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

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Challenges for the Australian Health System and Reform Options

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

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Title: Challenges for the Australian Health System and Reform Options


1
Challenges for the Australian Health System and
Reform Options
  • Delia Hendrie
  • School of Population Health

2
Objectives of this lecture.
  • Examine current pressures on health system
    expenditure
  • Provide a rationale for the capacity to improve
    health system performance
  • Discuss selective health system reform options

3
PRESSURES ON HEALTH SYSTEM EXPENDITURE
4
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

5
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
    2002/03

6
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
    disability
  • Contributing to improvements in survival and
    quality of life
  • Cost-enhancing rather than cost saving

7
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

8
CAPACITY TO IMPROVE??
9
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)

10
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

11
Variation in Health Outcomes Australia
12
Variation in Health Outcomes Australia
13
Improvements/Differences in Health Status
  • Significant differences in health outcomes
    between
  • Countries
  • Groups within countries
  • Multiple determinants of health
  • Some countries/groups doing better
  • Suggests further gains are possible

14
HEALTH SYSTEM REFORM OPTIONS
15
Framework for Financing and Organising Health
Systems
16
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

17
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

18
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
    facilities
  • But .
  • Private funds have not actively engaged in cost
    controls
  • Subsidies to private health cover pose
    considerable pressures on public finances
  • Supported the development of a two-tiered health
    system

19
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

20
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
    year
  • 48 weeks x 5 days x 80 x 25.70 (level B consult)
    approx 500 000 per year

21
Performance Related Purchasing
  • Remuneration methods of health professionals and
    institutions
  • 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

22
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
    problems

23
Quality of Health Care
  • Health and economic impact of health care quality
    problems
  • Unnecessary diagnostic tests and procedures
  • Expose patients to unnecessary health risks
  • Tools/strategies for health care quality
    improvement
  • Development of indicator frameworks to benchmark
    providers
  • Creation of new institutions to monitor and
    improve quality
  • Better data and information systems needed to
    drive/support improvement

24
Provision of Health Care
  • Increasing efficiency
  • Reduce role of government ownership/ provision
  • Contracting out of service provision to private
    providers
  • 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

25
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
    Care
  • Evidence not available to support or weaken case
    for privatisation of provision of services

26
Benefit package
  • Redefine the benefit
  • Change the eligibility for public financing/
    subsidies
  • In the AHCS, public financing/subsidising of
  • Hospital treatment
  • Medical services
  • Pharmaceuticals
  • Public health
  • Aged care

27
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
    threshold
  • 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

28
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

29
  • Prioritising Treatment for Individual Patients
  • Making decisions at point of service delivery gt
    rationing?
  • 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?

30
  • 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
    outcome
  • 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

31
System Planning
  • Major structural change
  • Managed care or health funding based on
    capitation
  • Decentralisation of health care resource
    allocation and delivery of services
  • Information systems
  • Electronic medical records
  • Scientific research
  • Promote evidence base

32
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)
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