Health debate needs patient focus and empirical rigour

Launch of the Whitlam Institute Health Forum series, Invited Commentary on Proceedings

University Of Western Sydney, Parramatta Campus Sydney, 15 July 2003

Good afternoon everyone, my name is John McCallum. I am Dean of the College of Social Health Sciences of the University of Western Sydney and it's my job to introduce Mary Foley, who is providing today's commentary on this morning's proceedings.

Mary Foley is the Chief Executive Officer of St Vincent's and Mater Health Services, Sydney since the beginning of 2001. She's had a career spanning years somewhat less than the life of the Medicare system, both in the public sector and the private sector. She has worked for Commonwealth and state governments; she's worked for Mayne Nickless.

Just to give you a sense of the value of Mary's time: She is a member of the board of the University of Western Sydney, which we value highly. She chairs the University's Strategy and Resources Committee. She is director of the Garvan Institute for Medical Research and the Victor Chang Cardiac Research Institute a member of the Chief Executive Women Council and a member of the Management Committee of the Australian Innovation Association. Mary, we value your time and contribution today. Thank you.

Ms Foley: Well, it's quite a daunting task to come at the end of these two presentations and be the discussant, and make some comment and reflection on what we've heard this morning.

Firstly, I think it's been wonderful for the Whitlam Institute to conduct a Forum of this kind. Health policy is an excellent topic. It is historically appropriate in terms of the achievements of the Whitlam government, but also timely in terms of where we're heading with the Australian health care system.

And we do seem to be embarking on a new era, where the future shape and structure of the system is up for debate.

The recent changes are not yet through parliament. They are about the funding and structure of GP services and are actually quite a profound shift, which I think John Deeble highlighted.

They (the changes) are really signalling that for the first time in 20 years, it has been okay politically to start to raise significant changes to the Medicare system.

I remember when Medicare was first introduced on 1 February 1984 - I was a state public servant at the time, negotiating with the Commonwealth on the New South Wales Medicare Agreement, and making sure those Commonwealth public servants, (which I'd been previously worked with in the 70s), weren't going to get the better of us at the state level. So I remember it very well.

Since that introduction in February 84, till now, it has really been partisan federal policy to not muck around with Medicare.

It's gone through tinkering, it's gone through evolution during that time, very much on the basis of playing with the same parameters that were brought into being in the early 80s.

There is another reason why it's timely to have this discussion now.

And that is because there really are changes in the health system that are -- regardless of what is happening politically -- causing us to visit the structure and say, is it working? What do we need to do to position ourselves for the next 20 years?

In commenting on that I won't pretend to be able to compete on an academic level with either of our speakers, Professor Deeble and Professor Richardson. I am coming very much wearing my hat as a health care provider in a career that's involved working in the public sector and the private sector; and now in my role as CEO St Vincent's and Mater Health.

St Vincent's and Mater Health is about a $390 million turnover health enterprise, half of which sits in the public sector - operating a major public teaching hospital, research institutes, community health, mental health, drug and alcohol services, community health, palliative care, rehabilitation within the publicly-funded system; and operating two major private hospitals in association with private medical clinics, and the whole gamut of private medicine.

I think, in terms of the large state public hospital systems, they really have got to a point where they are almost beyond the point of being able to deliver what they have in the past.

The fact that they do manage to function to deliver the services they do, in the way they do, is a tribute to all those dedicated people who work in that system.

Similarly in private health care, it's just as hard to make it all work and keep it viable. That task also tends to ride on the back of very committed health professionals.

This Whitlam Institute event is also valuable because - and this is an area which Jeff Richardson really highlighted - there's a huge amount of rubbish talked about health.

Most of the debate comes from not just an ideological perspective, but from misunderstandings.

I think most people - or certainly most people who access the health system don't understand its structure. It is extremely complex, and I think 99.9 per cent of people haven't got a hope of getting their head around it all. Yet most of the people who work within the system don't understand it either. They understand their bit, and they understand what they need to do to deliver care to their patients in that area they are responsible for. So in that environment, too, you have a clash of myth and a clash of paradigms.

So it's excellent to come along today and have two very deep presentations that start to take us into the real guts of the issues, drawing us to data, but also drawing us to some of the sociological issues that we have to grapple with in our society to determine the sort of health system we want to have for the next 20 years.

I think, in turning to John Deeble's critique, I found it very interesting to look at how stable those numbers have really been on so many dimensions.

In terms of the report card on Medicare, over those years since February 84, it certainly can be seen to have performed extremely well; especially if we're looking at it as a funding system. It also highlights that some of the most recent debate we've had around Medicare has been focusing on some issues that may well be shadow boxing to some extent.

Jeff Richardson's presentation went on to highlight some of the real struggles and battles in achieving a fit between the structure of the system that delivers public and private care -- and the funding mechanisms that support it, and the rules of the game that support it.

As a provider I'd like to perhaps just bring a couple of other dimensions to the discussion, because at the provider end we don't have these sorts of discussions. Our discussions are much more determined by the fact that we are on the receiving end of this structure and funding system. Our challenges focus on how to ensure access for our patients and how to ensure good outcomes for care.

We do come up against a huge mismatch between what we need to be able to do, the nature of the technology, and the nature of our community (who are far more demanding and consumerist when it comes to the health care they want and what they expect from their health care system).

There has been a lot of nonsense talked over the last 20 years, of the problems of cost shifting: cost shifting between public and private; cost shifting between federal and state?funded systems. Whereas in fact, all that is is rational economic behaviour on the part of providers whose objective is to deliver the best care they can within this amazing structure that we have (so filled with anomalies).

If you're conducting a public hospital chemotherapy department, with modern drugs and modern technologies, most of that can now be done on an ambulatory basis (that means patients walk in and walk out on a daily basis) - then you are going to make sure most of those patients, as many as you possibly can, are privately referred non-inpatients. This is a way you can have a public hospital outpatient (when you're not having an outpatient), who can actually be billed under Medicare - and then the chemotherapy drugs, which are enormously expensive, can be billed to the Pharmaceutical Benefits Scheme.

It's just a rational economic approach. It means that chemotherapy departments in the public hospital system are able to treat far more patients than they otherwise would. And whether you want to tell me which ones are public patients and which ones are private, it doesn't really make any difference; all we're doing is maximising the access to the funding program.

There has been a lot of revisionism in rewriting just what Medicare is.

But one of the things that Medicare definitely did was ensure that private health insurance continued to be viable.

For those of us negotiating Medicare agreements in the early days, it included a $50 a day subsidy, which was then later built into the Medicare grants base going forward -- to keep the cost of private patients in public hospitals down and to keep private health insurance affordable. In this way, when Medicare was introduced, you didn't have a mass exodus from the health insurance funds.

The public and private mix in the Australian health system has always been one of its peculiarities, but also one of its strengths.

It has allowed a system with some flexibility in it.

It has allowed a system where doctors have been able to participate very actively in private and public medicine without necessarily having to have forced choices.

And it has meant that there has been a very good quality both public and private system. I think both our speakers today have indicated that you can't see public and private as being in two separate universes at all. They are very much part of the one system.

But where are we now - among the stresses and strains?

It is a worry that private hospitals are principally about procedures. You mostly have procedures in a private hospital. And in fact, public hospitals are actually mostly about medical care (in that the majority of public hospital admissions are through the pressure of the emergency departments, and most emergency admissions are medical, not procedural admissions).

Even a lifesaving procedure is usually done on a booked basis. It's very seldom you go straight from the emergency room into the theatre.

So the way a public hospital works is, while you've got to ration and contain your services within a fixed budget -- you have no control over the people coming through the door and the emergency department, and who you have to admit. So then you ration the remainder, which are procedural, and that's booked (or sometimes called elective). Whether it is neurosurgery, bypass surgery, or a heart-lung transplantation - elective surgery merely means it is booked. Most booked stuff goes on in the private sector. In fact, most serious procedures (hip-knee replacements and so on) tend to be in the private sector. So there are some issues then about access and equity.

I agree with John Deeble that huge technological developments have been well absorbed by this public and private hybrid system. And I think we need to proceed with great care on how this system evolves into the future. You can get huge differentials in access, which I don't think are acceptable within the Australian value system.

Just one example is medicated stents - and we are struggling with it on our campus at Darlinghurst, where we have both public and private hospitals.

If you have a stent put in vascularly to clear a blockage it is now proving to have enormous benefit. The more quickly it is done - the better the outcomes for patients. Now it's emerging that medicated stents may be even more effective, in that at the same time as the stent is going in, it is medicating the patient and stopping nasty things happening.

But the thing is, in the public hospital system we're not funded for that, so you don't get a medicated stent there. Where if you come into our private hospital, you can have a medicated stent because you are reimbursed for the service that you are given.

I would however like to move on to another area other than private vs public - and that is the far greater challenge we face because of the shift with technology to ambulatory care. The traditional demarcation has been that if you are really seriously crook then a hospital will look after you. Otherwise, if you see a GP that was fixed up with bulk-billing. If you needed a specialist you might go along once but if you were seriously ill you would go into hospital.

For 20 years the Medicare model that funded those things worked pretty well to cover most Australians - all those citizens eligible for Medicare.

However, we are shifting more and more to ambulatory delivery. For instance, a cancer patient, with a very serious illness carrying potentially dire outcomes, will need a whole of range procedures - radiotherapy, chemotherapy, surgery, all sorts of diagnostic tests before, during and after, pastoral care, palliative care, community support. For all those things that you need as a cancer patient -- except if you need surgery as part of your treatment -- you probably don't need to actually be admitted as an inpatient into hospital care.

The whole funding system we've got is geared to seeing the doctor if you're not too crook, or going to hospital if you are.

In fact a whole lot of medical care is delivered when you are really crook, but you don't actually get admitted in a hospital scene -- and that leads to problems of fragmentation.

Our structure, both public systems and private systems, don't address it very well. As you move back and forth into ambulatory mode, you move out of state-funded systems (that did have the potential to embrace the patient) into the more fragmented Commonwealth-funded systems of seeing doctors in their rooms. This means you are only being funded for the doctor's visit and it also means you are seeing a series of doctors, and it's not very well brought together around the patient.

The other discontinuity, too, is that we are very well geared up with Medicare for treating acute illness. But we are not very well geared for the chronic illness.

All those systems we have looked at in terms of how they are financed are not addressing some fundamental issues of how best to deliver to the patient.

I think we started to get a feel for some of the challenges in some of those vignettes that Jeff Richardson showed us towards the end of his presentation.

I think that's the subject for another excellent session such as this, on a future occasion.

So I'd like to thank our two speakers for putting some really serious work and thinking into it to present that to us today; and to congratulate the Whitlam Institute for really bringing forward today some serious, deep, tough stuff that we need to be grappling with if we're going to have a very good health system that takes us through for another good 20 years. Thank you.