Ideas@TheCentre
Only the market can make health system person-centred
According to the NHHRC, the most important health reform recommendations in the Bennett Report will make the health system person-centred by reorienting the system around stronger primary care. This will supposedly allow health consumers to have access to the services they need rather than only have access to the current mix of ‘hospital-centric’ health services that governments want to offer.
The idea of a person-centred rather than government-centred health system is borrowed from the market-based principles associated internationally with the consumer-directed health care movement.
The aim of consumer-directed health care is to reform the old-fashioned ‘command-and-control’ arrangements that limit choice and prevent competition in the government sector of the health system.
Right now, the type, amount and mix of taxpayer-funded health services that are or are not provided to Australians are determined by federal and state governments, whose crucial yet often imperfect policy decisions frequently overlook the actual needs of patients.
Health departments allocate taxpayer subsidies in the form of population-based, capped global budgets to public hospitals and community health services, which are expected to deliver an unquantified and indeterminate amount of health services to the community.
For consumers, this is well described as a ‘take what you’re given’ system.
Consumer-directed health care would improve the responsiveness of hospital and other health services by the application of quasi-market mechanisms.
The key reform is to make funding flexible, responsive, and far more accountable. The taxpayer subsidy should be tied directly to the delivery of services and only be paid at the point at which each occasion of care is provided.
Funding should follow patients by means of a taxpayer-funded voucher, and patients, subject to clinical referral, should be allowed to purchase appropriate services from competing public or private providers.
In the long run, empowering consumers and tying funding to patients based on clinical need and choice of competing providers would reduce costs, while increasing access, quality, productivity, and allocative efficiency.
Most importantly, governments would no longer centrally plan the type, amount and mix of health services as the supply would be set by the actual health needs of individual patients.
Market-based structural reform that promoted the efficient use of scarce resources would therefore establish a truly person-centred health system.
Dr Jeremy Sammut is a Research Fellow at the CIS. His report, Like the Curate’s Egg: A Market-based Response and Alternative to the Bennett Report was released by the CIS this week.
