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Medicare is fundamental to the health care of Australia

Medicare is fundamental to the health care of Australia Faculfyof Health Sciences, Universityof Queensland Now well into its third decade, the universal, Governmentfunded health scheme now called Medicare continues to be the subject of support and criticism. Introduced as Medibank in 1975 by Gough Whitlam, it was designed to be a universal insurance scheme providing free treatment in public hospitals, a significant rebate on doctor's fees based on a common fee schedule and the ability for participants to bulk-bill.To quote the 1987 Health Minister, Neil Blewett, "The Government has a clear responsibility to provide a mechanism which ensures access to health services on the basis of need rather than the capacity to pay, Medicare does just that. It is a health and insurance scheme based on universality of cover, equality of access and payment according to means."' In a civilised society (and I still consider Australia to be reasonably civilised), Governments have a responsibility to provide and control the vital services of health, education and the utilities.* (1 would probably now add to that information services). This is not to say that some elements of service provision in these areas might not be provided by the private sector, but the important thing is getting a balance and making sure that that balance provides the best opportunities for society as a whole. No Government since 1975 has been able to resist the opportunity of 'tinkering' in some way with the health ~ y s t e m Current concern is .~ particularly focused on the level of private health insurance in Australia, which has dropped significantly since the introduction of Medicare. It would be fair to say that Medicare has been extraordinarily successful, given its resources. It has played a major role in controlling burgeoning healthcare costs and, in particular, the blowout in costs of technology that have led the US to spend around i4% of the GDP on health care. This free enterprise system has led to some 40 million Americans being uninsured, to the unfettered abuse of health care technologies with little recourse to evidence-based practice or funding and now, to the development of control systems such as health maintenance organisations organised by the private insurance companies in an effort to reduce costs, with little emphasis on patient care. The problems with funding our health system are certainly not unique to Australia, but the system we have adopted has probably coped with these issues better than most. Bates and Linder-Pelz have outlined the health issues that are of concern to Governments in all developed nations and these include: the cost of health care and how to maintain it; the financing of health care; the organisation of health delivery services; the issue of providing equal access to health care for the whole population; and the mechanisms of ensuring that quality health services are maintained at acceptable levels, given significant financial constraints." Financial pressures on health care systems everywhere are likely to increase. These are related to the ageing of the population, with its associated increase in demand on services; increased use of technology; increased expectations of the community and, in particular, demands for more resources by health professionals and those pressure groups within the community; and an increase in the third-party financing of health care which can remove from the health professionals and patients, the restraint of COSt.5 Taylor and Salkeld6 have recently published a review of a major health outcome (Life Expectancy) in relation to health care expenditure. Their data (Table 1) clearly show that Australia is doing reasonably well in terms of a higher than average life Table 1: Life expectancy in relation to health expenditure (adapted from Taylor and Salkeld". Country Female life expectancy (1989-90) (Years) Public expenditure on health as a % of total health expenditure Total Health Expenditure as a % of GDP Japan Sweden Spain Australia Norway Germanv United states United Kingdom .___ New Zealand %rkey 1999 VOL. 23 NO. 4 AUSTRALIAN AND NEW ZEALAND JOURNAL OF PUBLIC HEALTH Editorials expectancy and only slightly higher than predicted health expenditure per capita. As they point out, we are doing this with less than 70% of health expenditure coming from public sources - lower than the majority of European nations and Canada. There are many issues that need to be debated relating to the health system and its financing. These include the fact that Medicare promotes a private system outside public hospitals in terms of access because it provides “public remuneration”’ a n 4 with a fee for service system, there is the opportunity for abuse. There are currently significant constraints on the funding for public hospitals and the funding system has perpetuated significant differences in remuneration across health professions. Certain sectors of the community and, in particular, Indigenous Australians, still have an appalling morbidity and an average life span significantly lower than the rest of the population. Some of these issues are due to the fact that there are few doctors in isolated communities but, even in urban areas, groups such as adolescents are not provided with optimum health care.* A recent study in Victoria identified the lack of availability of individual Medicare cards to adolescents from the age of 16 and general practitioner concern relating to use of prolonged consultations as significant barriers to their providing adequate care for adolescents.’ The number and distribution of medical practitioners is again an issue that might be addressed through the Medicare system. Differential rebates to encourage doctors to move to rural areas have been suggested in the past although attracting and maintaining rural practitioners is a much bigger issue than financial incentives alone. Opportunities for rural practitioners to consult with specialists and other colleagues using ‘telehealth’ networks and the Medicare rebate system might be another way of supporting doctors in country areas. Better use ofnurse practitioners and other non-medics as part of a rural health care team would also be of significant benefit. The number of medical graduates inAustralia has been rigidly controlled in the past decade on the premise that increasing doctor numbers will only lead to an increase in costs. The medical workforce has changed dramatically with an increasing number of females in the system and a decreasing willingness on the part of doctors to work 60 to 80 hours a week.There is also increasing demand on the system brought on by the ageing population and increased community expectations. At a time when the United Kingdom has just announced an increase of 1,000 medical student places with some 10 new medical schools, the most recent data from AHMAC is suggesting that Australia might require an increase in student numbers as well. Although the Government has not made a decision on this yet, it certainly has the opportunity with the opening of the new James Cook Medical School in north Queensland. It is appropriate that there should be some changes to the financing of health care in Australia, but these need to be data driven rather than ideologically driven. At the end of the day, the Medicare system is in the main fulfilling the principles for which it was introduced. However, it does need a higher level of funding. It is interesting that the percentage of GDP spent on health in this country has varied little over the past 20 years, despite the enormous increase in our ability to help patients with disease, to provide them with advice to prevent them getting disease and with a significant increase in the aged population who require medical services. Governments will always have a dilemma in determining the funding priorities whether it is for education, defence, health, transport or other important areas. It does seem however that in the post-cold war era a cogent argument could be mounted to support a 1% increase in the health care budget to the detriment of areas such as defence. Within the health care budget, such issues as the fee structure might be tackled - the current relative values study does not seem to have produced very much and yet it seems hard to justify a fee structure which remunerates the ‘considered opinion’ that an operation is not required at a fraction of the cost of the said operation which often takes a similar amount of time. At some stage the inequities between the funding of the considered opinion and the procedure must be addressed. There is a need for increased funding ofhealth promotion, health education and allied health professionals through the Medicare system which might be supplemented (particularly in the area of prevention and promotion) by hypothecated taxes on tobacco, alcohol and gambling. Medicare could also fund trials ofnew forms of health delivery in much the same way as the Pharmaceutical Benefits Advisory Committee has occasionally funded trials of new drugs. We live in a world of evidence-based practice where, for many conditions, evidence-based clinical guidelines have or can be produced. The Medicare funding system could be used to encourage the use of best practice guidelines or even not fund those activities which are clearly not evidence-based. While we continue with two health systems (State and Federal) cost-shifting will develop into an ‘art form’. This promotes not only duplication of services but in’appropriate practices as State institutions shift costs onto the Federal Government and private insurance funds. This was shown clearly recently by Kinlay in reviewing the cost-effectiveness of coronary angioplasty versus medical treatment. This study demonstrated that while coronary angioplasty was a slightly higher cost than medical treatment, it was more cost-effective but that the financial interests of the hospital system were best served by limiting angioplasty or restricting it to privately insured patients. The Pharmaceutical Benefits Advisory Committee has adopted cost-effectiveness data as a major determinant in the provision of pharmaceutical subsidies.The Medicare system should also adopt these cost-effectiveness principles in reviewing its funding for services but also needs to look at these in the context of the potential for cost-shifting. It seems clear that Australia will continue to run a publicly funded Medicare system and a private health system. There is no reason why these cannot co-exist. If the level of private insurance is too low then it might be increased by reducing the income level at which a higher Medicare rebate is charged if private health 1999 VOL. 23 NO. 4 AUSTRALIAN AND NEW ZEALAND JOURNAL OF PUBLIC HEALTH -_ cover is not taken out. Private hospitals can relieve pressure on the public hospital system, and be used very effectively as teaching institutions.1° The public health system, however, must be funded at a greater level direct from the public purse. Any system that requires a significant co-payment for hospital outpatient or general practitioner attendance will target those under financial disadvantage and act against the principles on which Medicare is based. As O’Dea and Kilham have argued recently, there is a need to have a wide-ranging debate about health care funding in this country, but whatever that debate is and however it is generated, we should not forget that Medicare has served us well and must be retained to provide those important principles of equity of access, universality of cover and payment according to means. Editorials http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Australian and New Zealand Journal of Public Health Wiley

Medicare is fundamental to the health care of Australia

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References (17)

Publisher
Wiley
Copyright
Copyright © 1999 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1326-0200
eISSN
1753-6405
DOI
10.1111/j.1467-842X.1999.tb01271.x
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Abstract

Faculfyof Health Sciences, Universityof Queensland Now well into its third decade, the universal, Governmentfunded health scheme now called Medicare continues to be the subject of support and criticism. Introduced as Medibank in 1975 by Gough Whitlam, it was designed to be a universal insurance scheme providing free treatment in public hospitals, a significant rebate on doctor's fees based on a common fee schedule and the ability for participants to bulk-bill.To quote the 1987 Health Minister, Neil Blewett, "The Government has a clear responsibility to provide a mechanism which ensures access to health services on the basis of need rather than the capacity to pay, Medicare does just that. It is a health and insurance scheme based on universality of cover, equality of access and payment according to means."' In a civilised society (and I still consider Australia to be reasonably civilised), Governments have a responsibility to provide and control the vital services of health, education and the utilities.* (1 would probably now add to that information services). This is not to say that some elements of service provision in these areas might not be provided by the private sector, but the important thing is getting a balance and making sure that that balance provides the best opportunities for society as a whole. No Government since 1975 has been able to resist the opportunity of 'tinkering' in some way with the health ~ y s t e m Current concern is .~ particularly focused on the level of private health insurance in Australia, which has dropped significantly since the introduction of Medicare. It would be fair to say that Medicare has been extraordinarily successful, given its resources. It has played a major role in controlling burgeoning healthcare costs and, in particular, the blowout in costs of technology that have led the US to spend around i4% of the GDP on health care. This free enterprise system has led to some 40 million Americans being uninsured, to the unfettered abuse of health care technologies with little recourse to evidence-based practice or funding and now, to the development of control systems such as health maintenance organisations organised by the private insurance companies in an effort to reduce costs, with little emphasis on patient care. The problems with funding our health system are certainly not unique to Australia, but the system we have adopted has probably coped with these issues better than most. Bates and Linder-Pelz have outlined the health issues that are of concern to Governments in all developed nations and these include: the cost of health care and how to maintain it; the financing of health care; the organisation of health delivery services; the issue of providing equal access to health care for the whole population; and the mechanisms of ensuring that quality health services are maintained at acceptable levels, given significant financial constraints." Financial pressures on health care systems everywhere are likely to increase. These are related to the ageing of the population, with its associated increase in demand on services; increased use of technology; increased expectations of the community and, in particular, demands for more resources by health professionals and those pressure groups within the community; and an increase in the third-party financing of health care which can remove from the health professionals and patients, the restraint of COSt.5 Taylor and Salkeld6 have recently published a review of a major health outcome (Life Expectancy) in relation to health care expenditure. Their data (Table 1) clearly show that Australia is doing reasonably well in terms of a higher than average life Table 1: Life expectancy in relation to health expenditure (adapted from Taylor and Salkeld". Country Female life expectancy (1989-90) (Years) Public expenditure on health as a % of total health expenditure Total Health Expenditure as a % of GDP Japan Sweden Spain Australia Norway Germanv United states United Kingdom .___ New Zealand %rkey 1999 VOL. 23 NO. 4 AUSTRALIAN AND NEW ZEALAND JOURNAL OF PUBLIC HEALTH Editorials expectancy and only slightly higher than predicted health expenditure per capita. As they point out, we are doing this with less than 70% of health expenditure coming from public sources - lower than the majority of European nations and Canada. There are many issues that need to be debated relating to the health system and its financing. These include the fact that Medicare promotes a private system outside public hospitals in terms of access because it provides “public remuneration”’ a n 4 with a fee for service system, there is the opportunity for abuse. There are currently significant constraints on the funding for public hospitals and the funding system has perpetuated significant differences in remuneration across health professions. Certain sectors of the community and, in particular, Indigenous Australians, still have an appalling morbidity and an average life span significantly lower than the rest of the population. Some of these issues are due to the fact that there are few doctors in isolated communities but, even in urban areas, groups such as adolescents are not provided with optimum health care.* A recent study in Victoria identified the lack of availability of individual Medicare cards to adolescents from the age of 16 and general practitioner concern relating to use of prolonged consultations as significant barriers to their providing adequate care for adolescents.’ The number and distribution of medical practitioners is again an issue that might be addressed through the Medicare system. Differential rebates to encourage doctors to move to rural areas have been suggested in the past although attracting and maintaining rural practitioners is a much bigger issue than financial incentives alone. Opportunities for rural practitioners to consult with specialists and other colleagues using ‘telehealth’ networks and the Medicare rebate system might be another way of supporting doctors in country areas. Better use ofnurse practitioners and other non-medics as part of a rural health care team would also be of significant benefit. The number of medical graduates inAustralia has been rigidly controlled in the past decade on the premise that increasing doctor numbers will only lead to an increase in costs. The medical workforce has changed dramatically with an increasing number of females in the system and a decreasing willingness on the part of doctors to work 60 to 80 hours a week.There is also increasing demand on the system brought on by the ageing population and increased community expectations. At a time when the United Kingdom has just announced an increase of 1,000 medical student places with some 10 new medical schools, the most recent data from AHMAC is suggesting that Australia might require an increase in student numbers as well. Although the Government has not made a decision on this yet, it certainly has the opportunity with the opening of the new James Cook Medical School in north Queensland. It is appropriate that there should be some changes to the financing of health care in Australia, but these need to be data driven rather than ideologically driven. At the end of the day, the Medicare system is in the main fulfilling the principles for which it was introduced. However, it does need a higher level of funding. It is interesting that the percentage of GDP spent on health in this country has varied little over the past 20 years, despite the enormous increase in our ability to help patients with disease, to provide them with advice to prevent them getting disease and with a significant increase in the aged population who require medical services. Governments will always have a dilemma in determining the funding priorities whether it is for education, defence, health, transport or other important areas. It does seem however that in the post-cold war era a cogent argument could be mounted to support a 1% increase in the health care budget to the detriment of areas such as defence. Within the health care budget, such issues as the fee structure might be tackled - the current relative values study does not seem to have produced very much and yet it seems hard to justify a fee structure which remunerates the ‘considered opinion’ that an operation is not required at a fraction of the cost of the said operation which often takes a similar amount of time. At some stage the inequities between the funding of the considered opinion and the procedure must be addressed. There is a need for increased funding ofhealth promotion, health education and allied health professionals through the Medicare system which might be supplemented (particularly in the area of prevention and promotion) by hypothecated taxes on tobacco, alcohol and gambling. Medicare could also fund trials ofnew forms of health delivery in much the same way as the Pharmaceutical Benefits Advisory Committee has occasionally funded trials of new drugs. We live in a world of evidence-based practice where, for many conditions, evidence-based clinical guidelines have or can be produced. The Medicare funding system could be used to encourage the use of best practice guidelines or even not fund those activities which are clearly not evidence-based. While we continue with two health systems (State and Federal) cost-shifting will develop into an ‘art form’. This promotes not only duplication of services but in’appropriate practices as State institutions shift costs onto the Federal Government and private insurance funds. This was shown clearly recently by Kinlay in reviewing the cost-effectiveness of coronary angioplasty versus medical treatment. This study demonstrated that while coronary angioplasty was a slightly higher cost than medical treatment, it was more cost-effective but that the financial interests of the hospital system were best served by limiting angioplasty or restricting it to privately insured patients. The Pharmaceutical Benefits Advisory Committee has adopted cost-effectiveness data as a major determinant in the provision of pharmaceutical subsidies.The Medicare system should also adopt these cost-effectiveness principles in reviewing its funding for services but also needs to look at these in the context of the potential for cost-shifting. It seems clear that Australia will continue to run a publicly funded Medicare system and a private health system. There is no reason why these cannot co-exist. If the level of private insurance is too low then it might be increased by reducing the income level at which a higher Medicare rebate is charged if private health 1999 VOL. 23 NO. 4 AUSTRALIAN AND NEW ZEALAND JOURNAL OF PUBLIC HEALTH -_ cover is not taken out. Private hospitals can relieve pressure on the public hospital system, and be used very effectively as teaching institutions.1° The public health system, however, must be funded at a greater level direct from the public purse. Any system that requires a significant co-payment for hospital outpatient or general practitioner attendance will target those under financial disadvantage and act against the principles on which Medicare is based. As O’Dea and Kilham have argued recently, there is a need to have a wide-ranging debate about health care funding in this country, but whatever that debate is and however it is generated, we should not forget that Medicare has served us well and must be retained to provide those important principles of equity of access, universality of cover and payment according to means. Editorials

Journal

Australian and New Zealand Journal of Public Health – Wiley

Published: Aug 1, 1999

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