Universal health coverage Australian-style: if you’ve got the money, you are universally covered

Thursday, May 1, 2014

That the Commission of Audit has recognised the strengths of the Australian health system is gratifying.  The Commission is also to be commended for acknowledging the complexity of health care, the professionalism of the people who deliver health services, the essential role of government in supporting health services, and the necessity of universal health coverage for an affluent nation like Australia. It is also pleasing that the Commission has recognised the need for structural reform, in line with the Australian Healthcare and Hospital Association’s (AHHA) recommendation in its submission to the Commission.

“It is puzzling however that many of the Commission’s recommendations will do little to support such lofty principles, and much to undermine them, particularly via the initial incremental changes it proposes to the health system,” says Alison Verhoeven, AHHA Chief Executive.

“While the Commission makes much of the predicted increases in health expenditure it makes no recommendations that encourage a greater focus on health promotion and disease prevention, which are clearly an effective approach to reducing costs and improving the health of the community.

“It also appears likely that we are moving towards a two-tiered system of ‘haves and have-nots’ in health: the Government needs to keep in mind that a productive economy requires healthy workers.  It is in the interests of a healthy tax base that we have a healthy population, particularly, if as Government has signalled, it wants to keep people in the workforce for longer.

“The proposed opportunity for private health insurers to cover basic health services currently covered by Medicare will be a bonanza for the private health insurance industry, and will assist in driving up the value of Medibank Private.  But it is unlikely to do anything positive for the average Australian and certainly doesn’t align with the Commission’s rhetoric about the necessity of universal health coverage. In particular, the recommendation that higher income earners be required to insure for basic health services “in place of Medicare”, yet continue to pay a Medicare levy, appears to suggest they would pay to support a Medicare that they are not allowed to access and then be hit again with a premium to a private insurer. This proposal must fall into the major structural reform basket – it requires extensive discussion and public debate before any implementation.  The Abbott Government did not take this proposal to the electorate, and clearly has no electoral mandate for such radical change to the health system.

“As widely touted in the media over recent months, co-payments are recommended, albeit at a much greater cost of $15 for general patients and $5 for concession card holders, with a recommendation that the states implement co-payments in emergency departments for people triaged as categories 4 and 5.  These triage categories relate to urgency, not to appropriateness of treatment in an emergency department. A country that requires the injured and ill to present their credit card for payment in order to receive treatment in an emergency department is not a country that has universal health coverage. 

“With co-payments in both general practice and emergency departments, we are likely to see many Australians, particularly those with low incomes and with chronic disease, simply not seeking medical care until they are in the higher triage categories and requiring very high cost emergency care. The best value-for-money health systems internationally have large public components: Australians are already amongst the highest co-payers across theOECD.  Accepting the co-payment recommendations would be a very negative move by the Abbott Government.

“The AHHA supports the recommended review of the Medicare Benefits Schedule (MBS), but the proposal is not presented with any sense of urgency.  The time to act is right now.  A small amount of funding to establish a Choosing Wisely program in Australia, similar to that in place in the US and Canada, to look at both the MBS and the Pharmaceutical Benefits Scheme (PBS) would be a worthy investment in the budget on May 13.  It would deliver far greater dividends than charging everyone a co-payment for services, some of which might not be effective.

“The proposed introduction of new arrangements for funding the PBS within a set funding envelope that extends for a seven year cycle would assist with better management of costs in the pharmaceutical sector. However the proposed co-payment structure would add further financial pain on many Australians.

“The Commission has proposed the consolidation of the 22 existing health portfolio bodies and agencies into a National Health and Medical Research Institute, a Health Productivity and Performance Commission, with the remaining functions to be transferred to the Department of Health. It has also recommended that the functions of the COAG Reform Council be moved to the Productivity Commission.  On the basis that critical functions are maintained, the AHHA supports this rationalisation to bring an end to the proliferation of duplicated roles, and the unnecessary reporting burden from the states and territories to multiple bodies in the Commonwealth.

“The AHHA welcomes the Commission’s recommendation that the Minister for Health be tasked with developing options to reform Australia’s system of health care, with a report to the Prime Minister in 12 months’ time on progress and a preferred way forward. There are many aspects of the health system, its structure and funding, which are worthy of further exploration.  This includes integrated care, how regional level coordination of primary care might best be effected, public-private partnerships, contracting models, rationing and cost-benefit analysis for health programs. The AHHA looks forward to working with the Minister and the states and territories to progress these discussions,” says Ms Verhoeven.

The Australian Healthcare & Hospitals Association represents Australia’s largest group of health care providers in public hospitals, community and primary health sectors and advocates for universal high quality healthcare to benefit the whole community.

Media inquiries:

Alison Verhoeven, Chief Executive, Australian Healthcare and Hospitals Association 0403 282 501