Health compacts: a new era in health policy setting?

The five compacts the Health Minister, Greg Hunt, has agreed with health organisations may deliver benefits for health providers and certainty for the medicines industry and community pharmacy sector.

But these compacts announced in the federal Budget  also raise important questions about the overall benefit for consumers.

What will the compacts do for the most pressing health challenges facing Australia: obesity and the care of the growing number of Australians with chronic and complex care needs?

At a time when medical knowledge and technology promise better outcomes through more cohesive, integrated health care, the risk is that bi-lateral compacts will further fragment and silo health care.

Minister Hunt’s compacts serve a functional rather than an aspirational purpose. They are pragmatic and set out obligations between the government and the various parties in order to implement the Government’s health Budget measures rather than providing an overarching strategy of how Australia should best tackle issues like obesity and chronic care.

Mr Hunt has achieved much in the four months he has been Minister in reaching agreements on hugely costly issues at a time of budgetary crunch.

Pre-Budget the Consumers Health Forum joined with many others to call for a lift in the Medicare freeze.  Australian consumers already pay enough out of their own pockets for health care, and the number avoiding visiting the doctor and filling scripts due to cost is on the rise.  Both they and the system can ill-afford people going without care altogether or ending up unnecessarily in the emergency room.

But we wanted the lift to come with strings: we urged the Government to use the leverage of the removal of the Medicare freeze to prompt further moves towards the development of a more consumer centred health system.  In part, that’s what we’ve got.

The Minister’s compacts with the doctors include agreement on the gradual unfreezing of Medicare benefits in return for obligations to promote MyHealthRecord electronic patient records, to support the Medicare benefits review, tighter access to higher cost out of hours home visits and cautious support for the Health Care Homes trial.  That trial is to road-test the development of more integrated, patient focused primary health care.

Pharmacy owners receive a range of benefits including compensation for lower prescription sales, continued protection against new entrants, a more active role in the development of Health Care Homes and a review of the $1 per script discount provisions in exchange for cooperation with the government. The pharmaceutical manufacturers get a pledge of future price stability in the wake of the recent price cuts imposed by Government in order to shore up the sustainability of the Pharmaceutical Benefits Scheme.

Given the $75 billion the Federal Government expects to spend on health next financial year, it is an achievement that Mr Hunt has at least reached some form of agreement with these groups whose members will receive    much of that expenditure. 

While these compacts may deliver for those whose incomes depend on the health system, consumers and taxpayers are largely left out of picture in terms of their interests.  That is despite the fact the negotiations ultimately affect the population’s health care, their money and how it’s spent.

The realities and costs of health care these days place the Federal Government in a pivotal position to drive beneficial change from the practitioners and sellers of health services and products.  Given the ever-increasing cost and range of health care treatments, the Government should be including the most important party of all --- the consumers ---- in their considerations.

The benefit of the compacts is that they provide a new, if not unprecedented, transparency in health policy making. We have public obligations and commitments to which Government and providers can be made accountable.

On the downside, the compacts have been developed in isolation from one another, without consumer input and without a cohesive strategy linking the different sectors’ aspirations.

 That means the priorities of the provider groups take prime place, without active attention to what patients, consumers and the community may need or wish for:  their aspirations for Australia’s health system. 

Mr Hunt has declared his aim is to put in place a long term health plan and has described three waves of reform to 2020. 

We strongly agree such a roadmap is vital if Australia is to have a fit-for-purpose health system that delivers the best health care it can to all. Given medical knowledge, our highly skilled health workforce and the capabilities of modern technology, it is totally reasonable to expect a more connected health system that places patients in the centre of coordinated care as the hallmark and aim of contemporary health care.

The opportunity to develop a more consumer-centred approach should be taken with the proposed reform of private health insurance.  Mr Hunt has indicated that he hopes to put in place similar compacts with other parts of the system.  

Given the central part consumers play in choosing their health fund and the  roles of private practitioners and hospitals, if Minister Hunt were to contemplate a compact with the health insurance sector, this is a prime example of the worth of a coordinated agreement.

If consumer choice is the reason for private health insurance, it is time for consumers to have real choice in the policies that govern it.

To unify and coalesce Minister Hunt’s existing five compacts, we need a multi-stakeholder agreement on common principles about what constitutes good person-centred, community focused health care.

It’s time for a new relationship with patients and for putting patients and communities in control of their health.

It’s time for people-centred care to be the ‘new normal’ in health systems.


About the author

Leanne Wells

Leanne Wells

Chief Executive of the Consumers Health Forum of Australia