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HEALTH SYSTEM REFORM REVISITED

HEALTH SYSTEM REFORM REVISITED. ANDREW PODGER 4 May 2007. 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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HEALTH SYSTEM REFORM REVISITED

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  1. HEALTH SYSTEM REFORMREVISITED ANDREW PODGER 4 May 2007

  2. 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

  3. Assessment of Australia’s 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. Model for Single Commonwealth Funder Health System

  9. Single Funder Model

  10. 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.

  11. 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)

  12. Estimated Hospital Costs per person per year by Funding Source, 2002‑03

  13. 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

  14. 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

  15. Conclusion • Australia’s 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

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