Tuesday, December 06, 2005

Australian public health care on verge of a breakdown

An article by Clive Hadfield, a specialist physician

At last, Geoffrey Davies's report of Bundaberg mark II, the Queensland Public Hospital commission of inquiry, has been released. The conclusion: that an adequate and safe level of services is not being provided in Queensland hospitals and probably not in those of other states. A fundamental question is whether it would be possible to do so within Australia's free health system.

Queensland Premier Peter Beattie is the most recent premier to be bruised by his state health service. He has expressed the view that the Australian health system will fall apart by 2015. He has called for a national health summit. So what are the problems? Health care lies uncomfortably at the intersection of market capitalism and social care. Much dissatisfaction stems from this tension. A product promising relief from pain and long, if not eternal, life can extract a premium price. Doctors and pharmaceutical companies have always done well. However, public, often salaried, medical care expanded as part of a social ideal from the 1950s.

Nevertheless, there was no wholesale medical surrender of market power. Quite the contrary. The power given to professional colleges to maintain standards was used by some to restrict supply. They effectively priced themselves out of the public health system. Many an elderly man dies with a tube in his bladder after waiting years for prostate surgery. Professional groups who do not use strong market tactics such as cancelling operating lists are in a vicious cycle of decline, unable to attract trainees as their workloads grow. All the same, universal health care is seen as an important aspect of our society, a strong egalitarian glue.

The public hospital system is one of the last socialist enterprises and it is very large. It has its equivalents of butter mountains with no bread. The state health minister and premier are joint chief executives of a multi-billion-dollar enterprise and have no chance of understanding it. Every citizen has an interest in it. It is therefore highly political and impossible to administer. Absolute central control is the perceived solution but good health department policy guarantees only political wrath. Some powerful group will be upset.

As a politically run enterprise the state health system is full of inequity. The large city hospitals are a comfort to the 70 per cent to 80 per cent of the population within easy access and have great political power. Accessible services should be based in suburban hospitals but they wither. Provincial and rural hospitals stand little chance. Aboriginal health care is even more politicised and unfair. It attracts many studies but few salaries for standard Australian caregivers: general practitioners, specialists and nurses. Where the medical market is in play it is distorted by heavy and perverse federal government incentives. The federal Government's Medicare encourages turnover by subsidising every transaction so demand is high. There is no attempt at fair distribution. There is no incentive for doctors to take a share of the hard work in public hospitals and little incentive to work in rural and outer suburban areas.

Medicare reinforces public perception of value in scans and interventional procedures. Medicare will subsidise the placement of a stent in a coronary artery by $1500. The more time-consuming specialist assessment of a complex frail medical patient with multiple systems in disorder attracts $111. It is hardly surprising that the thinkers are thin on the ground, overworked and politically weak. Envy is strong in a system where no one knows what they have paid for so assumes they have paid for everything medically possible.

So what would a system that took these factors into its design look like? The two basic requirements of a health system in Australia are safety and universal coverage. Ensuring these is the rightful place of government. Provision of health services perhaps is not.

Efficiency and fairness have so far eluded government services in most consumer fields. Government's role in safety would be similar to its role in the aviation industry. A bad record would be as commercially harmful in the health industry as it is for airlines. There would be no more indiscriminate cost-cutting.

Universal coverage could be achieved by distributing health tax dollars to the individual, who would be obliged to choose a licensed health insurer as they now choose a superannuation fund or local member of parliament. The health tax dollars from those who did not choose could be allocated on rota to the competing funds. Level of cover available for the health tax dollar would be spelled out. Prolonged good health would advantage the fund through continued premiums. A healthy lifestyle would advantage the citizen financially through bargaining power for level of cover. Extra cover could be bought.

Transparent fairness would take a lot of the politics out of health. The electorate may well agree to much higher funding than at present if they knew it would be used efficiently for health care. A new system would recognise the market for medical care but open it up to competition. Nurses could learn and demonstrate competence in many procedures such as endoscopy of the throat, lungs, gut, joints and bladder. Radiographers could demonstrate competence in interpreting X-rays and scans as well as taking pictures. The chief marketing tool of doctors would then properly be their breadth and depth of training and wisdom in making complex decisions.

Government licensing power could no longer be ceded to parties that could take market advantage, such as the colleges. Hospitals could be commercial enterprises or they could be community-run. The latter would allow citizens to be more involved and encourage local philanthropy. The introduction of a new system could be piecemeal. A functional provincial area with an easily defined population may be a good place to start.


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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