Challenges for the Australian Health System and Reform Options - PowerPoint PPT Presentation

1 / 32
About This Presentation

Challenges for the Australian Health System and Reform Options


In Australia introduction of some capitated and practice based payments ... Managed care or health funding based on capitation ... – PowerPoint PPT presentation

Number of Views:282
Avg rating:3.0/5.0
Slides: 33
Provided by: Unip3


Transcript and Presenter's Notes

Title: Challenges for the Australian Health System and Reform Options

Challenges for the Australian Health System and
Reform Options
  • Delia Hendrie
  • School of Population Health

Objectives of this lecture.
  • Examine current pressures on health system
  • Provide a rationale for the capacity to improve
    health system performance
  • Discuss selective health system reform options

Pressures on Health System Expenditure
  • Community expectations of the health services
    they require
  • Advances in health technologies and their cost
  • Demographic changes
  • Ageing population
  • Low or negative population growth

Community Expectations
  • Growth in economy
  • Increase in GDP between 1992/93 and 2002/03 of
    3.9 pa in constant terms
  • Growth in average health expenditure per person
  • Increase in health expenditure between 1992/93
    and 2002/03 of 3.3 pa in constant terms
  • 2,545 per person in 1992/933,506 per person in

Advances in Health Technologies
  • Include . the drugs, devices and medical and
    surgical procedures used in health care, (and the
    organisational and supportive systems within
    which such care is provided)
  • Provide benefits to patients
  • Prevention and treatment of disease and
  • Contributing to improvements in survival and
    quality of life
  • Cost-enhancing rather than cost saving

Demographic Changes
  • Ageing population
  • Percentage of population aged 65 years and above
  • 2001, 12 2021, 18 2041, 25
  • Dependency ratio (ie ratio of the popn 65 years
    to 18 to 64 years)
  • 2001, 0.2 2021, 0.3 2041, 0.5
  • On average older people use significantly more
    health services per person than other Australians
  • Costs per person in the PBS average costs for a
    male 65 to 74 years more than 18 times those for
    a male aged 15 to 24

Population Health Status
  • Population health status been improving steadily
    over time
  • Life expectancy average increase of 8.6 years
    from 1960 to 2000 in developed countries
  • Infant mortality declined
  • 36.4 deaths per 1000 live births in 1960
  • 7.0 deaths per 1000 live births in 2000
  • Level of premature death
  • Cut by half (measured by years of life lost
    before age 70)

Variation in Health Outcomes
  • Big differences across countries in life
    expectancy and other indicators of health
  • Sweden and Japan have infant mortality rates of
    3.4 per 1000 live births New Zealand, 7.2
    United States, 7.7
  • Life expectancy at birth in Japan, 81.2 years
    United States, 76.8 years
  • Also differences within countries

Variation in Health Outcomes Australia
Variation in Health Outcomes Australia
Improvements/Differences in Health Status
  • Significant differences in health outcomes
  • Countries
  • Groups within countries
  • Multiple determinants of health
  • Some countries/groups doing better
  • Suggests further gains are possible

Framework for Financing and Organising Health
Health System Reform Options
  • Revenue collection and risk pooling
  • equity and access macro-economic efficiency
  • Purchasing health care
  • allocative efficiency provider autonomy
  • Provision of health care
  • technical efficiency quality of care
  • Benefit package
  • equity and cost control consumer choice

Revenue Collection and Risk Pooling
  • Increasing funding sources
  • Several policies implemented to promote
    membership of private health funds
  • Tax penalty for high income individuals without
    private cover
  • 30 rebate on PHI premiums
  • Lifetime health cover to discourage people
    delaying purchase of insurance
  • Reflects belief that health system should be
    based on a mixed system of insurance and provision

Assessment of PHI in Australia
  • Private health cover
  • Enhances choice over providers and access to
    timely elective care
  • Helps finance the development of private hospital
  • But .
  • Private funds have not actively engaged in cost
  • Subsidies to private health cover pose
    considerable pressures on public finances
  • Supported the development of a two-tiered health

Purchasing Health Care
  • Performance related purchasing (e.g. of more
    active purchasing)
  • Use of contracts to improve efficiency through
    higher accountability in use of resources
  • Require providers to cooperate with certain
    utilisation reviews and quality assurance
    promote standard treatment protocols (i.e.
    clinical practice guidelines)
  • Maintain profiles of individual providers for
    monitoring and providing feedback on treatment,
    referral and prescribing practices

Daily Telegraph 6 March 2004
  • Eight GPs accused by the Health Insurance
    Commission of churning through up to 140
    patients a day
  • Breached Medicare rules ? cannot treat more than
    80 patients a day on more than 20 days of the
  • 48 weeks x 5 days x 80 x 25.70 (level B consult)
    approx 500 000 per year

Performance Related Purchasing
  • Remuneration methods of health professionals and
  • Example of doctors Main alternatives are..
  • Fee per head (capitation)
  • Fee for service provided
  • Salary
  • Also mixed payment system
  • Different type of fee provides different
    incentives that affects efficiency with which
    health care is provided
  • Reform payment mechanisms to provide preferred
    incentives (e.g. reduce over-servicing)
  • In Australia ? introduction of some capitated and
    practice based payments

Provision of Health Care
  • Increasing efficiency
  • Quality of health care significant shortcomings
    in health care quality
  • Inappropriate use of procedures
  • Under-use of accepted services
  • Medical errors
  • Systemic causes of health care quality problems
  • Health and economic impact of health care quality

Quality of Health Care
  • Health and economic impact of health care quality
  • Unnecessary diagnostic tests and procedures
  • Expose patients to unnecessary health risks
  • Tools/strategies for health care quality
  • Development of indicator frameworks to benchmark
  • Creation of new institutions to monitor and
    improve quality
  • Better data and information systems needed to
    drive/support improvement

Provision of Health Care
  • Increasing efficiency
  • Reduce role of government ownership/ provision
  • Contracting out of service provision to private
  • Advantages
  • Remove administrative and political constraints
    of publicly provided services
  • Exposes providers to the discipline of
    competitive markets, etc
  • Disadvantages
  • Equity implications
  • Objectives of private providers
  • Short term focus of private providers

Increasing Efficiency
  • Reduce role of government ownership/ provision of
    health services
  • Public financing but private provision and
    sometimes ownership
  • Example of Joondalup Health Campus
  • Public hospital services funded by HDWA but
    provided by Mayne Health/Affinity/ Ramsay Health
  • Evidence not available to support or weaken case
    for privatisation of provision of services

Benefit package
  • Redefine the benefit
  • Change the eligibility for public financing/
  • In the AHCS, public financing/subsidising of
  • Hospital treatment
  • Medical services
  • Pharmaceuticals
  • Public health
  • Aged care

Redefining the Benefit Package
  • Changes to access to
  • the Medicare safety net
  • Medicare safety net was a key issue in last
    years federal elections
  • Under the safety net scheme the government pays
    80 of out-of-pocket payments above a certain
  • Increase in the safety net threshold from 300 to
    500 for low income earners and 700 to 1000 for
    high income earners
  • Blow out from 444 million to around 1 billion
    in first year

Redefining the Benefit Package
  • Limit the number of subsidised IVF treatments
  • Medicare subsidises about half the 8000 cost of
    each IVF cycle
  • Restricting
  • Women under the age of 42 to a max of three
    subsidised treatments each year
  • Women over 42 to a total of three IVF cycles with
    a rebate
  • Approx 6,000 IVF births a year and cost
  • Save 7 million a year

  • Prioritising Treatment for Individual Patients
  • Making decisions at point of service delivery gt
  • What principles to apply?
  • Seeking a fair or equitable system
  • Horizontal equity i.e. people with equal need
    should have access to equal health care
  • Vertical equity i.e. people with unequal need
    should have access to unequal health care
  • How to define Need? Equal need? Appropriate
    levels of positive discrimination to compensate
    for additional need?

  • Prioritising Treatment for Individual Patients
  • Factors to use as basis for rationing
  • Immediate need i.e. urgency
  • Capacity to benefit or chance of a positive
  • Age/life expectancy
  • Quality of remaining life
  • Cost
  • Ethical issues such as self inflicted disease,
    potential contribution of the person to society,
    presence of dependent children

System Planning
  • Major structural change
  • Managed care or health funding based on
  • Decentralisation of health care resource
    allocation and delivery of services
  • Information systems
  • Electronic medical records
  • Scientific research
  • Promote evidence base

Concluding Remarks
  • Emphases in the ideal health system
  • Equity of outcomes community-based programs
    quality of care consumer choice and
    accountability efficiency
  • Change is always difficult
  • Distinctive features about policy change in the
    health system
  • Managing the transition
  • Some aspects straightforward (eg achieving
    technical efficiency) other aspects more
    difficult (eg may be a lack of an evidence base)
Write a Comment
User Comments (0)