewitt said.

“MRSA has been coming down, thanks in part to the target we set some years ago,” she told The Sunday Edition on ITV. “C. difficile, this new and very nasty bug, is bad in some hospitals but not in others. “So we want local hospitals to look at their own performance and, where they are not doing well enough, to set a local target agreed publicly with their local NHS. We are backing them up with more money — up to £350,000 for each hospital organisation.”


Reality debunks myths about Australian private health insurance

Some comments by a health insurance spokesman. Health insurance is normally taken out by individuals directly in Australia -- rather than through the employer, as in the USA

With the introduction to Parliament on Thursday of the Government's legislative changes aimed at broadening the scope of care for which private health insurance funds can pay, it is a good time to reflect on what benefits broader health care may provide, and why things need to change.

The National Health Act was introduced 50 years ago, but medical practice has altered dramatically (for the better) over those 50 years. However, until now this Act has constrained the health funds from providing some of the most appropriate care options for members. People who are opposed to improvements in the system are acting against the interests of those 10.2 million Australians who have chosen to take out private health insurance. The consumer expects to receive the most appropriate health care in the most appropriate setting. It is common sense that expanding the opportunity for an efficient private health insurance industry to cover the full range of modern treatments will result in improvements in clinical outcomes. Innovative care options, offering perhaps a substitute for expensive hospital care, or a shortened length of time spent in hospital - or even preventing people from going to hospital in the first place - could be introduced.

The truth is that the proposed private health insurance legislation allows for all these options, thus providing a modernised framework to deliver the most exciting advances in health care in 50 years. However, myths abound, which promote a different story. So, what are these myths about the present and the proposed systems?

The first, and most common, myth about the present system is that the 30 per cent rebate offered to Australians who have taken out private health insurance is a waste of public money, providing no benefit to the public system. The facts tell a different story. Figures showing the number of public beds available per 1000 uninsured Australians (ie those Australians reliant on Medicare), indicate that the 30 per cent rebate has freed up 1.3 beds per 1000 people (see chart). These "extra" beds are now available in the public system for Australians without private health insurance to use -- a direct benefit flowing from the 30 per cent rebate.

Equally, those Australians who have chosen to take out private health insurance in fact are utilising their insurance (thus relieving pressure on the public system), with an additional 900,000 operations per annum being performed in private hospitals since 2000 (the year the rebate was introduced). All Australians know the public system could not cope with another 900,000 admissions each year.

Another myth is, of course, that those people having private insurance, and undergoing treatment in the private system, don't really need that treatment. In fact, private health funds pay for more than 50 per cent of the surgical procedures performed in Australia. This includes 54 per cent of major procedures for malignant breast conditions, 55 per cent of chemotherapy treatment, 64 per cent of major joint replacements and 68 per cent of same-day mental health treatment - procedures that can be life-saving. Without the 30 per cent rebate, there would be an immediate influx of these non-discretionary surgical procedures into the public system.

In the face of criticism as to whether the "value proposition" of private health insurance is accepted by Australians, one needs only to realise that over the last 12 months the number of Australians taking out private health insurance has grown by 220,000. Pleasingly, the most recent figures show the percentage of 20 to 35-year-olds with private health insurance (traditionally a market regarded as rejecting private cover) has grown by 2.1 per cent in the September quarter. Another myth debunked.

So, what of criticism - such as that from Stephen Leeder (Weekend Health, November 25) - that the broader health care legislation will advantage those with private health insurance over those without? This is another myth ripe for debunking. Leeder and other critics of private health insurance would be interested to know that the Advanced Community Care Association of South Australia (an organisation delivering excellent out-of-hospital care in the public system) spoke at the annual conference of the Australian Health Insurance Association, and it was lauded for its initiative. There is a strong possibility that a model used in the private sector may emulate a model such as this from the public system. The fact that such a system is already operating successfully in South Australia's public hospitals is not only a credit to the organisation, but also a direct rebuttal to the claim that such options will be available only in the private sector.

However, if such an innovative program were implemented, allowing privately insured patients being treated in public hospitals to be treated in a more appropriate setting under a broader health care initiative - and in the process, freeing up resources and beds for other public patients with myriad other illnesses - most would judge this to be a good thing, both for the privately insured patients and for the public system which will have more resources available. To suggest otherwise seems perverse. Via these newly introduced legislative reforms, private health insurance will be provided with a great opportunity to advance the health care of Australians, and the benefits will flow to both components of the mixed health care system that operates in Australia. The private health insurance industry is excited about the possibilities. The changes are positive, and are worthy of widespread support. If people look past the rhetoric of the myths they will find a private health insurance industry which is capable of, and intent on, delivering improved health outcomes for consumers.



For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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