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Forget the blame game, let’s focus on making health dollars go further

The latest round of the health blame game is in full swing, with service cuts to Victorian hospitals, and neither the state nor federal government taking responsibility. Commonwealth and Victorian health…

We need to reduce waste and inefficiency in the health system. Image from shutterstock.com

The latest round of the health blame game is in full swing, with service cuts to Victorian hospitals, and neither the state nor federal government taking responsibility. Commonwealth and Victorian health ministers Tanya Plibersek and David Davis met in Canberra on Wednesday for more talks, but were unable to come to a resolution.

Promises that the current round of health reforms would eliminate the blame game are yet to be realised. Even if the National Health and Hospitals Reform Commission had its way and the Commonwealth provided 100% of hospital funding, funds would still be scarce and local politicians facing cuts would blame the Commonwealth.

There will always be fights about money and funding in any health system in any country. These fights may be more politicised in Australia, given the structure of the federation and health-care funding arrangements. But rather than getting caught up in the political arguments, we should be looking more closely at how we can use the health-care resources we have to save more lives.

Time for real health-care reform

The real reasons why hospitals seem to be in continuous deficit are simply not yet being tackled by the current health-care reforms. Adjusted for inflation, public hospital expenditure in Australia increased by an average of 8.2% a year between 2009 and 2011. Yet there are no clear signs that productivity or health outcomes are increasing at the same rate.

The current health-care reform process is, nevertheless, very important, as it is making some “architectural” changes to the system that may alter the way we think about costs (through activity-based funding) and performance (through the National Health Performance Authority). More transparent measurement and reporting of costs, outcomes and performance is essential for progress, but reform still needs to go a long way before any real differences are made on the ground.

Workforce inflexibility

One of the key reasons for inefficiency in our health workforce is that doctors, nurses and allied health professionals are shackled by professional silos that dictate what tasks (prescribing, tests and procedures) they can and cannot do, regardless of their ability to perform these tasks.

Australia’s health workforce is also imprisoned by a fee-for-service system that discourages teamwork, discourages task-shifting, and creates the wrong incentives for treating burgeoning levels of chronic disease. If doctors were able to spend less time undertaking tasks that nurses or other health professionals could competently do, their time could be devoted to those who would benefit the most – at very little additional cost.

Though these inflexibilities are sometimes justified by arguments about maintaining safety and quality of care, this needs to be balanced against the additional illness and the lives lost from an inflexible workforce. Giving up a few tasks will not put doctors out of a job; after all, there are plenty of other patients on waiting lists for care.

Waste and over-diagnosis

Part of the problem is waste and over-diagnosis. Many activities in the health system are being undertaken with no or little benefit to patients. This includes screening for abnormalities that will never cause symptoms or death, or for which treatments may cause more harm than good (such as PSA testing for prostate cancer).

A study published recently in the Medical Journal of Australia found that 150 potentially ineffective or unsafe services were currently funded by Medicare. This type of inefficiency is inexcusable and hugely costly. Local data isn’t available but at least 20% of health expenditure in the United States is lost to waste.

Waste and over-diagnosis continue for a range of reasons. Psychological biases mean health-care providers are much more likely to trust their own intuition and past experience when considering treatment options than adopt new evidence, making behaviour change slow and difficult. The dissemination of new and existing evidence should be fundamental to clinical practice.

Optimistic bias is another reason health policymakers and clinicians are more likely to over-emphasise the likely benefits of new treatments and not think too much about the costs. This explains the regular Medicare cost blowouts and the march of technological advances into screening, new pharmaceuticals, and e-health. Arguments about the potential to save lives are pervasive, while arguments about costs are viewed as negative.

Other solutions

It’s clear we need to stop funding services and tasks that are of no benefit to patients. Releasing these funds and directing them to more cost-effective services will save more lives. This seems to be a no-brainer, yet Australia’s health system still struggles to make real progress in this area.

Though many health policy experts tend to discount the role of financial incentives, this is one area that deserves further investigation. But linking good performance to financial incentives seems a long way off; first, we need to routinely measure health outcomes and the value of services.

The most important and potentially most intractable issue is that measures to reduce workforce inflexibility, waste and over-diagnosis need to be led by clinicians and supported by governments if they are to work and be adopted.

It is not the blame game that causes inefficiency and leads to cuts in services. Seemingly random cuts to health services could be avoided if progress was made on the real issues facing the health system. Doing things differently and doing less can save lives.

Join the conversation

17 Comments sorted by

  1. Trevor S

    Jack of all Trades

    "One of the key reasons for inefficiency in our health workforce is that doctors, nurses and allied health professionals are shackled by professional silos that dictate what tasks (prescribing, tests and procedures) they can and cannot do, regardless of their ability to perform these tasks."

    This is endemic across the workplace in nearly every sector of the workforce in Australia. The second you talk about workplace reform everyone assumes you want to cut their wages. Good luck trying to get any change, let alone anything actually significant....

    "Doing things differently"

    Woodrow Wilson summed that up nicely, "If you want to make enemies, try to change something" – Woodrow Wilson

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  2. David Arthur

    resistance gnome

    Thanks for this, Prof Scott.

    You write: "Even if the National Health and Hospitals Reform Commission had its way and the Commonwealth provided 100% of hospital funding, funds would still be scarce and local politicians facing cuts would blame the Commonwealth."

    With all due respect, that argument applies only in the short term. In the longer term, with the single level of political accountability established by getting the States out of hospitals altogether, then it will be readily apparent…

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  3. robin linke

    stamp dealer

    I have no doubt that Professor Scott has made very valuable suggestions for improving the efficiency of health care in Australia.
    Unfortunately howevermany such articles are published the health and pension costs incurred by the ageing population cannot be funded on the public purse.
    The following points are relevant:
    During the Menzies period there were 16 tax payers for every person on the pension. Today there are less than 5. Women had on average 3.5 children. Australian born women today…

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    1. Emma Anderson

      Artist and Science Junkie

      In reply to robin linke

      The global population is expanding well beyond sustainable proportions.

      In poorer countries, where reasons for seeking migration and asylum are also more common place, so is increased rates of childbirth.

      Yet despite your arguments about our aging population, and these facts, there continues to be a slur-filled (not from you) general debate against supporting immigrants and refugees in this country.

      Let working age people with kids come....apparently, they're needed here, and need our support. Call it a win-win.

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    2. robin linke

      stamp dealer

      In reply to Emma Anderson

      Emma, I am not clear on what the substance of your reply is. My thesis is that the current funding parameters for aged health costs, plus care and pensions are unfundable. We have not saved enough for a funded retirement of 20 years, we have not had enough children to work in aged care and with a 40% divorce rate we have crippled the family as the traditional support system. Hence my policy of using the family home to secure finance for the short fall. Either readers agree or disagree.
      Those…

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    3. Emma Anderson

      Artist and Science Junkie

      In reply to robin linke

      Not at all

      I'm advocating we IMPORT people so that regardless of their skill set, we have a balance of ages within the population that contributes tax and therefore to the health care system, and whoever is most qualified to look after our grannies and grandpas gets the job, no matter where they were born.

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    4. robin linke

      stamp dealer

      In reply to Emma Anderson

      Emma, We already 'import' people at record levels. But the cost of the ageing population on the public purse continues to rise. 50% of all health costs are incurred in the last 18 months of life. I believe 40% of nurses will retire in the next 10 years. Where do you propose to get replacement nurses on such a scale if you are 'importing' people 'regardless of their skill set'.

      The best immigrant is the new born Australian baby. The last 40 years has seen the decline of commonsense and forward…

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    5. Emma Anderson

      Artist and Science Junkie

      In reply to robin linke

      As your comment progresses it is revealed to me that your fear is racism based and actually has nothing to do with what elderly people need - TLC.

      Your comment disgusts me.

      I'm more than happy for people to come to Australia, and for Australians to travel elsewhere and I don't care what those people look like or what version of a fairy tale they believe in.

      What I care about is that there are people suffering and there is a mutual need. People can learn new skills. What people can't do, is change the size of our planet.

      Let 'em come.

      Maybe it's you who should leave.

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    6. robin linke

      stamp dealer

      In reply to Emma Anderson

      Emma, You will find my comments have a logical progression.
      The failure to save for retirement and longevity means there is an enormous pressure on the public purse which I have stated is now unfundable from the taxes from workers and industry. Hence my policy of a negative mortgage on the home which the ageing population own.
      You believe that the health & pension costs can indefinitely be funded from tax although you have given no statistics to support this.

      Marriage and family support are…

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    7. Emma Anderson

      Artist and Science Junkie

      In reply to robin linke

      "The failure to plan ahead is a time bomb for Australia. The racial, cultural.ethnic and religious implications will be stark when the current over 65's are gone. Singapore planned ahead and is free, whereas Australia did not and the white population will be trapped.
      Between Morocco on the Atlantic coast to the southern Philippines there are 40 multicultural, multiracial multireligious countries. Which countries represent the best role models for our brave new Australia?"

      How exactly does this…

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  4. wilma western

    logged in via email @bigpond.com

    The blame game is hottest re Victoria versus Commonwealth. The Federal health minister stated that only Victoria has refused to look at other health areas to assist the hospitals screaming about cuts and bed closures. Perhaps Vic has cut its own health budget more than other newly installed coalition govts or perhaps its system is a bit different.

    However some say few if any admin and management cuts have been made by Vic hospitals. Some hospitals mentioned that nursing in the home could replace some of the closed beds - but they seem to have been promptly shut up re that option.

    It is naive to expect that 100% hospital funding from the Commonwealth would stop the blame game - just look at the annual protests from the states every time the next Grants Commission disbursements are announced.

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  5. Dianna Arthur
    Dianna Arthur is a Friend of The Conversation.

    Environmentalist

    It is naive in the extreme to believe that medical services along with education can be run as a private enterprise.

    A nurse working in acute care, can hardly be expected to achieve "positive outcomes" at the same rate as other wards.

    As for the blame-game between states and federal government was this always an issue in the past when medical service was considered a government responsibility, before 'corporatisation' arose as 'best practice'?

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  6. Bernie Masters

    environmental consultant at FIA Technology Pty Ltd, B K Masters and Associates

    Thanks for the article, Anthony. It contains many useful and insightful ideas.

    Have you looked at the way that the State of Oregon, USA, allocates its limited health dollars. In simple terms, it determines how much money it has to spend each year on health, gets a team of experts (doctors, nurses, health administrators, community, etc) to advise on what operations or procedures will deliver the greatest health benefits, ranks those operations or procedures with the statistically expected number…

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    1. Emma Anderson

      Artist and Science Junkie

      In reply to Bernie Masters

      Ahh yes and Medicare in Australia means the DMDs for MS are subdised and cost about $5 - $10 per month for the patient, whereas, the US system means that the DMDs are NOT subsidised and the patient pays $5000 per month out of their back pocket because insurance companies don't insure preexisting conditions and no one thinks they're going to get MS because no body knows what flaming causes it.

      Yet the health outcomes of this condition are unpredictable for all concerned. You can't stick it nice and neat in a little box of who is going to get better this year. Not yet.

      How many other illnesses are like MS this way? And how many other people go from, lets say a treatable condition, to a serious condition, because health is "managed" this way?

      There is no way in hell we should have a health system like the US - it stinks.

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  7. Emma Anderson

    Artist and Science Junkie

    I'm not familiar with the exact details of these proposals. However, something about it reminds me of an episode of Star Trek: Voyager where the Doctor's mobile emitter is stolen and sold to hospital that is administrated on principles that were eerily familiar but perhaps not the same.

    If you don't know what that translated to (perhaps you're not a Trekkie), it meant that there was a ward where people were rationed the preventative care treatment for "arterial aging" on the grounds of a coefficient…

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  8. Robin Bradbear

    physician

    Thanks for this
    I agree with almost all that you say, but would like to put in a slightly different perspective: the focus of health services should be on the consumer of the services (sometimes called the patient). There is a great deal of pressure from these consumers for services which are not scientifically or economically necessary. I agree that fee for service is a very poor basis for restraining growth in costs, but (in my view) most health workers are trying to satisfy the consumers when they order unnecessary services. Perhaps we need to try to develop more sophisticated models which include, for example, the value to a consumer of having "futile" oncology treatment, as well as the cost of the treatment.

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