‘Without structural change to the way in which health care is delivered and financed, the Australian health care system will continue to struggle to meet contemporary needs and expectations of its citizens.‘

Mitchell Institute Policy Issues Paper ‘Australian Health Services: Too complex to navigate’ February 2019

SIMPLIFICATION REQUIRED

An analysis of previous reviews of Australia’s health service was undertaken by the Mitchell Institute early this year. The authors report successive reviews concluded that existing funding arrangements impede the delivery of clinically effective and efficient health care, in particular for chronic diseases.

Consequently, the report, as those that have come before, recommends restructuring of current health financing arrangements to move the focus, and incentives, from high cost reactive healthcare towards investment in prevention services to reduce disease, as well as management of chronic health conditions.

A publicly funded universal insurance system in concert with private health insurance should be retained. However, the basis for remuneration of providers must ‘encourage sustained prevention, early detection and management of chronic disease and coordination of services to reduce duplication and more effective use of information’.

HEALTH CARE HOMES (HCH) TRIAL

It was on the basis of one such report (Dec 2015) that the Primary Health Care Advisory Group# recommended implementation of a Health Care Home model of care. The intent being provision of a ‘home-base’ (GP practice) for patients with complex and chronic conditions, where the care needed would be coordinated on an ongoing basis.

Stage 1 of the HCH program was to be trialled in 200 GP practices and enrol up to 65,000 patients (later modified to a cap of 12,000) by 30 June 2019. However, at this time only approximately 99 of the 175 registered practices were active with a total of 2,075 enrolled patients. The implementation of the pilot has been roundly criticised, with even the Royal Australian College of GPs withdrawing their support for the scheme (see August 2018 Medical Republic article).

In December 2018, the Government extended the HCH trial for an additional eighteen months to 30 June 2021. At the same time, it was announced that Health Policy Analysis (HPA), an independent organisation had been contracted by the Department of Health to undertake an evaluation of the implementation of Stage 1 in collaboration with experts from the University of NSW and the University of Technology.

In response to an enquiry, the Department of Health confirmed that this evaluation ‘is progressing well, with the second round of data collection and analysis under way‘. They also noted that ‘the evaluation has been extended to 2021, in line with the extension of the program. HPA will now deliver the final evaluation report to government late 2021. It will be a decision for government on whether to release the findings of the evaluation to a wider audience.’

IS LEGISLATION NECESSARY?

In 2012, the US State of Massachusetts enacted a law to control health care spending. This was in response to increases such that by 2010, costs of Medicaid and private health insurance for state employees accounted for almost 40% of the state’s annual budget. Key elements of the law include:

• limiting the growth of health care spending to growth in Massachusetts’ economy as measured by the gross state product (GSP);
• shifting from fee-for-service care to global payment models;
• supporting the formation of Accountable Care Organisations and patient-centred medical homes to improve quality and control costs; and
• promoting greater transparency through expanded public reporting of health care providers’ quality and cost data.

Eight-year results were reported in the NEJM in July (4), and demonstrate that global budgets and financial incentives for improving quality and controlling costs work. On a range of measures those patients treated under terms of the new law (labelled as 2009 Cohort) received better quality care compared to patients in surrounding States (in New England region), and the rest of the US (National). The graph shows the proportion of patients meeting quality standards for preventative care over time between these three groups. The grey vertical line is the introduction of the new law. Overall on the range of measures followed, patients experienced better health outcomes for less cost which must catch the attention of Ministers of Health!

# The Healthier Medicare initiative of the Abbott Government included establishment, by the then Health Minister Susan Ley, of the Primary Health Care Advisory Group to investigate options for the reform of primary health care to support patients with chronic and complex illness, including mental health conditions.

References
1. Hayes P, Lynch A & Stiffe J. Moving into the ‘patient-centred medical home’: reforming Australian general practice. Journal of Education for Primary Care  2016;27(5):413-15.

2. Song Z and Landon BE. Controlling Health Care Spending — The Massachusetts Experiment. N Engl J Med 2012; 366:1560-1561.

3. Ayanian JZ and Van der Wees PJ. Tackling Rising Health Care Costs in Massachusetts. N Engl J Med 2012; 367:790-793.

4. Song Z, Ji Y, Safran DG and Chernew ME. Health Care Spending, Utilization, and Quality 8 Years into Global Payment. N Engl J Med 2019; 381:252-263.

Image source

Less than 10 % of the time appears to be what is acceptable to the healthcare system.

This figure is based on the status quo. In 2006-07, an average of 8.2 % of patients admitted to public hospitals used PHI (essentially rural/remote patients with limited choice and certain specialists who need to work in a public facility). As that figure has increased over time, reaching 13.5 % nationally in 2017-18, it has become a topic of concern, regularly debated and considered unsustainable#.

Unfortunately, individual patient needs do not really feature in the discussions. Analyses of which type of patients, procedures, and waiting times have contributed to the increase, and reporting of coercive techniques being used on patients to elect PHI, all point back to assumed financial benefit as the driver.

Public hospitals welcome private patients as they bring funds from an alternate source, and hence save money in their budgets. However, according to a 2018 Report by Martyn Goddard on Tasmanian public hospitals, ‘for each patient admitted as private, the public hospital loses an average of $1,800, compared with treating the same patient publicly‘. He notes that it is a myth that private patients contribute additional funds into public hospitals because the hospital only gets PHI payment for the treatment (that does not cover infrastructure, administration, catering etc. costs) and the Federal Government does not  fund these patients with the usual percent of the national efficient price, on the basis that it already pays for Medicare and the private insurance rebate. So the hospital gets only a fraction of the usual activity-based funding**.

Patients think they are doing the right thing by using their PHI and assisting the public system to free up resources to treat more public patients or conduct research. However, they actually open themselves up to additional costs via excess/co-payments and out-of-pockets from gap specialist charges.

Whatever the altruistic motivations of this cost-shifting to the private sector, it results in  upward pressure on insurance premiums. This then sets off a sequence of events to rival ‘Mouse Trap’, except everyone seems to get caught with the cheese at the end.  When PHI premiums go up, people drop their private health insurance. These people then rely on the public health system and the health insurance rebate age penalty actively works against them opting back into private insurance at a later date. 

The more privately insured people who use their cover in public hospitals, then the less beds are available for public patients and waiting times go up in the public hospital system producing a political issue for both State and Federal Governments. Some public patients are shunted to private facilities (this already happens at a pretty constant rate of 4% of separations per annum).

In reality, these are no true private hospitals, rather a symbiotic relationship exists between public and private across the Australian healthcare system. The table shows that PHI accounted for 50.3 % of private hospital funding in 2016-17. A further 30 % coming from Federal and State Governments, including Medicare payments for medical services and the private health insurance rebate.

The statistic is startling: between 2018 and 2040, global cancer mortality will increase by 63% due to demographic changes alone.

The bulk of this impact is projected to be experienced by low and middle income countries as their, generally much larger,  populations age and economic development moves the cancer mix profile closer to those observed in high-income nations. Even now, although 59% of cancer cases occur in middle- and low-income countries, they see 71% of cancer-associated deaths.

As people live longer because they are not succumbing to previously fatal conditions, the proportion of populations for whom cancer is the cause of death will increase. It is this burden that the tag ‘epidemic’ is being used to label.

Australian age-standardised death rates, by broad cause of death, 1907–2016

In Australia, the changes in cause of death over time due to improvements in hygiene and healthcare, show that the age-standardised rates for cancer have not altered dramatically over the past century. In fact, cancer (all neoplasm) deaths, after adjusting for differences in age structure, peaked in 1985 (217 deaths per 100,000 population) and have subsequently declined to the 162 deaths per 100,000 population recorded in 2016.

Australia rated poorly on Cancer Preparedness for workforce density (in particular, radiation oncologists, clinical oncologists and surgeons); the capacity of radiotherapy equipment to meet patient need; and the change in out-of-pocket expenditure over 10 years.

To allow bench marking and initiate discussion on best practice, as part of the World Cancer Initiative, the Economist Intelligence Unit (EIU) Healthcare has published an Index of Cancer Preparedness (ICP) combining findings for 45 separate data points to provide a comprehensive overview of how well the 28 included countries are doing in the key areas of this challenge. The study was sponsored by Novartis, Pfizer and Roche.

The associated white paper describes the need for coordinated services across prevention, early diagnosis, treatment, palliative care and survivor support for effective cancer control. It describes elements that indicate the preparedness of a healthcare system to cope with the existing and projected burden including investment, national cancer control plans, accessible general health system and governance & population-based cancer registries.

The mortality-incidence (M:I) ratio (the number dying of cancer in a given period divided by the number of new cases) is used as a measure of healthcare system success against cancer. The EIU found that this ratio correlates closely, and negatively, with GDP. One of the biggest influences in poorer performance countries is that their healthcare systems are less successful in finding and treating curable cancers.

An interactive Excel workbook of the indicators and scores is available (here) by country and can produce comparative maps like that show below for tobacco control policies.

Sources: Image;  AIHW Deaths in Australia 18 Jul 2018, Figure 4.2; WHO International Agency for Research on Cancer 

Those working in the pharmaceutical industry are very familiar with evidence-based medicine (EBM) and evidence-based decision making for reimbursement. As such, we have come to expect that therapeutic and funding choices will be made following a systematic assessment of the available data. In the public policy arena however, that there can, and should be, a direct link between ‘the evidence’ and policy decisions is somewhat more problematic. Research (limiting to scientific research in this context) and policy worlds are very different.

Priorities and outcomes

The purpose of research is to advance knowledge, while policymakers want practical solutions. The research available may not necessarily be what policy makers want. From a design perspective, while control arms and blinding are de rigueur for scientific research, it may not be ethical or even possible to test political subjects using these methods. Until recently, access to operational data held by Government agencies was often difficult for researchers. Scientists rewards are focused on quality and resulting publication, less so on how findings may contribute to the public good.

Timing

Policy is delivered continuously. Demand for research is unpredictable and sporadic, with Government officials and politicians looking for it at particular moments – during campaigns, after scandals, failures, changes of leadership. Researchers must anticipate, and be ready with completed studies. However, research timelines are often long, with funding and approval lead times that make them quite unresponsive to spikes in demand. So the needed research is often not available at the time when it is required. Unfortunately, the constant shifting sands of politics may also make a well-constructed study obsolete before it even gets started.

The recent call by the Minister of Health for a reformatting of, and improved access to, Consumer Medicines Information (CMI) is one of those cases where the research has been done. Prompted by similar discussions in 2016, and ongoing efforts by industry to move away from the burdensome requirement for pack-based copies and the associated version issues, relevant data and consensus building has been undertaken. This is the ideal scenario, where the relevant policymaker or stakeholder can immediately send the Minister’s office a brief outlining a preferred solution.

A matter of perspective

Although you will see the term ‘evidence-based policy making’ (EBPM), the Blair UK and Rudd Governments were proponents, generally, it is considered aspirational, rather than a good description of the policy process. Those on the research side, may allege that policymakers ignore, do not understand nor act on the correct evidence. Why don’t policymakers select the most effective, evidence-based solution? This is because they are interpreting ‘evidence-based’ from the same frame in which they view scientific data.

Conversely, those familiar with policy making know what a messy process it can be, and have no expectation that evidence-based policy making will be solely reliant on data. It is an overarching term that refers to the consideration of a broad range of research evidence (from general public and other stakeholders; and evidence from practice and policy implementation) as part of a decision-making process that also incorporates other relevant factors such as political realities, and public sentiment.

As in science, the availability of policy research can also be fraught, especially if those in the debate are not skilled in the use of evidence, or it is presented selectively. For example, the advocacy for access to medicinal cannabis on the basis of a small number of patients successfully treated, when the scientific evidence is insufficient on which to base a treatment benefit:risk decision. In this case, other factors including Federal party politics and potential economic gains for the states contributed to policy decisions.

A matter of approach

While science is based on rational thinking, policy literature refers to a concept known as ‘bounded rationality’, jargon that describes what really happens when policy makers have ‘unclear aims, limited information, and unclear choices’.  The term may come in handy next time you need to explain what turns out to have been a poor decision! Perhaps a new synonym for ‘uncertainty’? Policymakers use imperfect, and often ‘gut’ or emotion-based, short cuts to gather information and make decisions within a complex political environment.

Hence, it is unlikely that the robust scientific research which supports the development and introduction of a new medicine will be used in the same way when constructing public policy. While evidence plays a part in what is considered ‘good policy process’, it is in no way the whole show.

References available on request. Picture source