Wednesday, November 8, 2017

Sorry, but Medicare needs to change

The apparent success of Labor's scare campaign on the Coalition's alleged plans to "privatise Medicare" at last year's election tells us many things – how much we care about the good performance of our healthcare system, how much we like the way healthcare is paid for under Medicare, and how suspicious we are of politicians' plans to change things.

But Medicare is showing its age. It was designed by health economists in the 1960s, implemented by Gough Whitlam in the 1970s, dismantled by Malcolm Fraser, then reinstalled by Hawke and Keating in the 1980s.

Our health has changed a lot since then. Whereas the system is designed to cope with acute illnesses – you catch a bug or have an accident, so you go to your GP, who fixes the problem or refers you to a specialist or, in the extreme, rushes you to hospital – these days we're more likely to suffer from chronic conditions, such as diabetes, mental illness, lung cancer or cardiovascular disease.

That's because higher living standards, improvements in public health and advances in medical technology have reduced the incidence of accidents and infectious diseases, leaving us living lives that are longer, but more anxious and overweight, while suffering from conditions that will stay with us until we drop off.

If you don't have a chronic illness yet, you probably will.

Trouble is, the ageing Medicare system isn't well-suited to this change. GPs are paid according to the number of patients they see for a few minutes – "fee for service".

They're not rewarded for helping patients change their behaviour in ways that prevent the onset of chronic diseases, nor for helping patients manage their conditions in ways that stop them getting worse over time, or needing to go to hospital.

As healthcare has become more expensive, it's clearer that visits to GPs and other frontline health professionals are relatively cheap, whereas visits to specialists are much dearer. Operations and stays in hospital are hugely expensive.

Get it? We could improve people's health and happiness and reduce expense if we made sure the "primary care" provided by GPs and others was as effective as possible in preventing and managing chronic conditions, reducing the need to call on specialists and hospitals.

All this is the thinking behind the Productivity Commission's advocacy of a "new policy model" that shifts tax changes, deregulation and privatisation onto the backburner, and shifts healthcare (and education and cities) to the forefront of economic reform.

The health system suffers from its division of responsibility between federal and state governments, with the states responsible for public hospitals and the feds for most of the rest.

Lack of co-ordination between the parts of the system generates much wasted time and money, not to mention inconvenience and frustration for patients.

So the commission wants a renewed effort to achieve an integrated system.

"The international and Australian experiences with integrated care indicate that, if properly implemented, it leads to gains in health outcomes for patients, improvements in the patient experience of care, reductions in costs, and improved job satisfaction for clinicians," the commission says.

The place for this integration to occur is at the local, regional level. There are about 30 regions in Australia. The commission wants regional health authorities to have freedom to modify national arrangements to suit local conditions.

Public hospitals have already been organised into "local hospital networks" but, after protracted disagreement between Labor and the Coalition, the feds are only now setting up private "primary health networks" contracted to co-ordinate patient care in their locality, including by working collaboratively with the local hospital network.

It's almost inevitable that big outfits like hospitals – but even doctors' surgeries – tend to be run for the convenience of the outfit, rather than the patient.

But the commission wants changes that encourage the system to focus on patients rather than suppliers.

"Patient-centred care gives prominence to the preferences, needs and values of consumers. In a better system, patients' time would be recognised. Patients would be given the information and power to be co-contributors to treatments and disease management," the commission says.

"Medical records would be owned by patients and they would be able to add comments. The commission sees such rights to data as a broad requirement across many public and private services. Where choice was feasible, it would be facilitated."

The digital age has largely eliminated the excuse for different parts of the system – including different doctors – not keeping each other fully informed, and doing so via the patient's own, digitised and portable medical record.

This idea isn't new, but doctors have been dragging their feet and governments need to renew their determination to make it happen.

Using fee-for-service as the main way of paying doctors encourages activity (more visits) whereas it would be better to reward outcomes – successful efforts at preventing chronic conditions or stopping people from needing to go to hospital.

Fee-for-service would continue under a regionally based integrated care model, but its role would diminish as primary health networks and local hospital networks found other ways to remunerate GPs for clinical outcomes.

Little of all this is new, and governments are unlikely to do it all next week. Rather, it's the commission setting priorities for economic reform in general, and healthcare in particular, and urging governments to get on with bringing it to pass.