Opinion & Commentary
A dose of reality: public health problems need private solutions
Health reform is like herding feral cats, yet implementing some commonsense measures can improve the performance of the health system. We can stop waste on overheads by downsizing state health bureaucracies and putting local community boards in charge of managing public hospitals. We can make hospitals financially accountable and give them an incentive to treat more patients by funding services on an activity basis. We can use choice and competition to increase productivity by establishing a voucher system for procedural care.
The government and opposition health reform plans will do some of these things and won't do others. But what is missing from the debate is the realisation that no reforms will ever deliver the cornucopia politicians have promised and failed to deliver for a generation.
Twenty-five years of Medicare has conditioned Australians to expect the impossible. No health system can provide 'free' healthcare on-demand, spending only 10% of GDP as we do, and funnelling 70% of health expenditure through government.
A dose of realism is needed, particularly concerning elective waiting lists. Private solutions for the failings of the public system need to be embraced because the failure to recognise the limits of publicly funded healthcare is at heart of the crisis in the nation's public hospitals.
Before Medicare, more than 80% of the population had private health insurance, which principally paid their hospital bills irrespective of whether they were treated in a public or private facility. The promise of 'free' taxpayer-funded public hospital treatment for all led to a large fall in health fund membership. The high dropout rate shifted the cost of the hospital services previously paid for by health funds onto government budgets.
The response by state governments was to limit health expenditure by cutting beds. . One-third of all public hospital beds have disappeared since 1984, a 60% decline in beds per 1000 population. The intended result was the emergence of lengthy waiting lists for elective surgery. However, waiting times quickly became a sensitive political issue and administrators came under pressure from their politician-masters to maximise elective surgery. The response was to run public hospitals at near to maximum bed occupancy, which left few spare beds available for unplanned admissions. The result is the chronic overcrowding experienced in emergency departments, with over one-third of emergency patients waiting longer than eight hours before being admitted to a bed.
All 'free' health systems need to ration access to care by queuing. But rationing should be performed ethically, based on relative need, not irrationally and immorally by means of emergency queues. Forcing the sickest patients to wait for care is profoundly inequitable, as is the avoidable suffering caused by elective waiting lists. The fall in health fund membership increased the cost of premiums and priced out lower income groups, left with no access to private hospitals and no choice than to join the public queue.
The idea that politicians should solve these problems by throwing even more money at public hospitals is unsustainable. Responsibility for fixing the system needs to be taken out of the hands of government and the onus placed on individual citizens. This doesn't mean that another round of Howard-style fiscal carrots and sticks should be thrown at voters to coerce and cajole the populace into taking out private insurance. Instead, a concerted effort should be made to educate Australians about the realities of the situation.
A national advertising campaign aimed at middle Australia should debunk the myths of 'free' healthcare with the explicit goal of increasing private health coverage beyond the current 44% of the population. It should do so by promoting the message that rationing of public hospital services is unavoidable, and by making the point that while reforms might reduce elective waiting times, waiting will never be eliminated because the health budget is limited and more needy patients at the front of the queue should be attended too first.
The general public should also be informed that public hospitals provide an essential service, and are required to treat the sickest, most complex patients and 90% of emergency cases. Underlined should be how the political pressure to cut elective waits has contributed to daily emergency overcrowding.
Minimum waiting times should also be advertised to promote private health fund membership and to praise the private sector for developing a highly effective private hospital system, which provides rapid access to elective care for health fund members.
By these means, every citizen should be encouraged to make a rational choice between waiting for treatment and paying for treatment. What should also be emphasised is that the more people that take personal responsibility for their healthcare and pay for private insurance, the more affordable the premiums will be, and the better and more equitable access all Australians will have to hospital treatment.
In an election campaign, politicians love to beat up expectations and the last thing they want to tell voters is what government cannot do for them. But when it comes to improving Australia's hospitals, a private solution is needed to bolster our 'mixed' health system.
Jeremy Sammut is a research fellow at The Centre for Independent Studies. This article is based on his Introduction to 'No Quick Fix: Three Essays on the Future of the Australian Hospital System' by Wolfgang Kasper, John Graham, and Jeremy Sammut to be published by CIS this month.
