Year 2 of the Abbott

government – where should its

health policy go?

Presentation to 2014

Future of Medicare conference

TERRY BARNESPrincipal

Cormorant Policy Advice

14 August 2014

The future always looks foggy…

Points of discussion

• Where are we now?

• Lessons learned from the GP bulk-bill co-payment debate.

• Is big-bang healthcare reform really possible?

• The Abbott government’s “to-do” list for its second year.

Where are we now?

Lessons for new ministers from

GP co-payment debate

• Public is conservative about healthcare institutions including MBS, PBS, public hospitals.

• Significant changes need careful planning and explaining as well as doing

- Till the ground long and well!

• You can’t rely on canaries in the coal mine to do the policy advocacy job for you.

• Don’t underestimate the malign potency of unelected vested interests – and don’t pander to them in negotiating compromise.

Big-bang healthcare reform is not

politically possible

• Public is conservative and clingy about MBS, PBS, public hospitals, and this shapes the politics of health

- Makes scare campaigns all too easy.

- Oppositions campaign on 19th century issues rather than 21st century best practice (eg maintaining public hospitals as “cathedrals of care”).

• Toxic battles over co-pays, federal hospital funding make cooperative reform less rather than more likely.

• 2014-15 state elections in Victoria, NSW, Queensland won’t help either.

Abbott and Dutton’s to-do list for Year 2

1. Use Commonwealth power for good,

not evil

• Don’t be afraid to use purchasing power over MBS, PBS, public

hospitals in pursuit of sound policy outcomes.

• Stop vested interests controlling their own patches.

• Combat Medicare racketeering – eg IVF industry’s shamelessly

exploiting MBS for shareholders, investors ahead of patients.

• Take excessive out-of-pocket expenses fight right up to the AMA

and specialists.

• Break down demarcation barriers stopping more flexible and

economical primary care and CDM.

Partner with states re

public hospital sustainability

• Keep working with states to bed down national ABP, performance benchmarking and reporting.

• Make reduced federal funding growth a acute care reform asset – use Commonwealth funding dominance as an efficiency driver

- That’s what happened in the Canberra-Victoria funding standoff in 2012-13.

• Incentivise states to be more productive and innovative re public hospital service deliver/admissions risks management, error reduction and out-of-hospital care.

2. Allow private health insurers

into primary care• Regionalised trials to date are encouraging.

BUT

• Government needs to clarify and codify acceptable PHI involvement in primary care, and its relationship to Medicare and “universality”.

• Encouraging PHI equivalents of Victoria’s HARP programme is a good thing.

• Learn lessons from GP co-payment handling mess and head of scare campaigns by informing, explaining and consulting.

3. Private health insurance reform

• Intertwined with the future of Medicare.

• Medibank sale gives Government a golden opportunity to clarify PHI coverage, deregulate its operation.

• End ministerial premium approval, remove costly and age loadings from rebates – both awful and obsolete policy.

• Modify community rating to reward at least some good risk behaviours and discourage bad.

• Get personal responsibility more in the picture for PHI and, by extension, Medicare and ED access.

4. Merge MBS and PBS safety nets

• Co-pay debate focusing on affordability and cost impacts

highlighted that current safety nets are obsolete.

• Should be a single combined MBS/PBS safety net that pools

overall personal spending on medical and pharmaceutical

services.

• Simply have a safety net, thresholds focusing on $

incurred by general and concessional patients.

• Start work in 2014-15 to have new single safety net in

place by January 2016.

5. Clean out federal Health bureaucracy• Too many public servants means too much government

- Too capable of duplicating state and private sector capacity and brainpower.

• Health, DVA and aged care functions of Social Services should be consolidated and shrunk

- Get rid of hanger-on agencies too.

- Contract out policy advice and break pernicious influence of the healthcare establishment.

• Payments and coordination agency first and foremost, not policy and political advocacy.

• New DoH Secretary about six years overdue. Needs to come from outside the Department, and preferably outside APS.

What Abbott and Dutton should do

(but probably won’t)• Draw Peter Dutton’s various thought bubbles together

- A Medicare sustainability White Paper or other policy road map.

• Declare a single government funder is a 2020 goal

- Contestability in delivering public hospital services is a good thing, BUT delivering it will take up to a decade and require a huge and difficult selling job.

- Regrettably, probably beyond the competence of this government and beyond Labor’s imagination.

• Making health insurers active rather than passive payers

- Insurers as HMOs is not necessarily a bad thing.

They won’t because these are the

health data that matter most...

Further information

terry.barnes@cormorant.net.au

www.cormorant.net.au

Twitter: @TerryBarnes5