How a new health funding system could put power in the hands of patients

by Stephen Duckett

Published by The Australian Financial Review, Wednesday 19 March

Something called 2.0 often simply means a major upgrade, the next ­computer application that gives extra functionality but gobbles up all your disk space. Although there is some debate about the term Web 2.0, many take it to mean the emergence of collaborative, user-driven tools such as social networking sites, Wikipedia and blogs.

Is Healthcare 2.0 more like the former, an upgrade of the old, or is it to be something completely different? Web 2.0 is also sometimes seen as “old hat” with Web 3.0 or even 4.0 now around the corner.

As Health Minister Peter Dutton has asked, is a health funding system designed in the 1960s fit for purpose today? In those days, acute illnesses predominated; today we live in an era of chronic conditions, with many people suffering from multi-morbidity, or more than one chronic condition.

A second contemporary question is whether our old system of fee-for-­service payment, suitable for in-and-out visits to the GP, is the best way to encourage the continuity of care so important in management of chronic conditions.

In this context the recent debate about the option of grafting a $6 co-payment onto the existing fee-for-service paradigm is an unwelcome distraction. It does nothing to change system fundamentals, would disadvantage the most disadvantaged and may not raise any money at all. Instead, people might ­simply seek care at more expensive ­hospital emergency departments.

All health specialists have a laundry list of system upgrades we want to see. Mine includes the need to address the high out-of-pocket costs that mean many people cannot obtain essential care. We also need to improve hospital waiting times and mental health care, and use the skills of the health workforce better. Doing better on prevention and public health is also on the list.

The obesity epidemic won’t be solved by finger wagging and telling people to eat less and exercise more. Instead, we need to make healthy choices easy choices. This may mean giving people more information about packaged foods through improved food labelling and– dare I say it? – improved information about food composition as was avail­able on the website recently uploaded and just as quickly taken down. Raising the relative price of more calorie-dense foods and drinks may also have a role.

The obesity challenge highlights another issue for any health system upgrade, which is that many aspects of health policy have a poor evidence base.

The millions spent on health and medical research has primarily gone into the molecular world. Very little has been spent on finding out what works in the even more complex world of ­policy and practice. What must we do to address generational poverty and its consequences for poor health status? What should be done next, to reduce the number of indigenous babies with a low birth weight? Healthcare 2.0 needs to build an evidence base, and then roll out what works.


Healthcare 2.0 should be more than an upgrade, it should create the kind of transformation that social media has. Like Web 2.0, Healthcare 2.0 should seek to create a system that puts power in the hands of users.

People with chronic conditions live with their illness 24 hours a day, seven days a week. The health team visits them for a small fraction of that time. Healthcare 2.0 needs to help them to manage and become experts in their own conditions. Empowering the person with chronic disease, and their family and/or carers, should be at the heart of a new patient-centred health system.

But Healthcare 2.0 should not be about abandoning patients to their own resources. Self-management needs to be taught and supported. Personal responsibility does not occur in a vacuum: our ability to take control of our lives is shaped by previous experiences, the environment we now find ourselves in and our “health literacy” – our know­ledge of what impacts on our health.

Healthcare 2.0 should be seen as a collaborative endeavour between the patient and the community. It should be user-friendly and user-driven.

Articulating a goal is easy, getting there is hard. Healthcare 2.0 requires transformation of general practice toward multi-disciplinary teams that are rewarded for looking after people over months not minutes.

That requires new payment mechanisms such as some form of capitation payment (e.g. $x to look after a person with diabetes for a year) and enabling general practice to draw on wider community resources – in teaching patients self-management, for example.

Healthcare 2.0 means engaging both community and health sector in a conversation about the shape of the ­system. It requires moving past the idea a set of quick fixes about price signals or simple nostrums will solve system problems. It involves experimentation and research to find what works. It needs to build on the many strengths of the current system: universality, a network of qualified health professionals and the community’s goodwill toward Medicare.