Health policies, funding and Federalism: the opportunity to move from disintegrated healthcare to integrated health policy and services

Rosemary Calder
Director, Health Policy and Research, Mitchell Institute for Health and Education
Thursday, July 16, 2015

Australia’s health policies, funding and service models are failing about one quarter of the population. Preventable diseases and chronic conditions – like diabetes, heart disease and stroke – affect a substantial and growing proportion of people living in Australia and this lies at the heart of the current health cost discussion.

A large part of the problem is that funding and service models are not geared towards preventative healthcare. Indeed, our lack of policy attention to this capacity means that access to preventative care is an optional extra, often limited to those with the financial and social capacities to access strategies that improve or maintain their good health.

If we had maintained this same attitude towards the most prevalent health conditions of the past (infectious diseases), we would not have the economy or nation we now have today. It is hard to imagine what life would be like if Australia, along with other countries, had not established the highly successful polio prevention program that commenced in the 1950s. Even more recently, with a resurgence of infectious diseases such as measles and whooping cough, we have effective population protection strategies and high risk response systems in place that work effectively before, after, the disease becomes an epidemic.

The idea that health policy now should have a strong focus on the contemporary health challenge of chronic disease prevention and management is not new, and it has been a focus of both current and previous Australian governments who have acknowledged it as a major challenge. But the complexity of our federated health arrangements – in policy, funding and service delivery – along with rising health costs, the ageing of the population and the growing impact of preventable chronic diseases, altogether mean that unless we make significant changes, the costs of preventable illness and resulting healthcare demand will continue to be a blinding headache for governments and individuals alike.

Recent discussions around federation reform provide an opportunity to articulate the measures that are needed to enable our healthcare arrangements to move towards a high-functioning system. Interestingly, the 2014 Commonwealth Budget included an intention to establish a national health productivity and performance commission. Little if anything has been said about this by the Commonwealth since, which suggests that it is no longer being perused, despite the opportunities it presents.

Lessons can be learned from the establishment of the Hospital and Health Services Commission in 1973, which was charged with creating a comprehensive approach to healthcare policy and delivery at the local and national level. In its five years of operation, it led to major changes in the planning and delivery of services across the healthcare spectrum, including the first Medibank program – a cooperative arrangement with the states and territories that, combined with the Medical Benefits Scheme and the Pharmaceutical Benefits Scheme, provided national comprehensive universal insurance and access to public hospital care.

The proposition to consider the establishment, in consultation with the states and territories, of a new commission for national health productivity and performance makes sense. Since these previous efforts at creating a nationalised health system, there has been a persistent muddling of governments’ responsibilities for service provision, and the complex cobweb of payments between different levels of government and to service providers – a continuous source of contention and confusion for healthcare consumers and policymakers alike.

A contemporary national commission could – and should – be established to provide a non-partisan, multilateral platform for shared responsibility and accountability in the development and implementation of coherent and consistent health policy, with a focus on national interest, encompassing, but not limited by, sectional and jurisdictional interests. This commission should comprise both Commonwealth and jurisdictional governments as members, with independent experts from the health sector including consumers.

Its core mission should be to provide policy advice to all governments on the provision of comprehensive and coordinated health services for the nation. Successful achievement of this goal would require the commission to have the authority and capacity to influence the structural and funding arrangements for acute and primary health services that create – or fail to address – barriers to coordinated, clinically effective and efficient healthcare; that is, healthcare delivered in the most cost-effective setting, particularly for chronic disease.

It also important for such a commission to have a mandate to work with private health insurers and private health providers to enable it to advise on the implementation of comprehensive, clinically and cost effective healthcare arrangements for people with chronic and complex healthcare needs. The lack of direct engagement between primary care services, particularly GP services, and specialist consultant care, as well as acute care services, has been one of the major barriers to effective and coordinated service provision for chronic health conditions, for both consumers and for clinicians.

A national – federated – strategy could, over time, encompass other essential elements of a national health system as well. For example, national standards and criteria for the provision of individual electronic health records for implementation throughout Australian health services, as well as health workforce planning and development. The latter would logically fit within the purview of a commission focused on performance and productivity. Therefore, this commission should have a mandate to work with education agencies and authorities to develop health workforce education and policies to meet the population healthcare needs for increased primary and community care service capacity.

To function effectively and eliminate duplication of effort, the commission would need to work closely with the existing national endeavours towards effective federalism and the goal of the national interest, namely the AIHW and national health and welfare data and information, and the national registration of qualified health professionals.

With the quality of Australia’s health services – and the health professionals who deliver them –  increasingly under stress, reform of the federation could re-focus funding from a myopic attention to  healthcare to a broader attention to health; to prevention and early intervention services to reduce the risk of avoidable diseases; and, to optimal coordination of primary, community and acute care services for people with chronic diseases who require long term and complex management and for those needing high cost healthcare.

Health and education are critical to providing citizens with real opportunities for social and economic participation. Now is the time to drive for significant improvement to the leadership and governance of Australia’s healthcare system, to recognise and support the common-wealth that would be derived by better serving the health risks and needs of today’s and future citizens.