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Ideas for Australia: Australians are living longer but getting sicker – we need a plan to keep them out of hospital

People with chronic illness often report bewilderment with the health system’s complexity. Photographee.eu/Shtterstock

Ideas for Australia: Australians are living longer but getting sicker – we need a plan to keep them out of hospital

People with chronic illness often report bewilderment with the health system’s complexity. Photographee.eu/Shtterstock

The Conversation has asked 20 academics to examine the big ideas facing Australia for the 2016 federal election and beyond. The 20-piece series examines, among others, the state of democracy, health, education, environment, equality, freedom of speech, federation and economic reform.


Australian health policy is dominated by debates over which level of government will foot the bill for the rising costs of care. The drivers of these costs are well known: growing demands for services; new, more expensive technologies; and an ageing population with more people living with complex chronic conditions.

Solutions usually start (and often finish) with reform of funding arrangements – as though a more logical, planned system would undo these kinks.

Too often, we miss the experiences of people using health care. For the growing numbers living with complex chronic illness such as diabetes and heart disease, the health system remains a confusing maze. People with chronic illness often report bewilderment at the system’s complexity and frustration at how much work it takes to manage their illness.

We need to focus on keeping people out of hospital by providing better co-ordinated and integrated care.

Health services are excellent, but fragmented

The various parts of the system are poorly connected. Patients report being “lost in the system” or “adrift in a boat with no oars”. Consumers are frustrated and incredulous, for example, at the inability of health professionals to communicate with each other and share simple information about their patients’ health status, tests and procedures.

The high-tech hospital end of health care has become ever more specialised, breaking the patient up into smaller pieces that are treated by sub-specialists. Meanwhile, the areas of practice that claim to look at the whole person – especially primary care, which includes general practice – remain underfunded and unappreciated.

This fragmentation is compounded by the way we pay for our health services.

First, there is an old split between the federal and state government roles. The states draw on their meagre resources and a large subsidy from the feds to run the public hospitals. Most of the noise around health politics comes from this financial stress.

Canberra pays Medicare’s bills for GP and other medical services. It also gives the generous subsidies that keep private health insurance and private hospitals afloat.

This funding split makes it harder to get our three systems of health care – public hospitals, GPs and primary care, and private health – to link their services. Patients experience disconnected care and increasing out-of-pocket payments.

Second, this is made worse by the fee-for-service model. Based on a massive Medical Benefits Schedule (MBS), which sets the price for each individual service item, this payment system dominates medical practice.

Fee-for-service creates strong incentives to swell practice revenues by increasing the volume of services. This often pushes against the best principles of good care, encouraging overservicing. It offers little encouragement for prevention or building better links with allied health and hospitals.

At the same time, we lack a mechanism to reward providers for delivering high-quality care.

Towards integrated care

“Integration” – building stronger connections across the system – has become a holy grail for health reformers in Australia and other developed countries. The rhetoric of building more integrated care has been with us for many years. But the reality has proved challenging.

The Rudd government’s Superclinics made many of the right noises and brought a range of specialties under the same roof with general practice. In practice, locked into a conventional fee-for-service framework, the Superclinics have struggled to fill their broader objectives.

The World Health Organisation has argued that care integration is part of a more fundamental change in the philosophy of care. It must start from a more person-centred approach. This takes into account the needs of the individual, engaging and empowering people in the management of their own care.

How do we get there?

This would require some major changes in the way we do things.

First, improve communication. We now have a long history of vast amounts of public money wasted on top-down e-health schemes that have little public take-up and even less engagement from clinicians.

A working e-health system needs to be driven by those using the system, including consumers. The best examples in Australia come from the Northern Territory, which jettisoned the bureaucratically driven models from Canberra and developed a workable system to connect up remote areas and Indigenous health.

Second, build teamwork across various providers in the system. The patient-centred medical home model, which has developed strong support within Australian primary care, is one option.

This model of integrated care organises services around people’s needs. People with chronic conditions could enrol with a GP practice. This would receive a block payment – effectively the sum previously scattered across various fragmented schemes, including fee-for-service payments.

The practice would become a patient-centred medical home. It would provide or purchase all of the patient’s needs, including diagnostic blood tests and x-rays.

This fixed “budget” would create new incentives for more efficient use of the health dollar, especially in tests. An Australian medical home model would provide a focus for teamwork across general practice, nurses, specialists and allied health providers.

There are some signs of support for this approach. The Turnbull government has followed recommendations of its Primary Health Care Advisory Group to trial elements of the patient-centred medical home model.

This could be a major step forward. It accepts the need for a primary care focus to bring the system together, putting the neglected GPs at the centre of change. But we still have few details of the government scheme’s funding and how connections will be built across state and private health systems.

Finally, consumers, clinicians and administrators need better maps of the health system. Integration is built on finding the right providers, but finding this information is as difficult for those working in the system as for bewildered consumers.

One response has been to map local health services. Mental health atlases, for example, are being developed across Australia. These enable comparison between regions and jurisdictions, providing new evidence to identify gaps and improve local services.

A precondition for success is treating health care as a system, not a set of individual services. Shortages of hospital emergency beds, for instance, should not be treated as distinct, highly politicised hot potatoes.

Better integrated services, built around the person-centred medical home model, would enable us to deal with minor emergencies in community settings and keep patients out of hospital.


You can read other articles in the series here.