The
government’s announcements on hospital reform are bold and deserve widespread
support. They are a step in the right direction. I am agreeably surprised,
given the history of previous health reform attempts.  I hope the states
and the coalition are not churlish and miss a great opportunity for themselves
and the Australian people.

In the
months ahead there will be hard negotiations and further policy announcements
to flesh out yesterday’s announcement.

I will
be looking for future policy statements about how hospital care is integrated
with primary care. The announcement has a clear hospital focus, a continuation
of an obsession we all have with iconic hospitals. The best health systems in
the world are grounded in primary care. In Australia we are over hospitalised.
A policy objective should be to keep people out of hospital with alternative
arrangements in the community. Hospitals are like the family refrigerator;
regardless of size it will always be full.

The
government is challenging, quite correctly, the special interests of state
governments and their health bureaucracies. What is needed next is for the
government to find the political will to challenge other stronger special
interest groups, particularly among the providers – the AMA, the Australian
Pharmacy Guild, pharmacy companies and the private health insurance funds. They
have legions of lobbyists who dominate the public debate at the expense of a
community that is effectively excluded and disenfranchised.

The
current debate is between the government and well-funded and well-organised
special interest groups – the community is pushed aside. We need to take it out
of that closed room and put it in the hands of an independent umpire – a body
solely looking out for the health needs of Australians.

A key
part of integration of all health care will be governance at both national and
local level. The solution to Australia’s
ailing health system would be for both the States and the Federal Government to
relinquish power to an independent health commission. If our health system had
its own independent body – a Reserve Bank for health – Australians would have
more confidence that decisions were being made based on need rather than
political point scoring.

An
independent commission has already proven its worth in the Canadian province of Ontario. In 1996, the provincial
government there set up an independent Health Services Restructuring
Commission, not only to advise on restructure but also to implement the
restructuring. The ministers there recognised that they were too subject to
pressure by special interests and that a more arms-length and independent
commission could achieve outcomes that they couldn’t. The independent
Commission made significant progress, and after a period of time handed back
its powers to the ministers.

The
Commonwealth Government should establish a permanent, independent, professional
and community-based statutory authority, an Australian health commission,
similar to the Reserve Bank in the monetary field. The Reserve Bank’s
governance structure has made it almost impervious to lobbying and generally,
it has been independent.

Such an
independent health commission with strong economic capabilities is necessary to
facilitate informed public discussion, counter the power of special interests
and determine programs and distribute Commonwealth health funds across the
country. Last year, the Business Council of Australia called for a single
‘independent body that can lead and be accountable by the Australian community’
for health services. The traditional ministerial/departmental model is
proving just too susceptible to special interests in health.

The
Commonwealth Government should not opt out of policy responsibility, but issue
principles, as it does to the Reserve Bank, to provide policy and
implementation guidelines for the health commission. The principles could
include:

• universality,
• equity,
• efficiency
  (both technical and allocative),
• single-payer
  (to best manage costs),
• choice
  of provider (with government funding for private hospitals),
• subsidiarity
  (delivering healthcare at the most feasible local level),
• accountability
  (With all providers obliged to meet key benchmarks. What about a ‘my hospital’
  website? With fee for service, providers are compensated for the number and
  length of transactions rather than health outcomes.),
• social
  solidarity and risk-sharing, and
• personal
  responsibility (For personal health outcomes and use of health services).

Not
only would the introduction of an independent commission here mean the health
of Australians could finally be made a priority, but it would also distance our
ministers from day to day partisan health issues. It would be a major step
towards evidence based policy and practice. It would allow them to get out of the
daily firing line, freeing them up to concentrate on strategic policy issues.

In
addition to the need for integration of all health care and independent and
professional governance, a range of other health reforms are essential.

First,
the Health Insurance Commission (Medicare) should be what its name implies, a
proactive public insurer anticipating risks and controlling costs. With a
default option policy for everyone, it should also provide a range of policies
for members, eg higher excess for GP visits in return for increased hospital
benefits.

Secondly,
we need a major reform of the restrictive work practices and demarcations that
bedevil our health workforce structure. In the name of safety, these archaic
work practices are designed principally to protect the turf of doctors. This is
at the expense of hundreds of thousands of other health professionals and the
community.

Thirdly,
quality and safety must be urgently addressed. There was a media frenzy over
four Australians who died installing insulation batts. There was a Royal
Commission in Victoria
over 172 bushfire deaths. Yet 200 Australians die each week in our health
sector as a result of avoidable mistakes. The silence is deafening.

Fourthly,
we need to include dental care within Medicare. The $4b p.a. subsidy to the
wealthy with private health insurance should be transferred to a universal
dental scheme. (I assume that the government has buried the outlandish
proposals by NHHRC on Denticare and Medicare Select.)

This piece is based on
a paper on governance reform presented by John to the 12th Annual Informa
Health Congress on 3 March 2010, the full text of which is available here, and John’s response to the National Health and
Hospitals Network announcement, available here.