The poor health indicators of our current campaign

by Stephen Duckett

Published by The Australian Financial Review, Page 47, Tuesday 27 August 2013

It’s now week four of the campaign and health policy is like the man in a famous children’s poem: Yesterday upon the stair, I met a man who wasn’t there, He wasn’t there again today, Oh, how I wish he’d go away. But opinion polls show “health and hospitals” is in the top three issues for voters. They obviously don’t want the missing policy to go away.

It’s not that the major parties haven’t announced policies on health, and in the case of the Liberals, their capital P Policy. It’s just that there’s not much there.

The Liberal’s policy is the epitome of a “small target” strategy, designed not to frighten anyone but the bureaucrats in the Commonwealth Health Department and agencies that might be chopped. The policy is full of “We’ll continue to do” this and that ,and high-sounding rhetoric. The party’s values are clear: private health insurance is in their DNA. The burden on public hospitals will be alleviated by increasing the health insurance rebate “as soon as fiscal circumstances allow”. There is welcome support for general practice training, speedier subsidies for new drugs and a reaffirmed commitment not to reduce health research expenditure. Sunday’s launch also included health promises, most notably indexation of seniors’ health benefits. In total the Liberal spend is reported as around $600 million over the forward estimates.

In contrast, Labor has announced dozens of smaller initiatives, not organised or reported as a coherent whole but totalling around $500 million over the forward estimates. Front and centre to the Labor vision is around $300 million hospital capital spending. “No marginal electorate shall live without a public hospital expansion” seems to be the slogan. They are probably all worthy initiatives but the tragedy is that if the Commonwealth is to be in the hospital capital funding business, a better policy would be to incorporate funding of depreciation into activity based funding.

A second big theme is support for medical and health research, which is more generous than the Liberals’, including funding to support the first steps of commercialisation of bench-top research. Finally, Labor has a sprinkling of programmatic confetti ($3.2 million for arthritis, money for a couple of health centres, an infectious diseases program), and a $50 million stroke co-ordinator program.

In the context of $130 billion spent on health care in 2011 ($56 billion from the Commonwealth), both sets of promises are small beer.

Worryingly, neither large party has a plan to grapple with the major issues in the health system.


Although it is good by most international comparisons, it is not perfect. There are real problems. Patients wait too long for hospital care. Financial barriers are re-emerging with about one in seven city dwellers and one in three people in remote communities reporting that cost prevents them either seeing a doctor or filling a prescription. We focus much more on treating health problems rather than tackling their causes.

Health care is complex and good policies rarely make good sound bites, but at a time when economic issues rank first, the good news is that money can be saved and services improved in the health sector. If you want a three word slogan, “Stop the Waste” can readily apply.

Grattan Institute’s 2013 report shows that if Australia benchmarked Pharmaceutical Benefit Scheme prices against New Zealand and two Australian state hospital systems, the PBS could save $1.3 billion each year. The government has picked up on one aspect of the report by speeding up price reductions, but we could still save $1 billion a year.

There’s more to waste than just high prices. Tests are duplicated unnecessarily, outdated and superseded treatments are still used, and health professionals spend their time doing work that could be done just as well by staff with less training. Waste also occurs when treatment does not follow best-practice guidelines. The Australian Care Track study showed that best-practice care was not the norm for many common conditions: for osteoporosis only 55 per cent of patients received best-practice care.

Wasteful spending means less money to spend on high priority needs. Two broad clusters of problems need addressing. First is access. Medicare, despite its benefits, hasn’t fixed all the access problems. As mentioned above, financial barriers are still important, and geographical inequity also needs to be addressed.

The second cluster of problems is about matching contemporary health care to contemporary health needs.

In the last 50 years we’ve built a health system that is really good at dealing with urgent health issues that can be compartmentalised by sub-specialty. But this success creates new health needs.

People are living longer, yet more people have chronic disease and multiple health problems. The current system encourages treating these different problems with multiple separate visits to multiple specialists. We don’t have a model of integrated health care, bringing together different types of care, with the patient in the centre. The system should be redesigned to support the patient’s needs, not designed around the separate skills of multiple providers. One aspect of this fragmentation is that mental health care continues to be a poor cousin of physical illness services, poorly integrated and with cost effective interventions and service reconfigurations still sitting in the policy waiting room. Finally, indigenous health status is a disgrace and requires urgent action.

Health policy doesn’t have to be a bottomless money-pit at election time. Australia needs a health plan that tackles waste and reinvests it to improve access and realign health care to meet today’s health needs. These are vital issues. Sadly we still don’t know whether and how either party will tackle them.