When it was established in 1974, Medicare funded the way health services were delivered at that time.
That delivery system has not changed much since then.
After 50 years, the way we deliver health care needs substantial reform: Our health delivery system is a mess.
Too often we are sidetracked about more funding for Medicare, and we neglect the core problem of how health services are efficiently and equitably delivered.
It is important that the Strengthening Medicare Taskforce appointed by the government focuses on the delivery problem.
But there are two major problems we must face at the outset.
First, the Department of Health and Ageing is not up to the job of real reform. That has been the case for a long time. It is worse now because former health minister Greg Hunt politicised almost everything.
Second, we need to acknowledge the power of providers who deliver health services – doctors, private hospitals, private health insurance funds and pharmacists – who through their pernicious lobbying are able to frustrate governments time and time again.
The great risk today is that with the current review the government will be seduced by lobby groups to provide more money to do the same things as before. Government ministers give way time and time again.
These lobby groups led an unscrupulous campaign against Gough Whitlam and Medicare 50 years ago. They are still at it today if their power is challenged.
Six steps to reform
First, fee-for-service (FFS) by doctors promotes an excessive volume of services – turn-style medicine! The financial incentive is all wrong. The financial incentive or reward must be to keep people as healthy as possible, and not reward providers when people become sick.
The financial incentive is a particular problem, with an estimated 50 per cent of general practices owned and run by corporations.
No one wants to talk about the corporatisation of general practice for fear of finding spiders under the rocks. Just think about the consequences of corporatisation in TAFE, child care and aged care.
FFS may be appropriate for ‘episodic care’ but we need to move to salaries, contracts and per capita payments to general practitioners for quality, long-term patient care to keep people healthy. This change would improve the delivery of health services – this change is long overdue.
Second, we need to provide sufficient subsidies to deliver better outpatient services in public hospitals to allow those hospitals to provide specialist services to overcome delays in private specialist waiting times and, in many cases, reduce fee-gouging.
Third, we must reduce pressure on hospitals by encouraging a much greater delivery of health services outside hospitals. Our hospitals should be the last resort rather than the first resort. Denmark is showing the way. In 2007, there were 40 hospitals in Denmark. By 2016, there were 21.
As many health services as possible were provided through health centres and outpatient clinics. Hospital admissions are reserved for the acutely sick, providing them with highly specialised services.
The major health reform we need is in primary care and GP services, in particular, to keep people out of hospitals. But politicians love hospitals.
When I chaired the general health review in South Australia in 2003, we recommended priority be given to primary health care clinics in the community. So what did the government do? It committed vast amounts of dollars on a large new hospital that was over budget and over-time.
In co-operation with the states, we need to establish hundreds of publicly funded, multi-disciplinary clinics with salaried staff. That staff would include doctors, nurses, physiotherapists, dieticians, pharmacists and other health professionals.
The Whitlam government commenced the roll out of these clinics, but the Fraser government put an end to the program.
Restrictive work practices
Fourth, we must break down the 19th-century restrictive work practices imposed principally by doctors at the expense of nurses, pharmacists and allied healthcare workers. A nurse recently gave me my Covid vaccination. But she had to be supervised by a doctor!
There are workforce silos everywhere, with little effective integration. The Coalition and the media are strident about blue-collar work practices, but never a word is said about restrictive work practices by doctors and lawyers.
The best qualified and the most efficient should deliver health care. There must be a greatly expanded role for nurses: Doctors’ defence of territory must be challenged and changed.
Fifth, the delivery of prevention services have been grossly underfunded and we saw the dire consequences in the Covid pandemic under the Morrison government. We need an Australian centre for disease control.
Sixth, the commonwealth and the states blame each other on the delivery of health services. The states run the hospitals and the commonwealth funds general practice, which is owned by corporations and small operators.
States of disarray
That is a recipe for confusion in the delivery of health services. State hospitals are under continual pressure because commonwealth-funded general practice is failing in many respects to provide appropriate care in the community.
The commonwealth should negotiate with the states to develop regional/local health services in which commonwealth and state funds are pooled and all health services are integrated in delivery.
That does not happen today. It is a mess – a dog’s breakfast.
The forms and externals of Medicare – the shell – may remain but its founding principles – fairness, universality, solidarity and efficiency are being whittled away or not addressed.
For example, the average out-of-pocket cost for GP services has risen 60 per cent in the past 10 years.
If the Labor government is really the champion of Medicare, it would focus on the delivery of health services and not just on funding.
For over 40 years the ALP has lived off the Medicare legacy of Whitlam, Hayden, Hawke and Blewett. It is about time the ALP did some serious thinking about updating this legacy.
John Menadue was head of the Department of Prime Minister and Cabinet from 1974 to 1976 and worked for Prime Ministers Gough Whitlam and Malcolm Fraser.
This article appeared first published in Pearls and Irritations and is republished here with permission
