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Editorial: Condition critical
January 13, 2006 BARELY a day passes without news of a breakthrough in the world of medicine,
yet there remains regretfully little innovation where it's needed most in the
administration of the health system itself. In Australia, rigid and outdated
cost-sharing arrangements between Canberra and the states continue to cripple
the delivery of healthcare. Run by nine ministers, 6000 bureaucrats and
closed-shops of medical professionals, this system is built for inefficiency and
buck-passing but not for the best care of patients. It offers John Howard an
opportunity to show leadership, and make some history, by moving to take over
the state-run public hospital system. Currently, Canberra sets health policy,
the states run the hospitals and both levels of government contribute to the
cost of administering a dysfunctional and inefficient system. Each blames the
other for problems, and each tries to shift costs to make the other pay more.
The Prime Minister should take a first step at next month's meeting with Labor
premiers by releasing the report he commissioned (but has kept secret) from
former federal health department head Andrew Podger. Mr Podger reportedly
believes Canberra should take control of the system. Research by the University
of Canberra suggests such a move could save $1 billion in improved efficiency.
Mr Howard's reluctance to reveal the Podger report is regrettable. It's clear
there are political problems in such a move after all, if Canberra takes over
the hospitals, it has nobody to blame when things inevitably go wrong. But it's
also the most sensible way of solving the problem. Federal Health Minister Tony
Abbott was right when he told The Australian last August that the only
big reform worth considering in health was the federal Government taking
responsibility for the entire health system. These days, Mr Abbott toes the
Howard line. But others are not so restrained. Alex Somlyay, a Liberal MP and
former health department economist, calculates that the cost-shifting between
Canberra and the states means only 20c out of every dollar spent actually
reaches the patient. If this federalism fiasco wasn't bad enough, there's a long
list of other problems: the shameful treatment of the mentally ill, the chronic
shortage of doctors, the surge in obesity, the skyrocketing cost of cholesterol
drugs and the steady rise in private health insurance costs. Yet the country
already spends a fortune on healthcare, more than 9 per cent of gross domestic
product, and that is forecast to be driven up by an ageing population and
increased costs to about 15 per cent by 2040.
The evidence is inescapable that the need for root-and-branch reform of the
health system is essential and urgent. The federal Government has worked hard to
open competition throughout the workforce and economy, and it should apply the
same principles to medical professional organisations. Part of the reason the
nation has a shortage of doctors, including highly paid specialists, is that the
medicos themselves control their own standards and numbers a cosy arrangement
that needs to stop. Increasing the number of obstetricians, some of whom are
reportedly charging patients five times the Medicare scheduled fee, is one way
of increasing competition. Another commonsense approach is to allow more nurse
practitioners, who are trained in a wider range of medical skills, despite
resistance from doctors.
It is also perplexing to see Mr Abbott warning off large companies such as
Woolworths that want to move into selling medical services, and criticising
corporate medical service providers. Overservicing should not be tolerated, yet
if companies add competition to the marketplace and choice to the consumer,
providing they are properly policed, that is a good
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