Australian Health Care System - Report Example

RUNNING HEAD: AUSTRALIAN HEALTH CARE SYSTEM Australian Health Care System [The Writer’s name] [The name of the Institution] Australian Health Care System Introduction The past decade of conservative government in Australia has seen a seismic shift in a number of key public policy areas, most notably workplace relations, immigration and taxation. The government has used the mandate of four election victories to effectively shape its reform agenda. With over 60% of Australians believing that the Howard government will be returned for a fifth term in office there may even be scope for more change. (Craven, 2005) Amidst all of this one must ask—whither health? One of the great paradoxes of Australian public policy is that the health sector, arguably most in need of reform, is the least likely to receive it. You don't need to be a brain surgeon to understand a politician's philosophy over health care reform. Touch health in any major way and carry the risk of being branded as an enemy of healthcare. In fact healthcare, the great political symbol of universal health care, has so much political inertia attached to it that meaningful reform to any sector of the health system is made difficult. This is now creating a system that is less universal. Australia's strong showing against other OECD nations in a number of health indicators belies growing health inequalities, particularly for those living in rural and regional Australia and those without private health insurance. The increase in health spending (5.4% per year over ten years) (OECD, 2004) has not led to corresponding improvements in some of our most intractable health problems. Reform is needed in a wide range of areas, but for many health commentators one of the key obstacles in the way of reform is the relationship between Commonwealth and state governments in the delivery of health care. The need for greater cooperation in the delivery of healthcare was one of the key areas for reform at the Council of Australian Governments (CoAG) meeting this year as the Commonwealth government extended funding olive branches in key areas such as mental health, aged care and disease prevention. Efficiency The public hospitals we know today, and their relationship to general practice, are based on an antiquated structure known as 'hierarchical regionalism'. In the 1950s the tertiary hospital formed the backbone of medicine in terms of care delivery, training and research, whereas general practice was in its infancy. (Hollander, 2006) Infectious disease was still a major cause of morbidity and if hospitalization was required it was for severe, acute illness or surgery, not the chronic diseases we see today. The position of the public hospital has changed little but the landscape of medicine is vastly different. What is needed now is a strong focus on primary care and preventive medicine, sufficient GPs to provide long term care plans for the chronically ill and high quality residential aged care facilities that can care for the elderly. Public hospitals cannot adequately provide these services. Their focus is on throughput, an overwhelming desire to discharge patients in the shortest possible time to make space for overcrowded emergency rooms. They are not the best places for rehabilitation of the elderly and yet at any one time between 800 to 2000 Australians are waiting in hospital beds for aged care services. (Craven, 2005) There is no evidence that such a delegation would reduce hospital quality. Indeed, quality might actually be enhanced: in the absence of a direct federal role in ensuring hospital quality, states would receive considerable political pressure to assume a more active role in monitoring hospitals for licensing purposes. Australia, whose government and healthcare system are largely similar to America's, seems to have had positive results from delegating this regulatory function to its states. And American healthcare consumers are in dire need of some positive news. They cost millions of dollars in hospitalisation of Australians with chronic disease yet play absolutely no part in the prevention of those same diseases. In political terms state governments in Australia have no incentive to change the way public hospitals work. This is due in part to public and media perceptions of the 'health care crisis' which is vastly different to that of clinicians and bureaucrats. It is indisputable that investing in preventive medicine in political terms state governments in Australia have no incentive to change the way public hospitals work. (Si D, 2007) To avoid the complications of diabetes, obesity and smoking could save large amounts of money. The equations less obesity = less hip and knee replacements or less diabetes = less vascular disease seem so simple as to defy description, but public attention is on hospital waiting times for elective surgery or emergency department catastrophes. In other words, media inspection is on the act of health's major and least well-organized spenders, the community hospital. It's no shocking then that when voting time comes about the states start to bleed profits into more emergency sector beds or building a new district hospital. New South Wales is the best example, where any attempts to close or merge district hospitals have been met with stiff community opposition. (Craven, 2005) While it may be good public policy to divert funds away from expensive hospital care, the political imperative for state governments results in spiraling health costs. Funding not following the patient Shifting funding to preventive medicine and primary care and away from public hospitals is made even more difficult by the unclear division of responsibility that federalism has created. For years emergency departments suffered from a high number of non-acute presentations that could be dealt with by a general practitioner, however it is only recently that the Commonwealth has agreed to fund after-hours GP (General Practitioner) services close to hospital emergency departments to ease this pressure. The transfer of information between public hospitals and GPs is hampered by a reliance on antiquated, non-integrated information technology systems. (Podger, 2006) There are countless other examples of public hospital problems whose solutions lie in areas outside state jurisdiction. Andrew Podger, former health adviser to the Howard government, has described this as 'allocate inefficiency', that is, the 'balance of funding between functional areas is not giving the best value, and the inability to shift resources between the functional areas at local or regional areas is reducing the effectiveness of the system'." (Podger, 2006) Funds cannot easily follow a patient in their journey through the health system. For example, consider a diabetic patient who has their GP visits and drugs paid for by the Commonwealth. If he or she presents to the emergency department the cost moves to the state. The state hospital invariably uses older IT systems that prevent transfer of information on admission or discharge. On discharge the patient needs community nursing services (paid for by the state) and an outpatient visit which, though being at the same hospital they were admitted, is covered by the Commonwealth. In a few years the patient becomes infirm and requires a 'hostel in the home' package (contracted to independent providers and paid for by either the state or Commonwealth). The patient has crossed and re-crossed service boundaries several times and will continue to do so during their journey through the system. Australian Health Care System Vs United States When comparing Australia and the United States, similarities outweigh the differences. Similarities include geographic size, major language spoken, and colonial history as a repository for prisoners from the United Kingdom, major religions, culture, and economic, political, and legal systems. Both countries have a long history of extensive immigration. Living standards are comparable, although per capita gross national product is almost one-third higher in the United States (Hollander, 2006). Healthcare's benefits are somewhat less extensive than the norm for American private insurance (though perhaps, as healthcare adds a drug benefit and private employers reduce theirs, the gap will narrow). Other countries' coverage also tends to be more extensive. A number of countries only cover pharmaceuticals for some populations, but even then, as in the Australia., coverage for the elderly population tends to be more extensive than healthcare's promised drug coverage for U.S. elders. (White, 2004) Many countries have meaningful cost-sharing whereby the patient pays a portion of the bill; what’s truly abnormal is not the ostensible 20-percent co-payment under parts of healthcare but the fact that U.S. prices are so high and providers are allowed to game some rates, effectively raising the amount paid by the consumer. (Hollander, 2006) Access to Health Care In Australia, there has been a dismantling of what was thought to be "the unique Australian settlement", involving restrictions on social expenditures, the development of market-like approaches, the vilification of dependence and the assertion of the obligations of people who access social welfare. As with a number of countries around the world, Australia is looking at American care management strategies to assist in containing costs and improving access to services. And, predictably, in the US, the recent programme of welfare reform represents a move even further away from a sense of community responsibility for responding to social needs. Other major differences include health and welfare systems. Universal health care in Australia is associated with excellent health outcomes from relatively modest inputs, while the United States has less impressive outcomes despite one-third higher inputs. (White, 2004) Extreme poverty is rare in Australia outside aboriginal populations. By creating care management programs within centralized call centers, nurses can monitor the progress of several patients concurrently and have access to scripts that assist in dealing with such issues. Australia provides some important lessons and exciting opportunities for American healthcare companies. (Ricketts, 2005) Already the developments in Australia are influencing neighboring New Zealand, where the government is entertaining bids for a medical call center service organized around the capabilities of American software systems, and utilizing the same demand management principles currently developed in Australia and well rooted in the American managed care model. The United States has a higher proportion of citizens of color, and a history of slavery. The proportion of citizens of color and the multiplicity of the Australian population has engorged significantly in recent years and is now considerable. The 1991 Australian census identified 22.3% of the population at that time as having been born overseas and 12.9% as having been born in non-English speaking countries. (Podger, 2006) The United States is one of the few industrialized nations that do not offer universal admission to health services; thus it may come as no surprise that the development of a government-sponsored program limited to even the aged and disabled population met with great resistance. In fact, h, originally conceived of in 1958 as a program to provide health services for the aged population, was regarded as a liberal compromise that stemmed from repeated, failed attempts to pass national health insurance legislation, efforts that had gone on for half a century. (Podger, 2006) To accommodate the American Hospital Association (AHA), which had resisted the enactment of such a program, congressional sponsors expressed a willingness to surrender direct government control over program payments to fiscal intermediaries. Thus the healthcare law, as finally enacted, permitted a hospital to nominate a "public or private agency or organization" from which to receive payments, instead of dealing directly with the federal government. This permitted hospitals to deal with Blue Cross plans, which had originally been established to suit hospital interests. (White, 2004) Likewise, later versions of the healthcare legislation contemplated hospital quality control through the provider controlled Joint Commission on the Accreditation of Hospitals (JCAH). (White, 2004) Although proponents of national health insurance have been more accomplished in Australia than in the United States, things did not start that way. By the terms of the Commonwealth Constitution, any powers not specifically set aside for the federal government fit in to the states. At the time of Australia's federation, in 1901, each of its states already had a well-established and reasonably comprehensive health system of its own. (Condon, 2001) The Constitution remained largely silent on the subject, allowing responsibility for healthcare provision to remain with the states. (The U.S. adopted social-insurance principles for pensions in advance of the other English-speaking countries. Australia has a fairly generous basic pension and a plausible mandatory defined-contribution plan on top of that, but the country never adopted a further defined benefit-plan (White, 2004). Equity While the Federal Government is responsible for the overall distribution of a health budget equivalent to $30 billion, the bulk of this money is administered by the various state governments for provision of hospital- and community-based care. (Bourke, 2004) Payment for primary care services, specialist outpatient services and drags are administered directly by the federal government via the Medicare Benefits Fund and Pharmaceutical Benefits Services. Both are uncapped and have rising costs versus the domestic Consumer Price Index. (Ricketts, 2005) This separation in funding between the state and federal health system has led to significant cost shifting within the Australian healthcare system. In general, policy makers outside the United States do not see healthcare for the elderly population per se as a significant policy issue. They are much more concerned with the costs of pensions, with the cost of healthcare for their people of all ages (for which they do not exactly find solutions in the U.S.), and with the underlying economics of demographic stress (OECD, 2004) Do we require a rethink of the entire structure and move to greater Commonwealth control? Any attempt to redistribute funds to benefit the patient is rendered difficult and time-consuming (if not impossible) because of the artificial demarcation of program boundaries resulting from multiple funders. But what happened to the benefits of federalism? Can the current system be manipulated to enhance its benefits, preserve the sanctity of states’ rights as in the case of competition policy? Or do we require a rethink of the entire structure and move to greater Commonwealth control? Conclusion Over the past decade there have been calls by respected health academics for wide ranging reforms of our health system. This has included an overhaul of state and federal relations as they relate to health care, and some have suggested that the Commonwealth take over full responsibility for funding health. Any large-scale restructure of health funding arrangements would not only affect the health system, but have more far reaching implications in terms of balance of power and may even call into question the function of the states in Australia. Given these issues caution should be exercised in the reform of federal-state relations in health. Radical change, that is, the states relinquishing their control over health, would see the loss of the considerable advantages of federalism. There may be a loss of policy diversity and ability to experiment, fewer checks on central government with regard to medical ethics and a possible decrease in responsiveness to needs of voters. Radical change may also be so unpalatable to the states that they refuse any type of reform at all. The Council, consisting of health experts (academics and clinicians) with federal and state health bureaucrats in an advisory role would be able to set national practice standards and ensure compliance with national guidelines by making funding contingent upon their achievement. Improved reporting and accountability to the Council would accompany the flow of funds from Commonwealth to states. (Epping-Jordan; Pruitt; Bengoa; Wagner, 2004) The total amount of funding for hospitals would be determined using the same model across all states (there has been more than ample time since the introduction of casemix funding in the early 1990s to develop a uniform structure between states). (Hollander, 2006) The states have failed to deliver in policy areas where they are supposed to hold the advantage, most notably in rural and regional health care, and are going to have to accept an increased degree of Commonwealth intervention over the coming years to resolve the problems of increased public hospital expenditure and poor distribution of resources. (Bodenheimer, 2002) However our federal system still has much to offer health and history has shown that cooperative federalism can assist rather than detract from reform of a sector. References Bodenheimer T, Wagner EH, Grumbach K: (2002) Improving primary care for patients with chronic illness. JAMA, 288:1775-1779. Bourke L, Sheridan C, Russell U, Jones G, DeWitt D, Liaw S-T. Developing a conceptual understanding of rural health practice. Australian Journal of Rural Health 2004; 12: 181–186. Condon J, Warman G, Arnold L: (2001) The health and welfare of Territorians. Darwin: Epidemiology Branch, Territory Health Services. Craven Creg, (2005) 'Federalism and the States of Reality', Policy 1\:1, pp 3-9. Epping-Jordan JE, Pruitt SD, Bengoa R, Wagner EH: (2004) Improving the quality of health care for chronic conditions. Qual Saf Health Care, 13:299-305. Hollander Robyn, (2006) 'National Competition Policy, Regulatory Reform and Australian Federalism', Australian Journal of Public Administration 65:2, pp 33-47. Organisation for Economic Co-operation and Development (OECD). Council at Ministerial Level (OECD Council). 2004. Strengthening Growth and Public Finances in an Era of Demographic Change, C/MIN (2004)5 (May 7). Podger Andrew, 'A Model Health System for Australia', Inaugural Menzies Health Policy Lecture at the Menzies Centre for Health Policy, March 2006, http://www.ahpi.health.usyd.edu. Ricketts TC. Workforce issues in rural areas: a focus on policy equity. American Journal of Public Health 2005; 95: 42–48. Si D, Bailie RS, Dowden M, O'donoghue L, Connors C, Robinson GW, Cunningham J, Condon J, Weeramanthri T: (2007) Delivery of preventive health services to Indigenous adults: response to a systems-oriented primary care quality improvement intervention. Med J Aust, 187:453-457. White, J. 2004. "(How) Is Aging a Health Policy Problem?" Tale Journal of Health Policy, Law and Ethics 4(1): 47-68. Read More