Harsh medicine not necessarily the best cure

This blog by CHF CEO Adam Stankevicius was published in the Financial Review on 30 July 2014. You can access it on the Finanicial Review website.


The Australian health system wallows in a state of uncertainty as the federal ­government grapples with how to match its budgetary vigour with the reality of heavy demand and strained supply in healthcare.

Change is a feature of contemporary healthcare, beset by unrelenting rises in costs, the impact of an ageing population, demands for the introduction of costly new technology and the clamour for advanced care generated by the growth of healthcare knowledge.

In contrast to the federal election campaign which signalled steady-as-she-goes health policies, Australia faces the prospect of quite fundamental and controversial changes that may well bring big adjustments to the accessibility and financing of healthcare.

The proposed $7 co-payment has been the headline-grabber. But elsewhere there are significant changes afoot that have the potential to exert ­painful but not necessarily therapeutic impacts on healthcare.

These include the federal government’s proposal to slash billions of dollars from its contribution to the states/territories for public hospitals; the rejig and potential corporatisation of primary healthcare networks, and a (hopefully) more serious intention to drive the ­development of e-health in the form of patient electronic health records.

Given we are at a point where the health system seems ripe for fundamental reforms, yet with little in the way of comprehensive strategy in place, the best starting point should be to consider how best to service the patient and consumer.

The Consumers Health Forum (CHF) opposes a Medicare co-payment for GP, pathologist and diagnostic imaging ­services as posing an inefficient, ­ineffective and potentially harmful ­barrier in the way of basic primary care. The co-payment would erode equity and result in people forgoing immediate care leading in some cases to worse and more costly illness.


The CHF argues however that ­Australia does need to rethink Medicare to ensure that the principle of ­universal access to healthcare is ­maintained and enhanced.

The rising costs of healthcare continue without any clear measure of whether we are getting best value and without ­effective financial incentives to drive cost-effective, or consumer-centred care.

We do know from international ­surveys by the respected Commonwealth Fund of New York that Australia’s health system performs reasonably well – fourth overall out of 11 nations surveyed on ­indicators including efficacy and safety.

However the glaring downside in Australia is in the area of cost-related access problems and timeliness of care. Here, Australia scores ninth out of 11 when assessed across a range of measures. On out-of-pocket health costs of more than $US1000 ($1064), only the ruinously expensive USA beats us into worst spot.

One-quarter of Australians reported out-of-pockets of $US1000 equivalent, compared to 41 per cent of Americans, but well over the average 15 per cent for the other countries. As well 16 per cent of Australians reported that they skipped a doctor’s visit, recommended medicine or other treatment because of cost.


Australians were also relatively more likely than those in other countries surveyed to report delays of more than a day to see the doctor and encounter difficulties getting medical care out of hours.

Australia also scored relatively poorly on the rate of patients having problems with getting expected payments from insurance funds for medical care, according to the Commonwealth Fund survey.

Instead of introducing the co-payment for Medicare and raising it for prescriptions at a time when significant numbers are already facing cost barriers, we should be looking elsewhere to make the system more cost effective.

For instance savings could be achieved by pruning systemic waste in areas like potentially preventable hospitalisations – estimated to total more than 500,000 a year. And more than 150 healthcare ­practices in Australia have been ­identified as potentially unsafe, ­ineffective or inappropriate.

Any talk of a health blowout in Australia does not withstand scrutiny in the longer term. The Commonwealth Fund report shows Australia has experienced the lowest growth in health spending of comparable Western nations in the past three decades.

But there is one broad direction the government has taken that the CHF does support. That is its stated intention of pressing ahead with a personally controlled electronic health system.

The curiosity about e-health is that it has not taken off much sooner in the information-drenched environment of healthcare. As information technology has achieved in every other sphere, why should it not transform the efficacy of healthcare once fully implemented – to the benefit of consumers, taxpayers and the health system?


About the author

Adam Stankevicius

Adam Stankevicius was Chief Executive Officer of the Consumers Health Forum of Australia.