Either someone gets brave and makes root-and-branch infrastructure reforms or Australia’s healthcare system will spiral even further into US-style inequity.
Reform inertia in Australian healthcare system over the past 20 years has been maintained by a fear of someone “losing”, says one of the country’s leading health economists.
Professor Martin Hensher, the Henry Baldwin professorial research fellow in health system sustainability at the Murdoch Institute for Medical Research, said politicians, health reformers and policy makers have “failed for a generation”.
“The expectation has been that major reform cannot be done if anybody loses,” Professor Hensher said.
“The truth is, it’s been a very abnormal period in history when you could do reform and everybody wins. Somebody’s going to lose something. You have to have sensible conversations.”
Professor Hensher was responding to an article by Associate Professor Emily Callander, published in the Medical Journal of Australia.
“In Australia, out-of-pocket fees make up a larger proportion of overall health expenditure than in these other countries [with similar systems, such as New Zealand, France, Ireland, Germany, the Netherlands and the UK],” wrote Professor Callander.
“The increasing out-of-pocket expenditure by patients is concerning in light of international experience in the United States, where there is a reliance on private or market-based health care, and health care costs are the leading cause of bankruptcy.
“Varied viewpoints range from the impact of high fees on a patient’s ability to access care and the equity implications of high fees, to the right of private providers to set their own fees in an open market and to recover costs of providing care.”
Professor Hensher said Australia’s reliance on out-of-pocket costs is anomalous, given that we are one of the richest countries in the world.
“When you look globally at different countries, from low-income through middle-income up to high-income, one of the distinguishing features is that in the poorest countries, healthcare is funded overwhelmingly by out-of-pocket payments,” he said.
“As countries begin to escape poverty and move into middle income, they very quickly move away from out-of-pocket costs and into government-funded healthcare and social insurance.
“Our out-of-pocket costs are beginning to be anomalous – they’re beginning to not be consistent with having a high income, and it’s actually the out-of-pocket payments that have to go.
“If some of the infrastructure has to be pulled down to make that happen, so be it. Because if we stay tracking this way, we do go towards the US system, not just in the usual way that we talk about the US, but the way the US actually is, which is that many of its people effectively live in a lower-middle-income country which also happens to have the richest people in the world in it.
“And we don’t we don’t want to go that way.”
Professor Hensher acknowledged that there were “terrible problems” in general practice, but suggested that out-of-pocket costs were even more of a problem for specialists, citing his recent narrative review, published in the MJA.
“The major causes of out-of-pocket costs were non-PBS pharmaceuticals, and dental and medical services; in the non-hospital Medicare category, the major contributors were specialists’ services (33.7%), GP services (24.6%), and diagnostic services (12.3%),” Hensher et al. wrote.
“Some specialists charge patients more than twice the relevant MBS fees, and some surgeons more than three times the MBS rate for common procedures. Specialists often do not discuss out-of-pocket costs with patients in advance, which can result in unexpectedly large costs for the patient.
“The Australian Bureau of Statistics 2016–17 Patient Experiences Survey found that 7.6% of people aged 15 years or more (1.3 million people) deferred or did not use specialist, general practice, imaging, or pathology services because of the cost involved.
“People with chronic conditions were more likely to forgo health care because of cost than people in other high-income … countries. Some people skipped appointments or did not use prescribed medication because of cost, reported they could not pay for other living expenses, or drew on their savings or superannuation or sold assets to pay for health care.”
Speaking with our sister publication, The Medical Republic, Professor Hensher said it was time for some courage and action from those at the top levels of Medicare and health system reform.
“There is no alternative, but quite deep structural solutions,” he said.
“The Callander paper draws all the right conclusions – without being alarmist, [out-of-pocket costs are] the thing that will take us into US-style territory, combined with corporates and private equity ownership of practices, which we already know is accelerating.
“There’s a worst-case scenario, which a lot of doctors are falling into because of the pressures that they face – they’re selling up to big chains, many of whom increasingly are private equity-owned. Their only interest is extracting profit and they will do that any way they can include including by maximising out-of-pocket fees.
“Lots of people may soon start falling out of the healthcare system, because the safety net programs are targeted at very poor people. But people who are not very poor, yet can no longer afford their care, will find that they are not helped by those programs.
“That [scenario] will be coming quite soon.
“The things they’re talking about in the Strengthening Medicare Taskforce report, they’re very nice,” said Professor Hensher. “But they’re no way big enough to meet the scale of the problem. And they’re only talking about general practice.
“The rest is not even being addressed.
“Out-of-pocket costs are only one problem, but it’s a problem that’s just going to get worse and worse over years to come unless we intercept it.”
So, what are the solutions?
“The problem is political will, and this misplaced fear that if you get it wrong, there’ll be this enormous flood of people into the public sector that we won’t be able to deal with,” said Professor Hensher.
“I would put the argument the other way: we’re handing over enormous amounts of public subsidy to the private sector, private health insurance and private doctors, with no real visible benefit.
“If you took that money and put it into public provision systems, you might actually get a better outcome and a more efficient solution.
“To be blunt, we’ve got extremely rich stakeholders who benefit from the status quo. It’s not a coincidence surgeons are always the highest-paid income group.
“Yes, doctors need to be well paid. Do they need to be that well paid? Probably not.”
Which brings the debate back to who loses if major reform is undertaken?
“In the long sweep of history, the medical profession is never really going to lose out,” said Professor Hensher. “Maybe you need to take a little bit less.
“All roads lead back to having everything on the table. Cost caps, or even bans on out-of-pocket costs, capitation models, all of it.
“Over the next two or three years, there’s got to be a real and different discussion about do we want universal health care in this country? And if we do, what is it?
“We can’t carry on pretending – whichever way we jump, there will be losers. And that’s the conversation we need to start having.”
