Paying hospitals for quality: can we buy better care?

The idea of paying more for better quality care and paying less (or not at all) for poor quality care appears inherently sensible, and has motivated several attempts to introduce financial incentives for improving the quality of health care. These range from bonus payments to hospitals that meet specified clinical indicators for particular conditions (Queensland and Western Australia are currently implementing such schemes) or paying for structures that encourage quality (including higher payments for achieving accreditation), to penalties for poor quality, such as withholding payment for “never ever events” or shocking medical errors, such as wrong site surgery (as applied in the United Kingdom and by the United States Centers for Medicaid and Medicare Services).1,2 Activity-based funding for hospital care is widely used across the world, and quality payments are generally applied as adjustments to the case payments. Financial incentives that reward quality are also applied in primary care, but this article will focus on hospitals.

Two key questions must be considered when thinking about paying for quality. The first is whether the standard case payment is inadequate for providing quality care; that is, whether appropriate quality care, even when supplied efficiently, simply costs more than the case payment. The second is whether the use of rewards (and penalties) will encourage more appropriate or higher quality care. Any use of payments or other incentives obviously requires a clear definition of appropriate quality.

The first question involves the concern that quality could be actively constrained by not paying enough for care. There can be no sensible argument in support of paying too little to achieve appropriate quality; the question is whether it is likely to happen. In Australia, the casemix price paid through activity-based funding is based on the analysis of existing cost data supplied by public hospitals in all states and territories. Unless the present quality of care is significantly lower than appropriate, the national price will therefore reflect adequate care. This could change with technological advances or new evidence about clinical effectiveness. Incremental change is incorporated by regular revisions of casemix classifications and price. Even a major shock in terms of technological progress or additional evidence is likely to be focused on a particular case type, so that the impact on total hospital revenue would be marginal and corrected within a short period of time. While arbitrary cuts can be made by funders to the national price, these would not be a cost-based determination.

The second question is both more interesting and more challenging. Financial incentives that target health care use are generally effective, consistent with economic theory. It should follow that aligning incentives with quality improvement should enhance the quality of care. Evidence collected over the past decade has been disappointing in this respect,3,4 and more recent critiques are no more encouraging in terms of their finding improved health outcomes.5 One reason for these disappointing findings is that financial incentives are not precise, and there are wide differences in the characteristics and the contexts of the different programs. For example, incentives may be positive (extra payments) or negative (reducing or withholding payments). The incentives might apply at the hospital level, benefiting the hospital budget as a whole; at a clinical department level, benefiting the departmental budget; or be directed to individual clinicians, in cash or in kind. The size of the incentive ranges from token payments to substantial funding. This would make it difficult to generalise findings about outcomes, even if there were a series of rigorous evaluations. Any design or evaluation should therefore start by considering whether the financial incentive is well targeted and appropriate for the behaviour it is trying to change.

Financial incentives can be applied to hospital-level indicators that encompass all conditions, or be targeted at particular conditions. Targeting a particular condition is more precise, but loses the scope of the entire patient population. Even a high volume condition affects a small proportion of the patient population, so that a targeted program will achieve only a limited overall impact.

Incentives can be directed to reward either better outcomes or improved processes of care. While better health outcomes for patients are undoubtedly the desired end, good quality care does not guarantee a better outcome for the individual. Many factors other than the processes of care influence outcomes, and there is always an element of chance. Further, some outcomes may not be experienced until years after care has been delivered.

The economic principle underlying the design of payment schemes is that the funder should reward effort that promotes the interests of the funder. This requires that the hospital, department or clinician is rewarded for what they do and for how they manage factors within their control. Not surprisingly, most financial incentives are therefore applied to improving processes of care. However, to avoid losing sight of the desired better outcomes, evidence that improving the specified processes leads to better outcomes is generally required.

Establishing the evidence base is challenging. Hospitals are complex organisations and hospital care typically involves a variety of clinicians and diagnostic and treatment modalities. The links between incentive, process and health outcome depend on the actions and interactions of many different players.

As stated earlier, a performance payment alone does not achieve anything. Generally, a specific payment is grafted onto an existing payment scheme; and, unsurprisingly, what works in one context or in one organisational and funding model cannot necessarily be extrapolated to another. For example, whether funders and hospitals are operating in a competitive market or in a centrally controlled system will affect how a pay-for-performance model works. Additional payments grafted onto a population-funded model would be expected to have a different impact to paying the same reward as an adjustment of activity-based funding. Further, incentives are complex and encompass more than financial rewards. Professional status, striving for excellence, and effective leadership can each influence behaviour.6

Evidence of no benefit is not the same as no evidence of benefit. The first means that there is evidence that an intervention is not effective; the second that the necessary research has not been undertaken. Even without strong evidence of improved outcomes, some people would argue that rewarding good quality processes is, in itself, valuable because quality should be encouraged, and higher quality is more likely to improve than to harm outcomes. However, it is important to first ask whether there could be unintended consequences of payment schemes, and the answer is unequivocally: yes.

The initial effect of a payment incentive is to focus attention. Some reward payments are too small or too cumbersome for potential recipients to claim, making them ineffective. Where the incentive is sufficiently strong, the attention of management will be focused on how to maximise the rewards. While this will improve the measured processes of care, it will also draw attention away from other problems. It is difficult to establish what the opportunity cost will be, but improved performance in one aspect of care may come at the expense of foregone improvements, or even deteriorations, elsewhere.

Incentives can also have perverse effects by encouraging gaming. This can involve changing how treatment processes are counted, such as coding conditions as more complex case types; raising the threshold for recognising hospital-acquired conditions; re-defining a multidisciplinary case conference. This effect can be mitigated by monitoring and auditing processes. One of the more undesirable effects is patient selection: if there is a strong incentive to choose less complex patients, an unintended effect is that hospitals may favour easier cases, so that patients in greater need find it difficult to receive treatment. This is more challenging to monitor.

More significant is the problem of intrinsic and extrinsic motivation, which tends to be little discussed in this context. Intrinsic motivation is complex and powerful, and is vital in health care: care providers are motivated by doing their job well, caring for their patients, and gaining the respect of their peers. Extrinsic motivation relates to behaviour that is driven by external rewards; financial incentives are clearly an important form of extrinsic motivation. Not only do extrinsic motivators lose their effectiveness over time, however, they can “crowd out” or displace intrinsic motivation. As a result, the rewarded behaviour is likely to fade once the reward is removed, even among those who were doing the right thing before the incentive is introduced.7

Any discussion of financial incentives should also address the notion of purchasing health gains. This is not as simple as it first seems. Let us assume that the Australian social value, or willingness to pay for a degree of health gain as measured in quality-adjusted life-years (QALYs), is about $75 000 (a reasonable estimate based on Pharmaceutical Benefits Advisory Committee determinations8). It does not follow that the Australian health care system should spend $75 000 for every QALY gained; this would certainly not maximise the health outcomes achieved by its budget.9 Specific health gains are delivered at a range of prices; for example, if it cost $15 000 per QALY for a particular treatment, paying $75 000 represents an overpayment of $60 000, or a loss of 4 QALYs. Maximising health outcomes requires starting with the lowest cost per QALY, and adding more expensive treatments until the upper budgetary limit, or the maximum social willingness to pay for a QALY, is reached.

Translated into hospital funding, this means not paying the same price for each unit of health gain. It means paying the efficient price for each treatment for each case type, up to the maximum social willingness to pay. It requires an umpire to set the efficient price for a case type, and a different perspective for determining whether this represents value for money. According to this argument, the price paid should reflect the efficient cost of production, but the volume of cases should be managed separately. The efficient price is intended to provide the incentive for better cost control, particularly in high cost hospitals. It is aimed at improving technical efficiency; that is, maximising the output for a given input.

Finally, getting the incentives to be consistent with the desired ends is only part of the challenge. Managers, clinicians and others involved in health care may be offered the “right” incentives, but, if they lack the skills and tools to identify what and how to effect change, they are powerless to respond.10

Financial incentives used alone are a blunt instrument. Their effectiveness will depend on the size and design of the reward or penalty, and also on how they reinforce (or are inconsistent with) other signals in the operating environment. It is therefore not surprising that it is difficult to reach general conclusions about their usefulness. It is even more difficult to reach conclusions about their relative cost-effectiveness compared with alternative approaches. Further, financial incentives have an opportunity cost, diverting funds and attention from other problems. Given what is known and what is still uncertain, it would be unwise to rush into their widespread use as a strategy for improving the quality of health care in Australia. Instead, they should be applied cautiously, with careful consideration of design and context and of the potential for unintended effects, and with evaluation of outcomes.

Clinical quality registries have the potential to drive improvements in the appropriateness of care

The effectiveness of clinical quality registries (registries) to monitor and benchmark patient outcomes is well established.1–3 There is also compelling evidence for the ability of registry information to drive continuous improvements in patient outcomes and adherence to guideline-recommended care.2–5 Systematic and ongoing collection of standardised data on medical and surgical interventions allows the identification and analysis of clinical practice variation and its effect on patient outcomes. Registry data has credibility with clinicians, stimulating increased use of evidence-based clinical management, decreased variation in care and improved patient outcomes.2,4

Capturing a high proportion of a registry’s eligible patient population is critically important in minimising the selection bias associated with incomplete capture. A low capture rate renders the pool of results unrepresentative and ungeneralisable, thus weakening the power of a registry to inform policy determinations.3 Omissions of data within a single clinical unit create the potential for “manipulation” of included and excluded data, thus weakening the credibility of unit-level reports and their ability to drive change.

Current reporting in Australia

A small number of national registries in Australia now capture a high proportion of their eligible patient populations. These include the Australia and New Zealand Dialysis and Transplant Registry,6 the Australian Orthopaedic Association National Joint Replacement Registry,7 the adult and paediatric registries run by the Australian and New Zealand Intensive Care Society,8 the Australasian Rehabilitation Outcomes Centre9 and the Palliative Care Outcomes Collaboration.10

Examples of how these registries report on rates of appropriate or recommended care include reports from the Australia and New Zealand Dialysis and Transplant Registry, which show improvement in the preferred type of vascular access — arteriovenous fistula — for haemodialysis patients over the period 2008 to 2012 (Box 1).11

The extent of adherence to guideline-recommended care delivered in intensive care units (ICUs) across Australia is demonstrated by information provided by the Adult Patient Database8 of the Australian and New Zealand Intensive Care Society’s Centre for Outcome and Resource Evaluation. Box 2 shows the high proportion of ICU admissions for which the patient received guideline-recommended care for venous thromboembolism prophylaxis each year for 5 years.8

Data from the Australasian Rehabilitation Outcomes Centre (AROC) demonstrate improvements in a key process indicator — assessment of functional status — for rehabilitation care provided in Australian hospitals over the period from 2002, when the Centre opened, to 2015 (unpublished data provided by AROC, July 2016) (Box 3).

The Palliative Care Outcomes Collaboration (PCOC) collects data from palliative care services across Australia on the length of time palliative care patients spend in the unstable phase of illness. An unstable phase ends when a new plan of care is in place, has been reviewed, and no further changes are required. A patient is considered to have an acceptable outcome if they experience no more than 3 days of instability. Information reported by the PCOC shows a considerable improvement in palliative care services achieving this benchmark over the period 2010–2015 (unpublished data provided by PCOC, July 2016). For care provided in hospital, the proportion of patients spending no more than 3 days in the unstable phase increased from 57% in 2010 to 86% in 2015. Similarly, for patients receiving care at home, the proportion increased from 41% to 76% (Box 4).

Governments across Australia have developed a number of registries with a jurisdictional focus. The Victorian Department of Health and Human Services, in particular, has invested in a significant number of clinical quality registries. In some instances, substantial funding has been made available by other organisations such as the Victorian Transport Accident Commission, Medibank Private and the Movember Foundation. Some state-based registries such as the Victorian Cardiac Outcomes Registry and its counterparts in South Australia, Queensland and New South Wales are collaborating to develop nationally consistent datasets.

There remains, however, limited capacity across Australia to benchmark outcomes and assess the degree with which health care aligns with evidence-based practice in a number of high priority clinical domains. In 2011, Evans and colleagues conducted a national survey to determine the capacity of Australian clinical registries to accurately assess quality of care. Of 28 registries surveyed, the majority were found to require modifications to provide useful and reliable information for quality improvement purposes. Thirteen of the 28 registries (46%) recruited fewer than 80% of the eligible population. Twenty-three surveyed registries (82%) did not formally audit reliability of coding at the clinical level and five (18%) did not collect the information required for basic risk adjustment of outcome measures.12

In a 2010 systematic review of how medical registries provide information feedback to health care providers, van der Veer and colleagues confirmed findings from previous studies that process of care measures — such as adherence to guideline-recommended treatment or treatment modality, time to treatment, and use of secondary prevention medication — are more readily influenced by feedback than by outcome measures.13 However, national measurement of health care appropriateness (as measured by how closely care aligns with guidelines) in some important clinical domains such as acute coronary syndrome and stroke care has relied on intensive periods of clinical audit.14,15 This could be monitored more effectively using registries, which routinely collect a minimum dataset. Well constructed registries collect and report information on both the effectiveness of care (outcomes) and the appropriateness of care (process) on an ongoing basis, obviating the requirement for clinical audit.3,16,17

Some Australian registries are developing to the point where national auditing of clinical care will no longer be required in order to gain an accurate picture of national outcomes and patterns of care. The Australian Cardiac Outcomes Registry18 intends to develop its collection of outcomes data for patients with acute coronary syndrome along with processes of care data in line with the Guidelines for the management of acute coronary syndromes 2006.19 The recently launched Australian and New Zealand Hip Fracture Registry20 has commenced collecting data items on both effectiveness and appropriateness of care in line with the Australian and New Zealand guideline for hip fracture.21 The Australian Stroke Clinical Registry22,23 collects and reports information on the outcomes of care for stroke patients and information on processes of care in accordance with the Clinical guidelines for stroke management 2010.24 For example, Box 5 shows participating adult hospitals’ adherence to five guideline-recommended process of care indicators.

Registry reporting outside Australia

In the United Kingdom, the National Hip Fracture Database (NHFD) was developed as a collaboration between the British Orthopaedic Association (BOA) and the British Geriatrics Society (BGS). Data are collected on casemix, care processes and patient outcomes.25 Care is measured against six standards laid out in the 2007 Blue Book (clinical care standards) on the care of fragility fracture patients, including prompt admission to orthopaedic care; surgery within 48 hours and within normal working hours; nursing care aimed at minimising pressure ulcer incidence; routine access to orthogeriatric medical care; assessment and appropriate treatment to promote bone health; and falls assessment.26 In 2010, the NHFD registry became a ready-made data collection and reporting mechanism for measuring compliance with a set of clinical care standards incentivised by a best practice tariff.27 Box 6 shows the compliance with best practice for a number of clinical care standards using registry data.

The authors of the 2012 NHFD national report note:

clinical teams have used the synergy of audit, feedback and standards locally in clinical change or service development initiatives prompted and monitored by the NHFD, often with very substantial and quantifiable improvements. These include reduced mortality and reductions in length of stay, often arising from care pathway redesign and improved collaboration between surgeons, anaesthetists and ortho-geriatricians; and substantial efficiency savings that are in keeping with an important point made in the BOA/BGS Blue Book: “Looking after hip fracture patients well is cheaper than looking after them badly”.25

In the United States, the American Heart Association/American Stroke Association Stroke registry has been successful in measuring adherence to a number of agreed care processes, including deep vein thrombosis prophylaxis, antithrombotic therapy, discharge medication, dysphagia screening, stroke education, smoking cessation and assessment for rehabilitation.28 The registry has over two million patients enrolled from more than 2000 hospitals and links performance data with Medicare fee-for-service claims data. This has enabled the creation of 30-day and 1-year mortality prediction models, outcomes variation comparison across hospitals and the assessment of the impact of critical variables on outcomes of interest.28

Heart failure registries in the US collect data on clinical characteristics, patterns of hospital and outpatient care, as well as outcomes of patients admitted with this condition.4 Online tools are used to provide personally tailored feedback on performance and other quality measures against a national benchmark. Process of care improvement tools have been developed and made available in a toolkit, which includes evidence-based practice algorithms, critical pathways, standardised orders, discharge checklists, pocket cards, and chart stickers. The toolkit also includes algorithms and dosing guides for guideline-recommended therapies and a comprehensive set of patient education materials. Participation in heart failure registries in the US has been associated with substantial improvements in the use of guideline-recommended therapies for heart failure in both the inpatient and outpatient settings.4 Conformity with appropriateness measures has been shown to improve patient outcomes and disparities in care have been reduced or eliminated.4

Swedish registries have contributed to a vast amount of information used in health services research in that country.29 Many of the Swedish registries commenced operations over 20 years ago with government financial support and have been attentively maintained. Incentives are provided to hospitals complying with routine contributions to the registries. Required datasets are succinct, thereby minimising data entry burden. This has produced high participation rates which are closely representative of the eligible population. In return hospitals and clinicians are provided with high quality reports which are up to date and risk adjusted.30

Opportunities that registries provide

Well designed and managed clinical registries provide clinical information which is richer, more reliable and more credible than information generated from hospital administrative systems.31 Analyses based on clinical data are respected by clinicians and patients. A comparative review by Cohen in 2014 demonstrated that the Cardiac Care Network Registry in Ontario, Canada, provides relevant clinical details with greater accuracy when compared with administrative databases.32 Data from the registry were found to be more robust for informing best practice cardiac clinical care pathways and evidence-based cardiac procedures. Information provided by registries therefore enjoys a high level of trust by clinicians, health managers, governments, private hospital groups and funding bodies.

The use of registries to monitor health care quality and safety is supported by patients. Analyses show that as long as appropriate measures are taken to ensure data security and confidentiality, the majority of patients acknowledge the value of registries and the necessity to collect identifying data, and accept the requirement for registries to operate under opt-out consent with scope for linkage to other datasets.33

The purpose and scope of patient registries are expanding. Aside from the principal function of monitoring and benchmarking the appropriateness and effectiveness of clinical care, registries can provide the foundation for opportunities to undertake evidence-based health care reform. The potential for articulation with best practice pricing incentive schemes has been highlighted above. Registries also provide a way of generating an early warning of lowered outcomes and a means to share learnings from high performing units, such as those with lower infection rates. Examples of other opportunities provided by registries include clinician and facility performance assessment and credentialing; greater accountability and transparency through public reporting; performance-based reimbursement; value-based purchasing; the development of evidence-based practice guidelines; enhanced post-market surveillance of medical devices and pharmaceuticals; monitoring trends in utilisation and access to care; supporting cost-effectiveness studies; and the provision of infrastructure with which to conduct clinical trials and comparative effectiveness studies.5,29,34

Patient-reported outcome measures (PROMs) are increasingly being introduced into registries,35 providing a personal perspective on the expectations and impact of surgery. For example, the Victorian Severe Trauma Registry and the Victorian Prostate Cancer Registry both collect and report PROMs at a time of clinical stability. The Arthroplasty Clinical Outcomes Registry in NSW reports pre- and post-operative PROMs, and health-related quality of life, for primary and revision procedures (Box 7).36 In the UK, the National Health Service requires the routine measurement of PROMs for all patients undergoing total knee or hip arthroplasty (http://content.digital.nhs.uk/proms). In Sweden, almost all units performing total hip arthroplasty are administering PROMs before and after surgery.37 The respective registries in those countries collect and report such data.

There is increasing evidence that registries demonstrate good value for money, that is, improved health outcomes at lower cost.38–40 In 2012, Larsson and colleagues calculated that if the US had a registry for hip replacement surgery that encouraged reductions in surgical revision rates comparable with those attributed, in part, to the presence of the Swedish registry, the US might have avoided $2 billion of an expected $24 billion in total costs in 2015 for these surgeries.39

Barriers to effective reporting

Barriers to registry development are well documented.41–45 Adequate funding is a problem that registries share with many other health care initiatives. Funding aside, the principal barriers to the development of clinical quality registries in Australia are:

reluctance of some health care providers and organisations to supply source data;
poor interoperability between clinical information systems leading to unnecessary duplication of data entry;
limited availability of the skills (clinical, epidemiological, biostatistical) and resources (advanced and secure data systems) to run national registries; and
data governance burdens and constraints, including restrictions on the disclosure, collection, linkage and reporting of patient level data.

Notwithstanding successful efforts to develop new registries20 and improve established registries, these barriers persist for clinical groups and registry experts wishing to improve the quality of information and level of participation in registries in Australia.

Beyond the barriers

To address these barriers, the Australian Commission on Safety and Quality in Health Care worked with jurisdictional representatives and registry experts to develop a framework detailing national arrangements under which patient level data may be routinely and securely disclosed, collected, analysed and reported. The Framework for Australian clinical quality registries46 (endorsed by the Australian Health Ministers’ Advisory Council in March 2014) describes a mechanism by which government jurisdictions and private hospital groups can authorise and secure record-level data, within high priority clinical domains, to measure, monitor and report the appropriateness and effectiveness of health care. Application of the Framework to registries provides assurances to jurisdictions, private hospital groups, clinicians and patients, that registry data and the systems that hold those data have satisfied minimum security, technical and operating standards.

The establishment of a number of national clinical quality registries for high burden, high variance conditions or interventions is a cost-effective38–40 way of addressing Australia’s information gaps in order to effectively monitor the appropriateness and effectiveness of health care. The development of one national registry per clinical domain — rather than multiple state and territory-based registries all attempting to monitor similar indicators — has obvious efficiencies and is more likely to attract funding. Well designed registries are an increasingly important component of clinical practice47 and health system monitoring. The provision of timely, relevant and reliable feedback about patient care to clinicians drives improvements in health care quality. Improved reporting of registry information on the appropriateness of care is likely to improve adherence to evidence-based practice.

Box 1 –
Vascular access type at initial treatment, by time to referral for haemodialysis in Australia, 2008–2012

Source: reproduced with permission from ANZDATA Annual Report 2013, Ch 5: Haemodialysis, Fig 5.75.11

Box 2 –
Proportion of admissions in which venous thromboembolism prophylaxis was administered to eligible patients within 24 hours of admission to an intensive care unit, 2010–11 to 2014–15

Source: data provided by the Australian and New Zealand Intensive Care Society, July 2016.

Box 3 –
Proportion of patients assessed for functional status (activities of daily living) within three days of admission to a hospital rehabilitation ward, 2002–2015

Source: data provided by the Australasian Rehabilitation Outcomes Centre, Australian Health Services Research Institute, University of Wollongong, July 2016.

Box 4 –
Proportion of patients in the unstable phase with an effective care plan implemented in 3 days or less

Source: data provided by the Palliative Care Outcomes Collaboration, Australian Health Services Research Institute, University of Wollongong, July 2016.

Box 5 –
Hospital adherence to process indicators for stroke care

Hospital stroke care

All episodes

Ischaemic

TIA

Patients admitted to a stroke unit

5847/7608 (77%)

3904/4583 (85%)

992/1489 (67%)

Patients who received intravenous thrombolysis (tPA) of an ischaemic stroke

476/4583 (10%)

Patients discharged (not deceased while in hospital)

6744/7400 (91%)

4115/4481 (92%)

1470/1474 (99.7%)

Patient discharged on an antihypertensive (if not deceased while in hospital)

4661/6555 (71%)

3044/4027 (76%)

969/1440 (67%)

Patients who received a care plan at discharge (if discharged home or to RACF)

2046/3713 (55%)

1122/1996 (56%)

651/1289 (51%)

Source: Australian Stroke Clinical Registry Annual Report 2013, Table 7, p.29.22 na = not applicable. RACF = residential aged care facility. TIA = transient ischaemic attack. tPA = tissue plasminogen activator. Unknowns coded as no; inpatient death determined using National Death Index data.

Box 6 –
Compliance with best practice standards for hip fracture patients in the United Kingdom, 2009–2012

Source: prepared with permission from data in the National Hip Fracture Database National Report 2012 – Supplement, Table 1.25

Box 7 –
Pre- and post-operative patient-reported outcome measures (Oxford Hip Scores [OHS]) for hip arthroplasty — all hospitals, 2013

Source: reproduced with permission from Arthroplasty Clinical Outcomes Registry, 2013 Annual Report, Fig 7.1.36

[Correspondence] No health without peace: why SDG 16 is essential for health

We live in an increasingly globalised world in which almost 34 000 people a day are forced to flee their homes because of conflict and persecution.1 Refugees are increasingly moving into more traditionally stable countries, often risking their lives in the process, catalysing public health crises anew. As of 2015, more than 65 million people have been forcibly displaced worldwide; more than 20 million of them since 2011.2 The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), established in 1949, provides humanitarian assistance through education, health-care, and relief and social services, to some 5 million Palestine refugees alone in Lebanon, Jordan, Gaza, the West Bank, and Syria.

Bulk billing falls back, patient costs rise

The GP bulk billing rate has fallen back and patient out-of-pocket costs have jumped in what could be an early sign that the Federal Government’s Medicare rebate freeze is forcing general practices to increase patient charges to stay financially viable.

Repeated AMA warnings that medical practices were being driven by the rebate freeze to reduce or abandon bulk billing and hike patient charges have been leant weight by Health Department figures showing the bulk billing rate fell from 85.9 to 85.4 per cent in the September quarter while out-of-pocket costs surged 4.5 per cent to reach an average of $34.61.

While the AMA urged caution in reading too much into one quarter’s figures, the results could be the first confirmation of fears that Government policy is pushing up the cost of seeing a GP, including for vulnerable patients, such as those with chronic illness or on welfare.

“We know that the patient rebate is in many cases inadequate to maintain quality medical practice,” AMA President Dr Michael Gannon said.

In their search for ways to stay afloat, practices appear not only to be cutting back on bulk billing but also looking to charge non-bulk billed patients more.

Government figures show the average patient contribution increased at more than six times the pace of inflation in the September quarter, a heavy financial blow to households already stretched by near-stagnant wage growth, fuelling fears that patients will increasingly defer or forego seeing a doctor.

While decrying the “obsession” of both sides of politics in using the bulk billing rate as a measure of the quality of health care people receive, Dr Gannon said the Medicare figures nonetheless highlighted the importance of the Medicare rebate in funding primary health services, and the consequences when it failed to keep pace with the cost of providing care.

“The statistics show that Australians pay above-average out-of-pocket expenses, which is a sign that patient rebates are inadequate in funding our health system,” he said.

But Health Minister Sussan Ley claimed the latest Medicare data showed GP bulk billing rates remained at record high levels.

Seizing on figures showing the bulk billing rate in the September quarter was almost 1 percentage point higher than the same period last year (84.6 per cent), Ms Ley said the result was an affirmation of the Government’s policies.

“These ongoing increase in bulk billing rates are underpinned by our record investment in Medicare, which is increasing by $4 billion over the next four years,” the Minister said.

But Shadow Health Minister Catherine King said the quarterly result belied the Minister’s claims.

“This is the evidence Malcolm Turnbull didn’t want revealed – bulk billing is dropping and he knows it,” Ms King told reporters. “Australians are already seeing the impact of his six-year Medicare freeze every time they go to the doctor with more and more patients having to pay out of their own pocket.

“On the day before the election Malcolm Turnbull promised that no Australian would pay more to visit the doctor – this was a complete and utter lie.

“The Government needs to pull their head out of the sand and admit that their health policies are hurting Australians.”

AMA President Dr Michael Gannon has directly lobbied Prime Minister Malcolm Turnbull to immediately end the rebate freeze, warning that the increasing financial squeeze on medical practices was forcing many to cut bulk billing and increase patient charges in order to remain financially viable.

Medicare rebates have been frozen since 2014, and under current plans will not be indexed until at least 2020.

Ms Ley has talked down hopes that the policy could be reversed soon, arguing the Government cannot afford to recommence indexation until its finances improve.

The Government is due to release its Budget update next month, but the Parliamentary Budget Office has reported a further deterioration in the Government’s finances, projecting that the deficit will balloon to $105.1 billion by 2018-19 – an $8.9 billion blow out from the Budget.

The latest Medicare statistics show the bulk billing rate for the September quarter ranged from a high of 88.7 per cent in New South Wales to a low of 60.3 per cent in the Australian Capital Territory.

Latest news

[Series] The scale, scope, coverage, and capability of childbirth care

All women should have access to high quality maternity services—but what do we know about the health care available to and used by women? With a focus on low-income and middle-income countries, we present data that policy makers and planners can use to evaluate whether maternal health services are functioning to meet needs of women nationally, and potentially subnationally. We describe configurations of intrapartum care systems, and focus in particular on where, and with whom, deliveries take place.

UK’s ‘stunning own goal’ could feed doctor exodus

The British Government has been accused of a “stunning own goal” over its muddled plan to make the country self-sufficient in doctors by the middle of the next decade.

Just days before Prime Minister Theresa May told senior National Health Service officials there would not be any more money for public health services when the Government issues a financial update this month, Health Secretary Jeremy Hunt announced an extra 1500 home-grown doctors would be trained each year from 2018 in order to reduce the nation’s reliance on international medical graduates.

Under the plan, which the Government said would cost £100 million (A$160 million) in its first two years, doctors would be fined £220,000 (A$352,000) if they left the NHS before completing a minimum four years of service.

The goal is to make the country self-sufficient in doctors by 2025.

Mr Hunt outlined the plan as a response to concerns that a shortage of medical practitioners is contributing to overwork and poor morale among NHS doctors.

Ms May also portrayed it as a way to reduce the country’s reliance on practitioners from overseas to help fill workforce gaps – an issue with heightened implications given the UK’s decision to cut ties with the European Union.

But, coming against the backdrop of a bitter dispute over the Government’s attempts to impose new work contracts on junior doctors, the policy has been criticised by some as ham-fisted and ill-conceived.

Harrison Carter, co-Chair of the British Medical Association’s medical students committee, told The Lancet the initiative was poorly directed and failed to address the underlying problems afflicting the UK’s medical workforce.

“It’s a stunning own goal by the Secretary of State [for Health],” Mr Carter said. “[The Government] needs to deal with the underlying issues causing doctors to walk away from the NHS.”

A recent survey of 420 British doctors who have graduated in the past decade found that 42 per cent planned to practise overseas, because their experience of work was worse than they had expected. A further 16 per cent said they had “taken a break” from their medical career.

The results have underlined concerns that the bruising industrial battle over work contracts, which involved unprecedented strikes, has created significant ill-will and disillusionment among junior doctors, encouraging many to look elsewhere to develop their careers.

Dr John Zorbas, Chair of the AMA Council of Doctors in Training, told the Financial Times that there was strong interest among young UK doctors about working in Australia.

“When I speak to my overseas trained colleagues already working here, interest from UK doctors in training about working in Australia is high,” Dr Zorbas said. The AMA has written to the UK Government about the [NHS] dispute, which is no doubt impacting on the morale of doctor sin training in the UK. Unfortunately, it appears the Government’s agenda is more about an attack on working conditions than improving the quality of care for patients.”

Mr Carter said Mr Hunt’s plan to create extra training places and impose a four-year service requirement was no solution.

“This is not the way to address the crisis in morale in the profession,” he said. “What they will be faced with is doctors who are disillusioned, with low morale, and who will be bound to their job, not because of desire but because of an obligation.”

His concerns have been echoed by Royal College of Physicians Registrar, Andrew Goddard, who told The Lancet that although the extra training places was welcome, an extra 1500 graduates a year was not enough.

There is also dismay at the way the Government has sold its policy, particularly remarks by the Prime Minister regarding overseas trained doctors.

In an interview following the announcement, Ms May should doctors from overseas would stay “in the interim period until the further number of British doctors are able to be trained and come on board”.

While the PM later clarified her comments to say that overseas trained doctors did not have to leave, senior figures in the profession said the remarks were damaging.

“I think it is really dangerous to start thinking that all overseas doctors are about to go home,” Medical Schools Council Chief Executive Katie Petty-Saphon told The Lancet. “We really appreciate the work of overseas doctors…and the NHS would fall over without them. They are welcome here and they need to stay here.”

Mr Carter said the Prime Minister’s comment betrayed confused thinking within Government over the push to self-sufficiency in doctors.

He said if the goal was to train local doctors to take over roles currently filled by overseas trained practitioners as well as meeting the growing need for health care, the Government would need to train many more than just 1500 extra a year.

“There is no way that by 2025, with the 1500 who will come in [from] 2018, we will be anywhere near being self-sufficient,” Ms Petty-Saphon said.

Adrian Rollins

Mental health groups urged to boycott new plan

A prominent mental health advocate has blasted the Government’s draft Fifth National Mental Health Plan as “rubbish”, and called on mental health groups to boycott the consultation process.

The plan was released for consultation on 20 October, with Health Minister Sussan Ley describing it as “an important document” that was “focused on actions that will genuinely make a difference for consumers and carers”.

“The Fifth Plan contains seven priority areas, which have been identified for action in close collaboration with the mental health sector,” Ms Ley said in a statement.

But Professor John Mendoza, the former head of the Mental Health Council of Australia, said the plan would simply continue funding late-term intervention at the expense of prevention and early intervention.

Professor Mendoza called on colleagues at an international mental health conference in Brisbane that the consultation process should be boycotted.

“The plan does not reflect the Prime Minister’s commitment at the election ‘to leave no stone unturned when it comes to mental health’,” Professor Mendoza told The Australian, adding that the plan was “mealy-mouthed rubbish” designed by bureaucrats with no institutional knowledge.

“The plan does not take us one step further in relation to the Government’s announcements last November when it responded to the National Mental Health Commission report and it strongly endorsed the national commission’s recommendations.”

Professor Mendoza said that Prime Minister Malcolm Turnbull had used the words “we need to really embrace innovation, we have to focus on the mental wealth of the nation”.

“And he was stating that because it was clear to him that the economic drag on Australia now, through its focus on acute, late-intervention services rather than early intervention and prevention, means that we have hundreds of thousands of Australians who are unable to participate in work, who are unable to complete education, who are unable to sustain and maintain relationships, because they simply can’t get access to the care they need,” Professor Mendoza said.

“The Commission said this isn’t good enough, we need fundamental reform. And the Government said that was what it was going to do.

“Now, the Fifth Plan that’s been released for consultation does nothing of the sort.

“It pays no attention to the Government’s reform agenda, and it certainly doesn’t marry up with what either the Queensland and NSW Governments [are doing] – two different sides of politics, both of them have articulated clear plans.

“This national plan is completely devoid of any specific actions, any measures, any targets.”

The seven priority areas are:

Integrated regional planning and service delivery;
Coordinated treatment and support for people with severe and complex mental illness;
Suicide prevention;
Aboriginal and Torres Strait Islander mental health and suicide prevention;
Physical health of people living with mental health issues;
Stigma and discrimination reduction; and
Safety and quality in mental health care.

The Department of Health and Mental Health Australia will hold consultation meetings in all capital cities, as well as Townsville and Alice Springs, in November and December.

The final plan will be considered by the Australian Health Ministers’ Advisory Council and the COAG Health Ministers’ Council early next year.

Maria Hawthorne

Whooping cough booster faces axe

The Federal Government may axe the whooping cough vaccine booster for first year high school students as it pulls plans for an Australian Schools Vaccination Register.

An immunisation expert group has been asked to review the pertussis vaccine schedule, including the need for a booster currently being administered to children in secondary school.

The Government has announced that the Australian Technical Advisory Group on Immunisation (ATAGI) has been asked to “provide advice on the clinical place and effectiveness of the pertussis vaccine schedule, including the pertussis booster currently given in the first year of high school”.

Currently, it is recommended that infants receive a dose of the diphtheria-tetanus-acellular vaccine at two, four and six months of age, with further boosters at 18 months and four years. An additional booster is given between 12 and 17 years.

The review comes at a time when the number of whooping cough cases is in decline – about 16,000 cases have been notified so far this year, well down from the 22,500 infections reported in 2015.

But the decline has come not long after the country’s largest-ever recorded outbreak of the disease, between 2008 and 2012, including 38,732 notified cases in 2011 alone.

The National Centre for Immunisation Research and Surveillance said whooping cough was a “challenging” disease to control because immunity waned over time, and epidemics occurred every three to four years.

The Centre said declining immunity was a factor in the last major outbreak, during which 4408 people were hospitalised, including 1832 babies. Between 2006 and 2012, 11 died from pertussis, all but one of them infants less than six months of age.

The review of the pertussis vaccination schedule coincides with the decision not to proceed with the creation of the Australian Schools Vaccination Register.

The Health Department said it had discontinued the tender process for the creation of the Register following advice about the review of the pertussis booster vaccine for secondary school students and the end, in 2018, of the catch-up varicella vaccination program for adolescents.

The Register was announced in the 2015-16 Budget as part of the No Jab No Pay policy, and was portrayed as vital in helping to controlling infectious disease outbreaks by identifying areas where vaccination coverage was low.

But Health Minister Sussan Ley said it had now been “put on hold…pending further advice from independent medical experts on the vaccination needs of adolescents”.

The Health Department said it was possible that the Schools Register would only hold data on the human papilloma virus (HPV) if the pertussis booster for adolescents was axed and once the varicella catch-up vaccination program ends.

The Health Department said it was now looking at alternatives to the Schools Register, including the inclusion of such data in the whole-of-life Australian Immunisation Register which began operations on 30 September.

It is also in discussions with the Victorian Cytology Service about continuing the HPV Register in 2017.

Commonwealth Chief Medical Officer Professor Brendan Murphy was keen to assure that these changes would have “no impact on the health of adolescents because the full range of vaccination services are being delivered to the community, and will continue to do so”.

The move to axe the Register has coincided with the release of Government figures showing that almost 200,000 children have had their vaccinations brought up-to-date following the introduction of the No Jab No Pay reforms.

The figures, reported in the Sunday Herald Sun, show that since the reforms were introduced on 1 January, 86,562 families, including 102,993 children, have been denied childcare payments, and $38 million of Family Tax Benefit A benefits have been suspended. Parents of 8896 children are still not meeting vaccination requirements.

But 183,000 children have had their vaccinations brought up-to-date as a result of the program, under which parents face losing Family Tax Benefit A and childcare payments if they let their child’s immunity slip.

Adrian Rollins

Penny pinching threatens chronic care reform

The Federal Government’s landmark Health Care Homes reform is at risk of collapse because of a lack of funding, the AMA has warned.

Health Minister Sussan Ley has announced that $100 million will be provided to support the phase one trial of the reform, involving 65,000 patients and 200 medical practices in 10 regions across the country.

Under the Government’s plans, practices will receive monthly bundled payments worth an average $1795 a year to manage patients with chronic and complex health conditions. Payments will vary from $591 for chronically ill patients who can largely self-manage their condition to $1267 for those who need more intensive care and $1795 for those with the most complex health demands.

The allocations mean that patients on the lowest level of subsidy will be funded for just 16 visits to the doctor a year, rising to 48 visits a year for those deemed of highest need.

Controversially, such patients would only be eligible for five extra Medicare-subsidised visits to the doctor for health issues that lie outside their chronic illness – a major change from the current system under which patients have uncapped access to GP care.

A spokesperson for Ms Ley told Fairfax that five-visit cap was only an “indicative figure for modelling and planning purposes”, and said no patient would have their access to Medicare restricted or capped.

Ms Ley said Health Care Homes allowed for team-based, integrated care and would provide increased flexibility and coordination of services to tailor treatment to individual need.

But the details of the trial have reinforced suspicions that the Government is undertaking Health Care Homes primarily as a cost cutting exercise, and the AMA voiced concerns that if the reform was not adequately funded it could founder.

“The modelling is concerning and potentially leaves the whole program at risk of falling over because of being underfunded from the beginning,” AMA Vice President Dr Tony Bartone told News Corporation.

Dr Bartone, a GP, is the AMA’s representative on the Government’s Health Care Home Implementation Advisory Group, which last met on 30 September.

He said that, if appropriately funded, Health Care Homes could support GPs to keep patients healthier and out of hospital, but added the Government needed the goodwill of general practitioners if its trial was to succeed.

“That goodwill will evaporate significantly if there is not the appropriate funding,” he warned.

Earlier this year, AMA President Dr Michael Gannon warned that appropriate funding would be a “critical test” of the success or otherwise of the reform.

“BEACH data shows that GPs are managing more chronic disease. But they are under substantial financial pressure due to the Medicare freeze and a range of other funding cuts,” Dr Gannon said.

“GPs cannot afford to deliver enhanced care to patients with no extra support. If the funding model is not right, GPs will not engage with the trial and the model will struggle to succeed.”

Adrian Rollins

Australians shedding their hard drinking image

Drinks sales are forecast to decline as growing numbers of Australians cut back on their consumption or quit altogether, in a sign that higher excises and lock-out laws are helping to curb the nation’s drinking problem.

Industry analyst IBISWorld expects per capita alcohol consumption, which has already dropped to a 50-year low, will continue to decline until at least the middle of the next decade as people heed health messages and respond to higher prices, drink-driving laws and other measures by reducing their intake.

The analyst predicts that by 2024 consumption will drop to 8.54 litres per person, a fall of almost 20 per cent from the start of this decade.

“We’re seeing increasing health consciousness among the under 30s, while at the other end of the market people are also drinking less,” IBISWorld senior analyst Andrew Ledovshkik told The Australian Financial Review.

The analysis echoes the findings of an Australian Institute of Health and Welfare report showing that consumption is declining, with 22 per cent reporting they had abstained from drinking in 2013 (up from 17 per cent in 2004), and the proportion who have never had a full drink reaching 14 per cent.

Even rates of risky drinking are declining.

The AIHW reported an 11 per cent drop in the rate of Australians drinking at risky levels on a single occasion (from 2950 to 2640 per 10,000 people), and 13 per cent drop who indulge in risky drinking over a lifetime, from 2080 to 1820 per 10,000.

The declines have paralleled changes to the cost and availability of alcohol.

The excise on beer and spirits is indexed twice a year and for some beverages has reached $81.21 per litre of alcohol. Wine is treated differently and is subject to a so-called equalisation tax currently set at 29 per cent of its wholesale value. Public health advocates are critical of the arrangement and argue that alcohol should be taxed at a minimum unit price that applies regardless of the beverage.

Several State governments, most notably New South Wales and Queensland, have also acted to restrict outlet trading hours and impose lock-outs in response to alcohol-fuelled assaults and murders.

The Institute said the results suggested that strategies including increasing the price of alcohol, restricting trading hours and reducing the density of outlets “can have positive outcomes in reducing the overall consumption levels of alcohol”.

Aside from making alcohol more expensive and difficult to get, there are signs that younger people are less inclined to drink to the same extent as older generations.

In the United States, a survey of 67,000 youths and adults conducted by the Abuse and Mental Health Services Administration found that just 9.6 per cent of adolescents aged between 12 and 17 years reported drinking alcohol in 2015, down from 17.6 per cent in 2002.

The question is whether others drugs are being used as a substitute for alcohol.

In the US, there has been a slight drop in heroin use, but prescription drug use and abuse is high. It is estimated that about 19 million Americans aged 12 years or older misused prescription drugs, mainly painkillers, in the previous year.

In Australia, about 3.3 per cent of those 14 years or older have used analgesics for non-medical purposes in the previous 12 months, 10 per cent have used cannabis, 2.1 per cent have used cocaine and methamphetamine, 2.5 per cent have used ecstasy, 1.3 per cent have used hallucinogens and 0.1 per cent have used heroin.

But even with the decline in its consumption, alcohol remains a major health problem. It was the leading cause of disease burden for the under 45s in 2011, and alcohol use disorders accounted for 1.5 per cent of the total burden of disease that year.

Adrian Rollins