tag:theconversation.com,2011:/ca/topics/primary-health-networks-15816/articlesPrimary Health Networks – The Conversation2016-04-03T20:12:46Ztag:theconversation.com,2011:article/548292016-04-03T20:12:46Z2016-04-03T20:12:46ZHow to reform primary health care to close the gap<p><a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/PHN-Home">Primary Health Networks</a> were established in 2015 to reform the primary health-care system and better coordinate care across Australia. </p>
<p>A range of services make up the primary care system in Australia. These include private general practices, community health centres within hospitals, and Aboriginal community-controlled health services. There are 31 primary health network boundaries across Australia, managed by a local board and funded by the Australian government. </p>
<p>A core focus for primary health networks is to understand the health-care needs of their communities, identify service gaps and focus on patients at risk of poor health outcomes. Among the <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/health-mediarel-yr2015-ley036.htm">priority patient groups</a> are Aboriginal peoples and Torres Strait Islanders. </p>
<p>Recently, funding to primary health networks for <a href="http://www.dpmc.gov.au/indigenous-affairs/publication/closing-gap-prime-ministers-report-2016">ice and mental health programs</a> was announced. This came with the expectation that primary health networks will work closely with Aboriginal community-controlled health services “to make sure we get those Indigenous treatment services right”, <a href="https://www.pm.gov.au/media/2015-12-06/joint-doorstop-interview-sydney">according to the</a> minister for rural health. </p>
<p>The new <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/health-mediarel-yr2016-ley021.htm">Health Care Home trials</a> will also involve Aboriginal health services. This requires primary health networks to collaborate with these services to build relevant patient health-care pathways. How can primary health networks work closely with these services?</p>
<h2>What are Aboriginal community-controlled health services?</h2>
<p>Aboriginal community-controlled health services are authorities on primary health care and do much more than just deliver clinical services. First <a href="http://www.naccho.org.au/about-us/naccho-history/">established in 1971</a> and now numbering 150, they connect with disadvantaged community members, strengthen the resilience of the community and provide culturally appropriate comprehensive care. Importantly, they foster the participation of Aboriginal communities in their own primary health care. </p>
<p>Aboriginal people have the poorest access to primary health care, shown by their high rate of <a href="http://www.myhealthycommunities.gov.au/our-reports/potentially-preventable-hospitalisations/december-2015">potentially preventable hospitalisations</a>. This statistic measures the rate of hospitalisation for health conditions that could have been prevented if primary health care was accessible and appropriate. </p>
<p>Nationally, Aboriginal and Torres Strait Islanders in remote locations have <a href="https://www.dpmc.gov.au/sites/default/files/publications/Aboriginal%20and%20Torres%20Strait%20Islander%20HPF%202014%20-%20edited%2014%20Oct%202015.pdf">seven times the rate</a> of potentially preventable hospitalisations compared to non-Indigenous Australians. If primary health networks are intent on reducing the high rate of preventable hospitalisations in their region, their attention must turn to forming partnerships with Aboriginal community-controlled health services.</p>
<p>Aboriginal community engagement has too often been an <a href="http://www.healthinfonet.ecu.edu.au/key-resources/bibliography/?lid=17088">afterthought</a> in aid of ticking a box. It has ranged from Aboriginal people merely being informed of what is happening <em>to</em> them, to being partners, to being entirely in control of programs.</p>
<h2>How to better work together</h2>
<p>To rebuild our primary health-care system to better respond to Aboriginal and Torres Strait Islander people, primary health networks <a href="https://www.mja.com.au/journal/2016/204/6/primary-health-networks-and-aboriginal-and-torres-strait-islander-health">need to do a few things</a>.</p>
<p>First, they should make a commitment to collaborate with Aboriginal community-controlled health services and establish a specific Aboriginal and Torres Strait Islander steering committee. This way they will be more able to focus on the right <a href="https://www.humanrights.gov.au/sites/default/files/content/pdf/social_justice/health/partnership_position_paper.pdf">Aboriginal health priorities</a> and improve <a href="https://www.mja.com.au/journal/2016/204/6/primary-health-networks-and-aboriginal-and-torres-strait-islander-health">health outcomes</a>. Formalised partnerships with Aboriginal community-controlled health services have been shown to <a href="https://www.mja.com.au/journal/2015/202/9/strengthening-primary-health-care-achieving-health-gains-remote-region-australia">reverse the increasing trend</a> in Aboriginal hospital emergency department attendances. </p>
<p>Primary health networks need to help all services within their boundary to identify what health-care processes need to improve, help them improve the quality of care and help them <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/indigenous-nkpi-atsi-phc">monitor their performance</a>, just like Aboriginal community-controlled health services do. Strategic plans developed by primary health networks should be endorsed by representative Aboriginal bodies to show that the right service gaps are being addressed.</p>
<p>Multiple service providers (especially visiting in remote areas) can be ineffective, inefficient and undermine local efforts. Regional Aboriginal health networks need to be supported to deliver services. <a href="http://www.pc.gov.au/research/completed/efficiency-health">Innovative workforce substitution</a> also needs attention in remote areas, such as more Aboriginal health workers, nurse practitioners and physician assistants. </p>
<p>The <a href="http://www.aihw.gov.au/uploadedFiles/ClosingTheGap/Content/Our_publications/2015/ctgc-ip13.pdf">cultural competence</a> of all services needs to be improved, which includes expanding the Aboriginal workforce.</p>
<p>Mechanisms are already in place to <a href="https://www.health.qld.gov.au/atsihealth/transition_cc.asp">increase Aboriginal control</a> over certain remote government health services to improve Aboriginal people’s access to health care. Primary health networks should be aware of these transitional arrangements, align with these plans and make purchasing arrangements with existing Aboriginal community-controlled health services in their region wherever possible.</p>
<p>Primary health networks have good intentions to support peoples who are most in need. However, as the late Aboriginal health champion, <a href="http://www.naccho.org.au/download/naccho-historical/NACCHO%20Tribute%20edition.pdf">Dr Puggy Hunter</a>, described:</p>
<blockquote>
<p>we go to bed with these people and we wake up with them on top of us.</p>
</blockquote>
<p>Good intentions need to be followed up so that policymakers and the community can monitor the level and type of engagement. Primary health networks need to establish proper partnerships that allow the Aboriginal and Torres Strait Islander community to play an active part in their own health care. It leads to much better programs.</p><img src="https://counter.theconversation.com/content/54829/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sophia Couzos does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How can primary health networks work closely with Aboriginal services to ensure health care is appropriate and culturally competent?Sophia Couzos, Public Health Physician and Associate Professor General Practice and Rural Medicine, James Cook UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/570352016-03-31T06:55:43Z2016-03-31T06:55:43ZTime for better chronic disease management in primary care<figure><img src="https://images.theconversation.com/files/116847/original/image-20160331-28476-1egothl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government's proposed changes are good, and evidence based, but whether they will work in practice is another thing.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/downloading_tips.mhtml?code=&id=332819000&size=huge&image_format=jpg&method=download&super_url=http%3A%2F%2Fdownload.shutterstock.com%2Fgatekeeper%2FW3siZSI6MTQ1OTQxMjM4MCwiYyI6Il9waG90b19zZXNzaW9uX2lkIiwiZGMiOiJpZGxfMzMyODE5MDAwIiwiayI6InBob3RvLzMzMjgxOTAwMC9odWdlLmpwZyIsIm0iOiIxIiwiZCI6InNodXR0ZXJzdG9jay1tZWRpYSJ9LCJJK0NOcVp5ZFJRamI5TE1OTVovb0EwUWpoMHMiXQ%2Fshutterstock_332819000.jpg&racksite_id=ny&chosen_subscription=1&license=standard&src=7TRH99pC7A3yZxDSR-tvKg-1-2">from www.shutterstock.com.au</a></span></figcaption></figure><p>Living with a chronic disease, such as heart disease, diabetes or asthma, is hard work. Today the federal government <a href="http://www.abc.net.au/news/2016-03-31/turnbull-says-medicare-changes-will-help-health-system/7286474">announced</a> its intention to “<a href="http://sussanley.com/%EF%BB%BFa-healthier-medicare-for-chronically-ill-patients/">revolutionise</a>” the way chronic diseases and complex conditions are cared for. </p>
<p>Details are thin about what this health care revolution will look like. And while the early signs are promising, the task ahead is large.</p>
<p>The report of the <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/primary-phcag-report">2015 Primary Health Care Advisory Group</a>, released today, includes recommendations to change the way health care is managed and funded. </p>
<p>Three key concepts seem to drive the recommendations – the need for continuity of care, flexible modes of delivery of health care and data to drive continuous quality improvement.</p>
<p>The key enablers to drive this reform are:</p>
<ul>
<li>patient registration (when a patient nominates a preferred practitioner and practice for care and attends there for health care)</li>
<li>multidisciplinary teams</li>
<li>data sharing between health care providers, planners and funders </li>
<li>a new funding mechanism (bundled payments rather than fee-for-service). </li>
</ul>
<p>All ideas are evidence-based and none are new. Evidence supporting these types of interventions has existed since the development of the <a href="http://content.healthaffairs.org/content/28/1/75.short">Chronic Care Model</a> in 1990s. </p>
<h2>How would the changes affect people with chronic conditions?</h2>
<p>If you are one of the 65,000 patients from one of the 200 practices that takes part in the proposed trial what can you expect? </p>
<p>Most probably you will have to agree to register with the practice for your chronic disease health care and agree to attend that practice for care. In return, you are likely to receive access to a multidisciplinary team and you will have more options about how you receive health care. </p>
<p>If all goes well, you would have fewer trips to the clinic, your conditions would be monitored more closely using more intelligent medical software systems and you would feel cared for, known about and healthy. </p>
<p>You would have access to good information about your health care conditions and you would always feel well informed. You would know that your health-care providers were also well informed.</p>
<p>When you needed care, you would get it. It might be via secure email, phone or web rather than face to face. And less time spent in waiting rooms. </p>
<p>If all this goes well – and the medications and lifestyle changes suit you, and you are well-supported and co-ordinated – chances are you will spend less time in hospital due to your chronic illness flaring up or complications developing. </p>
<h2>What gets in the way of achieving these outcomes?</h2>
<p>Some lessons can be learned from the 1994 <a href="https://www.mja.com.au/journal/2002/177/9/australian-coordinated-care-trials-success-or-failure">co-ordinated care trials</a>, which tested different models for co-ordinating care, and the more recent <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/eval-rep-dcp">diabetes care project</a>, which tested whether care plans, data-driven feedback, flexible funding and case management could lead to improved diabetes care. </p>
<p>The co-ordinated care trials showed some promise but were <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/CIB/cib9899/99CIB11#Major">costly to implement</a> and too costly to scale up. They were difficult to replicate and few were sustained outside the trial environment. </p>
<p>The impact of the diabetes care project was also disappointing. The diabetes care project included many of the elements suggested in today’s report, such as bundled payments, yet only small gains were made in health outcomes and the cost-effectiveness of the model was not proven. The bundled payment used in the diabetes care project was viewed as inadequate. </p>
<p>Making improvements in chronic disease management is going to require strong buy-in from all stakeholders. The newly proposed model is the first step towards practices being held accountable for health-care outcomes. This must be done in a way that enhances rather than damages the patient-practitioner relationship.</p>
<p>One of the biggest challenges will be to work out exactly how much the government should pay a practice for providing a person with all their chronic disease care in a year. The report recommends that the payment should take into account complexity, using a three-tiered system. Addressing complexity is essential. It’s also where the whole concept could become unstuck. </p>
<p>GP payment is a another potential sticking point. Working out how an individual GP will get their fair share of the chronic disease payment is likely to make for interesting negotiations and new ways of working for practice managers. Female GPs will be vulnerable to further pay inequities as they are less likely to be practice owners and more likely to work part-time.</p>
<p>It is also not clear whether the recommended “bundled payment” would include more radical models whereby the practice has to fund payment for pathology, imaging and medications from the “bundled payment”. </p>
<p>The caveat that fee-for-service visits can be charged for episodic care unrelated to the chronic condition presents another challenge. While it makes sense that not all care is related to a chronic condition, allowing fee-for-service payments alongside the bundled payment reduces the likely cost-effectiveness of any proposed model. This is especially so if this is done in a way that requires administrative and clinical time to be spent deciding whether it is an “unrelated” condition, or not. </p>
<p>It will be a challenge to get eligible practices and patients to sign on to the trial. This took much time and effort in the co-ordinated care trials and the diabetes care project. There will need to be very clear messaging that engages practices and consumers and explains just what they stand to gain (and lose) from the proposed changes. <a href="http://www.health.gov.au/internet/main/publishing.nsf/content/primary_health_networks">Primary Health Networks</a>, regional bodies that coordinate care, should be able to play a key role here. </p>
<p>It will be important to recognise the diversity of practices and the regional differences. Ensuring new payment models reduce inequity will require careful use of weightings to adequately reward the practices caring for disadvantaged groups. </p>
<p>The final challenge will be around the use of routinely collected clinical data to monitor health outcomes. Using clinical data to develop the prediction tools and real-time clinical decision support alluded to in the report will require ongoing investment in the expertise and IT infrastructure required to do this work. </p>
<p>The Australian health care system is currently served by multiple clinical software systems across the primary care and hospital sectors. At present it is difficult to link the data to make sense of the entire patient journey. </p>
<p>Health care should make life easier, not harder. The proposed reforms are promising and long overdue. They will be challenging to implement but the time has come to do so.</p><img src="https://counter.theconversation.com/content/57035/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jane Gunn receives funding from the National Health and Medical Research Council for trials of new models of care for depression and diabetes. She is on the Board of Eastern Melbourne PHN. She is a member of the National Prescribing Service Data Governance Advisory Committee.</span></em></p>Living with a chronic disease is hard work. Today the federal government announced its intention to “revolutionise” the way chronic diseases and complex conditions are cared for.Jane Gunn, Head of Department of General Practice, Chair of Primary Care Research, Deputy Head, Melbourne Medical School, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/441412015-07-15T02:42:47Z2015-07-15T02:42:47ZForget health takeovers, here’s how to fix hospital funding and chronic disease care<figure><img src="https://images.theconversation.com/files/88275/original/image-20150713-11795-chueho.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Public hospital funding is in a critical condition.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-280536563/stock-photo-empty-hospital-cot-in-a-corridor.html?src=mCMExOTXOnVDqrAEYkstyA-1-139">Anna Jurkovska/Shutterstock</a></span></figcaption></figure><p>After a shaky start, the Commonwealth government is finally starting a debate about how Australia’s future health system should look. Next week, the prime minister and premiers will <a href="https://www.coag.gov.au/sites/default/files/COAG%20Communique%2017%20April%202015.pdf">meet to discuss</a> some big reform options, such as a radical centralisation or devolution of health care. It looks like Treasurer Joe Hockey <a href="http://www.afr.com/news/politics/raise-the-gst-and-fund-yourselves-treasurer-joe-hockey-to-tell-states-20150714-gibked">will ask the states</a> to take responsibility for their budgets and wholly fund public hospitals. </p>
<p>But don’t bet on radical, single-level-of-government health takeovers. History suggests that proposals to shift health responsibilities are likely to languish in the Department of Prime Minister and Cabinet’s <a href="https://federation.dpmc.gov.au/publications/discussion-paper">draft federalism green paper</a>, which was leaked then released last month.</p>
<p>Public hospitals and chronic care both need serious reform, but there are more realistic ways to achieve it. Demand for hospital services has grown rapidly and public hospitals have <a href="https://www.acem.org.au/getattachment/a66b1406-53d1-4c9e-a064-c62bc90e3bd5/S47-Statement-on-Ambulance-Diversion.aspx">struggled</a> to keep up. In the community, people with chronic diseases receive <a href="https://theconversation.com/time-for-policy-rethink-as-frequent-gp-attenders-account-for-41-of-costs-38966">fragmented care</a> from separate and disconnected providers. </p>
<p>Successful change in these areas requires the right funding structures and incentives. The green paper contains two ideas that could work and these should be the focus of the leaders’ discussions on health.</p>
<h2>Public hospital funding</h2>
<p>Australia’s health funding system is mostly an accident of history. The Commonwealth has ended up the major funder of medical practice outside hospitals, and states are responsible for managing and planning public hospitals. </p>
<p>The Commonwealth, however, contributes about 40-45% of public hospital costs and can, as it did in the 2014 budget, <a href="https://theconversation.com/budget-takes-hospital-funding-arrangement-back-to-the-future-26701">slash its contribution at whim</a>. The 2014 budget shredded the Commonwealth’s previously bipartisan commitment to share the costs of growth in hospital services, reverting to a formula based on state populations.</p>
<p>One idea in the federalism green paper improves on the previous bipartisan commitment in the <a href="http://www.federalfinancialrelations.gov.au/content/npa/health_reform/national-agreement.pdf">2009 National Health Reform Agreement</a>. It proposes a Hospital Benefit Schedule. Like the <a href="http://www.mbsonline.gov.au/internet/mbsonline/publishing.nsf/Content/Home">Medicare Benefits Schedule</a>, which sets the fees for GP visits and procedures, a Hospital Benefits Schedule would set the level of Commonwealth funding for public and private hospital services. </p>
<p>The change could produce a welcome return to shared incentives by exposing both the Commonwealth and states to the cost of growing demand for hospital care. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/87744/original/image-20150708-31595-967a9l.jpg?ixlib=rb-1.1.0&rect=1202%2C579%2C3693%2C2528&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/87744/original/image-20150708-31595-967a9l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/87744/original/image-20150708-31595-967a9l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/87744/original/image-20150708-31595-967a9l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/87744/original/image-20150708-31595-967a9l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/87744/original/image-20150708-31595-967a9l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/87744/original/image-20150708-31595-967a9l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Commonwealth contributes about 40-45% of public hospital costs and can slash its contribution at whim.</span>
<span class="attribution"><a class="source" href="http://one.aap.com.au/">Nikki Short/AAP</a></span>
</figcaption>
</figure>
<p>However, a few criteria need to be met. First, a new Hospital Benefits Schedule should give both sides good reason to keep growth in hospital services under control. </p>
<p>Under the changes in the 2014 Budget, the Commonwealth’s payments to states for hospitals are unrelated to growth in public hospital costs. Because of this, the Commonwealth now has less reason to fund primary care, which keeps people healthy and out of hospital. It’s already cut back funding for primary care through a <a href="https://theconversation.com/high-cost-of-gp-rebate-freeze-may-see-co-payments-rise-from-the-dead-38786">freeze</a> to the Medicare Benefits Schedule.</p>
<p>In effect, the Commonwealth is shifting some costs onto public hospitals, where states bear more of the burden. In response, the states can be expected to fight back, shifting costs the other way. </p>
<p>States can (and do) bill hospital services to the <a href="http://www.mbsonline.gov.au/internet/mbsonline/publishing.nsf/Content/Home">Medicare Benefits Schedule</a>, so that the Commonwealth picks up the tab. But there would also be problems if the states paid too little for hospitals. They would be free to build vote-winning hospitals without worrying too much about whether they are run efficiently or used unnecessarily. </p>
<p>As well as having skin in the game, both sides need more certainty about how public hospitals will be funded. Health systems can’t be planned and managed well if hospital funding agreements can be unilaterally revoked, as happened last year. The new Hospital Benefits Schedule should be set and adjusted by an independent body, such as the <a href="http://www.ihpa.gov.au/">Independent Hospital Pricing Authority</a>. The funding split should be fixed over the medium term, say ten years, and locked in with legislation.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/87733/original/image-20150708-31569-t45drf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/87733/original/image-20150708-31569-t45drf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=481&fit=crop&dpr=1 600w, https://images.theconversation.com/files/87733/original/image-20150708-31569-t45drf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=481&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/87733/original/image-20150708-31569-t45drf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=481&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/87733/original/image-20150708-31569-t45drf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=604&fit=crop&dpr=1 754w, https://images.theconversation.com/files/87733/original/image-20150708-31569-t45drf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=604&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/87733/original/image-20150708-31569-t45drf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=604&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">If states contribute too little to hospital funding, there’s little incentive to ensure they run them efficiently.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/defenceimages/9183294751/">UK Ministry of Defence/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Finally, the new shared and secure funding agreement should encourage efficiency. The current <a href="http://www.ihpa.gov.au/internet/ihpa/publishing.nsf/Content/national-efficient-price-determination-lp">pricing system</a> for hospital procedures essentially uses the average price across all hospitals. Including inefficient hospitals in this average lets wasteful practices drive up funding across the whole system.</p>
<p>The Grattan Institute’s 2015 report, <a href="http://grattan.edu.au/report/controlling-costly-care-a-billion-dollar-hospital-opportunity/">Controlling Costly Care</a>, shows that about A$1 billion a year could be saved by tightening up state pricing practices. The Hospital Benefit Schedule should use the same approach at the Commonwealth level. Instead of setting prices at the average cost across all hospitals, excessive and avoidable costs should be left out.</p>
<h2>Care for people with chronic illnesses</h2>
<p>A second key challenge facing our health system is how to improve the quality of care for people with chronic illnesses, and to do it at a <a href="https://theconversation.com/people-with-chronic-illness-short-changed-by-fragmented-system-federalism-paper-35393">reasonable cost</a>. </p>
<p>The current GP funding system pays for atomised, episodic care. The majority of payments are on a fee-for-service basis, rewarding GPs for visits instead of continuity of care, quality of care, or health outcomes. </p>
<p>General practice should be the cornerstone of good care, but people with chronic illnesses need a wide range of primary health services. When care for people with chronic illnesses isn’t multidisciplinary, patients will keep shuttling between different health care providers without a coherent health care plan. The result is waste from duplicated tests, treatments and appointments, and lower quality of care.</p>
<p>The federalism green paper proposes a funding solution to this problem. The Commonwealth and states would jointly fund “packages of care” for people with chronic diseases or complex conditions. The packages would cover GP visits, specialist appointments, hospital care and allied health care.</p>
<p>This option would also create a system of <a href="http://www.afr.com/news/policy/health/new-funding-model-for-gps-to-replace-copay-20150302-13sfzb">blended payments</a>, in which a doctor would receive some payments on a fee-per-service basis and some for looking after a patient for over a year, or even for achieving health outcomes. The approach is being tried in <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361085/">many other countries</a>, although the evidence on its effectiveness is <a href="http://hsr.sagepub.com/content/6/1/44.short">not yet clear</a>.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/87737/original/image-20150708-31604-je1wkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/87737/original/image-20150708-31604-je1wkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/87737/original/image-20150708-31604-je1wkl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/87737/original/image-20150708-31604-je1wkl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/87737/original/image-20150708-31604-je1wkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/87737/original/image-20150708-31604-je1wkl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/87737/original/image-20150708-31604-je1wkl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Care for people with chronic illnesses must be multidisciplinary.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/dfid/16768375614/">DFID/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>Pooling Commonwealth and state funding could help promote seamless, coordinated health care. Blending payments seems like a good way to focus health care professionals on helping patients look after their health between visits. But the green paper is not clear about how these new packages would be managed.</p>
<p>The new <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/primary_Health_Networks">Primary Health Networks</a>, which took on their responsibilities on July 1, could manage these packages of care. To do it well, the networks should be neutral, allocating both Commonwealth and state funding without belonging to one level of government. </p>
<p>By coordinating chronic disease packages, Primary Health Networks can be built up and tested. If a few participating networks demonstrate good outcomes from pooling funding for people with chronic disease, the approach can be expanded to other types of patient. </p>
<p>Eventually, Primary Health Networks might purchase all the primary and outpatient care in their region. But before contemplating this scenario (an option the green paper raises), they should build their capacity and demonstrate their worth on a more modest scale.</p>
<p>Remaking the federation was never going to be easy. But rather than trying to do the impossible, the prime minister and premiers should focus on two options that point to a better future and that have a half-decent chance of actually happening.</p><img src="https://counter.theconversation.com/content/44141/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Duckett has received funding from the Australian Research Council and the National Health and Medicare Research Council to examine aspects of hospital funding. He is a consultant to the Independent Hospital Pricing Authority and a member of a number of its committees.</span></em></p><p class="fine-print"><em><span>Peter Breadon does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Any health reform proposals should start by addressing public hospitals and chronic care. But successful change in these areas requires getting the state-Commonwealth funding and incentives right.Stephen Duckett, Director, Health Program, Grattan InstitutePeter Breadon, Health Fellow, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/392492015-04-01T19:11:22Z2015-04-01T19:11:22ZThe debate we’re yet to have about private health insurance<p><em>In the final instalment of our series <a href="https://theconversation.com/au/topics/private-health-insurance-in-australia">Private health insurance in Australia</a>, Lesley Russell asks whether Australians need private health insurance, and what a two-tiered system means for quality, access and equity.</em></p>
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<p>The <a href="https://theconversation.com/au/topics/private-health-insurance-in-australia">six previous papers in this series</a> highlight the poorly defined role private health insurance plays in the funding and delivery of Australian health care, and how the Abbott government might allow this role to expand.</p>
<p>But major changes to Australia’s iconic Medicare system should not happen by stealth. They require full analysis and debate about whether a more integrated public-private system is a feasible option that fits with Australian values and can improve efficiency in health care financing. </p>
<p>Successive governments of both persuasions have failed to convincingly articulate why Australians need what is increasingly a duplicate health care system – with duplicate costs for many – and why the federal financial contribution to private health insurance should be so substantial. The <a href="http://www.budget.gov.au/2014-15/content/bp1/html/index.htm">2014-15 Budget Papers</a> show the cost of the private health insurance rebate will grow from A$5.997 billion in 2013-14 to A$7.187 billion by 2017-18. </p>
<p>Private health insurance is variously seen as an essential feature of a “balanced” health care system comprising both publicly and privately funded and provided health care, or as an instrument of patient choice and responsibility that relieves the pressures in increasingly strained public services. </p>
<p>Most recently, the <a href="http://www.ncoa.gov.au/report/phase-one/recommendations.html">National Commission of Audit</a> (NOCA) has raised the possibility of requiring higher-income earners to take out private health insurance for basic health services in place of Medicare. Both the NCOA and the <a href="http://competitionpolicyreview.gov.au/files/2015/03/Competition-policy-review-report_online.pdf">Harper Competition Policy Review</a> advocate an expanded role and less regulation for the private health insurance sector.</p>
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<a href="https://theconversation.com/allow-aussies-to-opt-out-of-medicare-and-rely-on-private-health-insurance-38647">Allow Aussies to opt out of Medicare and rely on private health insurance</a>
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<p>These are ideological arguments and much of the dilemma facing those who would work to implement effective policy in this area is the dearth of information about what drives people to purchase health insurance and to use it.</p>
<p>Since 1999 a <a href="http://theconversation.com/private-health-insurance-means-test-passes-what-now-5356">raft of government initiatives</a> – financial carrots and sticks – have aimed to encourage more Australians, especially those who are better off, to purchase private health insurance. </p>
<p>For the most part, these were not evidence-based and consequently have had little or no impact. Only the Lifetime Health Cover Loading and the “run for cover” campaign <a href="http://www.researchgate.net/publication/4998560_Response_Run_for_Cover_Now_or_LaterThe_impact_of_premiums_threats_and_deadlines_on_supplementary_private_health_insurance_in_Australia">had an impact</a> and this has been interpreted as a response to a deadline and an advertising blitz, rather than a pure price response. </p>
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<a href="https://theconversation.com/private-health-insurance-carrot-and-stick-reforms-have-failed-heres-why-38501">Private health insurance 'carrot and stick' reforms have failed – here's why</a>
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<p>University of Adelaide economist Terence Cheng has <a href="https://www.melbourneinstitute.com/downloads/policy_briefs_series/pb2013n03.pdf">estimated</a> the price elasticity of demand and found that a 10% increase in premiums would result in a reduction in private health insurance coverage of less than 2%. So most Australians who have private health insurance would retain it even if the rebate was completely dropped.</p>
<p>The prevailing wisdom is that people purchase private health insurance to have their choice of doctor and hospital facilities, but as <a href="https://theconversation.com/explainer-why-do-australians-have-private-health-insurance-38788">researcher Sophie Lewis and her colleagues at the University of Sydney</a> have found, it is really more about shorter wait times for hospital procedures, perceived quality of care and “peace of mind”. </p>
<p>Having private health insurance provides the ability to “jump the queue” to access a range of elective procedures in private hospitals. But this comes at a price for all patients. </p>
<p>People with private health insurance are likely getting services ahead of people without insurance but with greater need. The private patient who gets their orthopedic or cataract surgery within weeks rather than months will very often end up with substantial, unexpected out-of-pocket costs. </p>
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<a href="https://theconversation.com/explainer-why-do-australians-have-private-health-insurance-38788">Explainer: why do Australians have private health insurance?</a>
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<p>Contrary to government claims, the increase in services delivered in private hospitals has <a href="https://theconversation.com/private-health-insurance-carrot-and-stick-reforms-have-failed-heres-why-38501">done nothing to ease</a> the pressure on public hospitals and in fact waiting times for urgent procedures in public hospitals has increased. </p>
<p>Private health insurance does not buy extra quality and safety either. The <a href="http://www.pc.gov.au/inquiries/completed/hospitals/report/hospitals-report.pdf">Productivity Commission</a> found that the larger, most comparable public and private hospitals have similar adjusted premature death ratios. And team-based care in large public hospitals means better care coordination.</p>
<p>The peace of mind that private health insurance is supposed to bring is very often illusionary. Sometimes it’s the realisation that certain procedures or prostheses are not covered; more often it’s the shock of unexpected out-of-pocket costs. More than 20% of private care is paid for by <a href="http://phiac.gov.au/wp-content/uploads/2014/10/PHIAC-Annual-Report-2013-14.pdf">patients’ out-of-pocket costs</a>, which in 2014 averaged A$285 per hospital episode.</p>
<p>The mix of levies, surcharges and rebates – and funds that constantly change their policies – make it difficult for even astute consumers to judge the true cost and value of their private health insurance. </p>
<p>In fact, many people <a href="https://theconversation.com/explainer-why-do-australians-have-private-health-insurance-38788">know little</a> about the policy they purchase – what it covers, how much it covers, whether it is good value and suited to their needs. </p>
<p>The Commonwealth government’s decision to subsidise private health insurance means it has a substantial financial stake in the private sector alongside its existing stake in the public sector. However, while there are incentives to encourage the purchase of private health insurance, there is no requirement for it to be used. </p>
<p>About a quarter of people with private health insurance choose to <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/4839.0.55.0012009">use the public system</a>. Therefore, a significant proportion of the private health insurance rebate is effectively wasted as people purchase cover for financial rather than health reasons.</p>
<p>Public policy experts <a href="https://cpd.org.au/wp-content/uploads/2012/01/CPD_DP_Menadue_McAuley_PHI_2012.pdf">Ian McAuley and John Menadue</a> have made the case that private health insurance is an expensive and clumsy way to do what the tax system and Medicare does better: distribute funds to those who need health care and the effective management of health care costs. </p>
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<a href="https://theconversation.com/if-the-government-wants-price-signals-it-should-stop-supporting-health-insurance-38389">If the government wants price signals, it should stop supporting health insurance</a>
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<p><a href="http://www.oecd.org/els/health-systems/33698043.pdf">International evidence</a> shows that private health insurance decreases cost controls and it <a href="http://johnmenadue.com/blog/?p=2884">has been argued</a> that gap insurance has underwritten the dramatic growth in specialist fees. Further, pushing higher income earners (who generally have better health) to take out private health insurance, and then increasingly prejudicing access to services in their favour ensures a <a href="http://www.euro.who.int/__data/assets/pdf_file/0007/96433/E89731.pdf">widening of existing health disparities</a>.</p>
<p>In the absence of a clearly stated and managed role for private health insurance – either as competitor or collaborator – it is effectively undermining the power of Medicare as a single payer and the role of Medicare as a universal provider. This situation is predicted to unravel further, as the Abbott government <a href="http://www.news.com.au/national/private-health-insurers-set-to-manage-patients-gp-care/story-fncynjr2-1227031109206">signaled</a> its agenda to allow private health insurance to play an expanded role in primary care. </p>
<p>Some of larger funds are already expanding their activities in this sector, but with little oversight. </p>
<p>Last year Medibank Private began a program in Queensland that guarantees Medibank members same day GP appointments, fee-free care, after-hours GP visits and a range of health assessments. Medibank <a href="http://www.smh.com.au/business/medibanks-first-numbers-from-gp-trial-20141016-1175sp.html">claims</a> the trial is operating within the bounds of the law because it pays only for administrative costs, as opposed to funding the doctors directly. </p>
<p>The concerns this raises about the generation of a two-tiered health system are further fuelled by the possibility that private health insurance funds were <a href="http://www.news.com.au/national/private-health-insurers-set-to-manage-patients-gp-care/story-fncynjr2-1227031109206">eligible to tender</a> to run the new Primary Health Networks.</p>
<p>It’s an indictment of the passivity of federal government policymakers that private health insurance funds are more willing to kick start the innovative initiatives that are needed to deliver more proactive preventive care, better care coordination and a greater focus in health outcomes. </p>
<p>It’s more troubling that these initiatives are currently occurring in a policy vacuum with a narrow focus on solutions led by the funds for the benefit of their members. This will not assist the millions of Australians who don’t have private health insurance and could have a major impact on the equity and efficiency of the health care system and the budget bottom line.</p>
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<p><em>If you missed any <a href="https://theconversation.com/au/topics/private-health-insurance-in-australia">Private Health insurance in Australia</a> articles or our <a href="https://theconversation.com/infographic-a-snapshot-of-private-health-insurance-in-australia-39237">infographic</a>, visit the <a href="https://theconversation.com/au/topics/private-health-insurance-in-australia">series page</a>.</em></p><img src="https://counter.theconversation.com/content/39249/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lesley Russell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the final instalment of our series, Lesley Russell asks whether Australians need private health insurance, and what a two-tiered systems means for quality, access and equity.Lesley Russell, Adjunct Associate Professor, Menzies Centre for Health Policy, University of SydneyLicensed as Creative Commons – attribution, no derivatives.