Universal access to high quality health care is a well-established feature of Australian life. But universality in access has yet to be accompanied by the features that would mark a truly world-class health system. Our arrangements are oriented to illness management not prevention. They are built around professional and political demarcations, not continuity of care for the patient. They are provider-driven not consumer-driven. Their cost is open-ended, not restrained by a self-help culture. Re-design and renovation in health care is therefore a high national priority.
The key deficiencies in our current arrangements are:

Health care delivery is highly fragmented, with little continuity of care across program, service and practitioner types, and few incentives for the industry to become consumer-focussed.

There is little or no financial incentive for providers to keep people well and out of their surgeries or hospitals. On the contrary, most of the financial incentives reward repeat business with unwell patients.

Consumers have little market-based power in access and pricing of services. There are insufficient means for consumers to substitute one care regime for a better and more price-effective regime.

Consumers have little access to brokerage services which purchase services on their behalf and negotiate over price and service quality.

Private insurance is divorced from any active role in the management and delivery of health care, meaning it cannot operate in a cost-effective way without substantial public subsidy and is therefore unsustainable.

The supply of medical and other health practitioners is artificially restricted by professional vested interests who wield excessive influence over public policy.

People Power stands for

ü Patient-centred arrangements Health care should be tailored to meet the individualised needs of consumers and their families/carers – the health care dollars should follow the consumer and be managed by the consumer’s representative or agent.
ü Empowerment of consumers Consumers need brokering and agency arrangements to be able to exercise effective choice in care and services.
ü Choosing and managing wellness Health resources should be used to support people in living well and staying out of surgeries and hospitals
ü Dispersal of ownership Ownership of health services should be distributed as widely as possible amongst communities, consumers, practitioners, and not-for-profit organizations, and removed from direct government ownership and control.

People Power will

  • Consolidate all existing commonwealth and state health funding programs in a consumer-based funding entitlement ( the Patient Health Funding Entitlement) allocated to a consumer’s nominated agent. The agent may be a health fund, a community health centre, a consumer co-operative, a for-profit financial agent, or any other entity which has a capacity to aggregate member enrolments, manage their financial entitlements, enter contractual arrangements on their behalf, and manage consumers’ health care relationships to the satisfaction of the enrolled consumer. Agents would be permitted to contract with providers and practitioners in developing price and service quality arrangements for their enrollees and would be free to develop packages of care, innovations in care planning and information management, home-care supports, and ancillary benefits for their pool of consumers. Consumers would be free to select their preferred agent, and to transfer from one to another annually.

  • Ensure that this consolidated Patient Health Funding Entitlement (PHFE) is risk adjusted by factors of age, sex and health status in such a way that agents will compete to attract patients with chronic and complex conditions, with additional financial incentives for achieving specified health outcomes. The PHFE would consolidate MBS, PBS, commonwealth and state programs, and commonwealth payments to the states for public hospitals.

  • Require in turn that consumer agents in receipt of PHFEs meet the full health costs of their enrolled consumers including primary medical care, in-patient and out-patient hospital services, pharmaceutical services, and domiciliary care.

  • Require all health services currently funded by commonwealth and state governments to develop episode-of-care costing schedules to enable consumer agents to purchase services on a competitive basis.

  • Begin the process of introducing consumer agents into the health system by introducing an immediate incentive payment of $100 to consumer agents for each enrolled consumer who ‘opts in’ and enrolls with an agent. Enrolment with an agent will authorize the agent to receive consolidated health funding entitlements and to begin the process of demand aggregation and brokerage. Existing arrangements will apply to consumers who choose not to ‘opt in’.

  • Encourage the development of consumer agents specializing in mental health who would leverage more co-ordinated services with an emphasis on early intervention to arrest the epidemic of mental illness in Australia.

  • Encourage the development of consumer agents specializing in family and early childhood health who would leverage more co-ordinated services with an emphasis on early childhood intervention.

  • Allow consumer agents in receipt of PHFE funds to adopt their own schedule of consumer payments as they see fit, including membership fees, co-payments, and insurance tables. Insurers in receipt of PHFE funds would be exempt from community rating regulations for PHFE patients, allowing them to differentiate their pricing in insurance products based on consumer behaviour and lifestyle, and allowing the introduction of behaviour and outcome related rebates and bonuses as incentives for members to self-manage their own health risks. Those insurers not in receipt of PHFE funds would remain bound by the community rating regime.

  • Support the establishment of an independent Consumer Health Information Service to provide comparative online price and service quality data on consumer agents, hospital and health services, practitioners, and health insurers.

  • Remove all restrictions on the supply of doctors and other health practitioners. To relieve the acute shortages of general practitioners and medical specialists, universities should be permitted to set their own fees for medical training and determine the size of their intake. Restrictions on entry of overseas-trained doctors and the onerous requirements placed on them to receive permission to practice in Australia should be eased.

  • Remove all regulatory restrictions on the capacity of consumer agents to contract with or directly employ medical, dental and pharmacy practitioners, along with all restrictions on the capacity to own hospitals, medical or dental practices or pharmacies.

  • Enable hospitals and other health services which are state owned to voluntarily transfer their leadership and management to non-government entities (foundations, community organizations, practitioner entities, consumer entities). Following a ten year probationary period under such arrangements, ownership may be transferred to these non-government, not-for-profit bodies.

People Power Health Policy Contact : Vern Hughes  

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