More Medicare funding goes to wealthy kids: why, and what can we do about it?

When Medicare was in early development, the goal was to provide affordable, basic health care to all Australians. But a new study has found Medicare spending is higher for children from high socioeconomic backgrounds than their poorer counterparts.

Previous studies looking at the distribution of funding of Medicare have focused on adults. They show poorer adults are more likely to consult GPs and richer adults more likely to consult specialists.

The overall funding provided by the government favours those with low income once you control for health-care needs.

For our new study, we used the Longitudinal Study of Australian Children, a large study assessing over 10,000 Australian children over time, and linked this to the children’s Medicare data.

From this, we assessed the amount of Medicare spending on children according to five family income groups, from poorest to richest. We made adjustments to the analysis to make sure we were comparing children with equal health needs.

The results of our study show Medicare is fair for government spending on GP consultations for children, but it’s not fair for spending on specialists and testing. Overall, Medicare spending was also not evenly distributed, particularly in the first year of life.

The blue line on the graph indicates equal or fair Medicare spending, with a curve below the blue meaning more is spent on richer children.

Children from higher income households gained a greater share of Medicare resources over the first 1,000 days of their lives. For children aged zero to one year, the richest 20% used 30% of specialist resources, and the poorest 20% of children used only 12%. As the children grew older, the payments became more even.

This is a worrying finding, as we know the first 1,000 days of a child’s life are critical for future health, education and well-being. Children need more health services early in life, and a healthy early childhood is increasingly recognised as protecting against chronic disease in older life. For example, low birth weight is related to increasing rates of heart disease, diabetes and bone disease in adult life.

Possible explanations

There are many efforts in Australia to ensure all children receive fair health care such as vaccinations, child health nurse visits, bulk billed GP visits and additional school services.

Part of the problem could be the patient payment that is often required when seeing a specialist. A recent study found an average co-payment of A$127 to see a paediatrician in Australia, with some costing much more.

This may be a barrier to poorer families using specialists for their children’s care. According to the Australian Bureau of Statistics, around 8% of people in Australia who need health care report delaying or not seeking care because of cost.

Another explanation could be getting specialist health care to children in rural areas, away from large children’s hospitals.

What can be done?

One solution could be to have salaried paediatricians whose services are low or no-cost available in the community, including rural areas. Preferential visits would then be given to lower income children and those with greater health needs.

Seeking solutions to these problems, particularly for poorer children and rural children in the early years of life, is critical to the health of our nation. Work is still required to achieve the vision that Medicare be simple, fair and affordable for all Australians.

Kim Dalziel, Associate Professor Health Economics, University of Melbourne; Harriet Hiscock, Principal Fellow, Department of Paediatrics, The University of Melbourne, Murdoch Childrens Research Institute; Li Huang, Health Economist, University of Melbourne, and Philip Clarke, Professor of Health Economics, University of Melbourne

This article was originally published on The Conversation. Read the original article.

[Comment] Taxes for health: evidence clears the air

Non-communicable diseases (NCDs) are the leading cause of premature death in most of the world, and lower income households in most societies bear a disproportionate share of the associated preventable deaths. The papers by the Lancet Taskforce on NCDs and economics1–5 are a welcome addition to the evidence we need for reducing this disease burden. The papers show yet again that the necessary prevention and control measures for NCDs are multisectoral. The Lancet Taskforce on NCDs and economics highlights the role of fiscal policies in encouraging healthy diets and lifestyles to reduce the largest contributors to preventable NCDs—namely, smoking, harmful alcohol consumption, and obesity.

Your AMA Federal Council at work

Dr Chris Moy	Federal Council Area representative for South Australia & Northern Territory	Australian Digital Health Agency My Health Record Expansion Program Steering Group	8/8/217 & 7/12/17
Prof Mark Khangure	Member of AMA Federal Council and AMA Health Financing & Economics Commttee	ADHA My Health Record Diagnostic Imaging Programme Steering Group	5/11/17
Dr Richard Kidd	Chair – Council of General Practice	My Aged Care Gateway Advisory Group	05/03/18
Dr Richard Kidd	Chair – Council of General Practice	PIP Advisory Group	09/03/18
Dr Richard Kidd	Chair – Council of General Practice	DVA Health Provider Forum	12/04/18
Dr Richard Kidd	Chair – Council of General Practice	PIP Advisory Group	13/4/2018
Dr Tony Bartone	AMA Vice President	TGA Consultative Committee	10/04/18
Dr Gino Pecoraro	Federal Council Member – obstetrician/gynaecologist	National Strategic Approach to Maternity Services Advisory Group	06/03/18
Dr Beverly Rowbotham	Chair of Federal Council	ADHA My Health Record Pathology Steering Group	23/04/18

Communiqué from March Federal Council meeting

DR BEVERLEY ROWBOTHAM, CHAIR, FEDERAL COUNCIL

Federal Council met in Canberra on March 16 and 17. Debate was robust as always and productive, with numerous Position Statements approved for adoption. These will be released to members and the public over coming weeks.

The President reported, as is our usual practice, in a town hall format, with questions of the President from Councillors and some debate. The President reported that the AMA had maintained a very high media profile over the summer period, with many press releases on summer lifestyle issues. These included avoiding heat stress, drinking in moderation, and driving safely. There were also significant Position Statements released, including the AMA Position Statement on Mental Health, which attracted a lot of positive interest from the mental health community.

In the week prior to the Federal Council meeting, the President had released the Public Hospital Report Card, highlighting the need for continued investment by Federal and State Governments in our public hospitals.

The major focus of discussion at this meeting was the recent actions of Bupa in announcing changes to its cover, which will impact doctors and patients alike. Federal Council urged the President to maintain his advocacy on the issue.

The Secretary General’s report again highlighted the scope of activity underway within the Federal AMA secretariat and the success of AMA advocacy on behalf of members; workforce initiatives; the granting by the ACCC of a further authorisation to permit certain billing arrangements to benefit general practices; discussions with the Department of Health on its review of medical indemnity insurance schemes; the raft of reviews relevant to reforms to private health insurance; the ongoing MBS reviews, and much more.

Federal Council considered a proposal for the introduction of post nominal letters to denote membership of the AMA, a move that has been long in the gestation. Further work is required before the Board considers amendments to the By Laws to make provision for the introduction.

Another key discussion was the change to the format of National Conference this year with the introduction of a day of policy debate. This change is being made in response to feedback from delegates that the opportunity for debate on issues by delegates needed to be enhanced. Federal Council considered a number of draft policy resolutions put forward by the membership, which will be further refined before distribution to delegates attending National Conference. Participation in the debate on the resolutions will be open to all AMA members attending the Conference, whether as an appointed delegate or fee-paying member.

Public health working groups brought forward a Position Statement on Men’s Health, and on Drugs in Sport. Council debated the issue of funding of access to bariatric surgery in the public health system. It also agreed to establish two new working groups to look at the issues of child abuse and neglect, and health literacy.

The Ethics and Medico Legal Committee tabled a revision to the Guidelines for Doctors on Managing Conflicts of Interest in Medicine, which was approved by Council. It is part of a wider piece of work before the Committee, looking at relationships between medical practitioners and industry.

Federal Council approved a new Position Statement on Diagnostic Imaging; and another on Resourcing Aged Care. The latter is one of the many advocacy documents in development or under review as part of the AMA’s expanded work on aged care issues. Council noted the report on the recent AMA survey of doctors’ views about providing care in aged care settings, noting the anticipated decline in the number of practitioners providing care.

A recent meeting of the Health Financing and Economics Committee had considered the issue of value based care as a model with the potential to concurrently increase hospital efficiency and improve patient outcomes. Quality data is needed to inform this work within public hospitals.

The Task Force on Indigenous Health, which advises the President on issues relevant to Indigenous health, continues its close involvement with Close the Gap initiatives. Its 2017 report card on ear health continues to be well received.

The various Councils of Federal Council provided their reports. The Council of Private Specialist Practice is monitoring the various reviews of private health insurance, including out of pocket costs and options to manage low value care in mental health and rehabilitation.

The Council of Doctors in Training (DiTs) discussed proposed reforms to bonded medical workforce schemes. The AMA has been active in influencing changes to the schemes which the Council of DiTs has strongly endorsed. The Chair of the Council of DiTs reported on the very successful AMA Medical Workforce and Training Summit held on 3 March 2018. The Summit brought together more than 70 important stakeholders in medical workforce and training to discuss the concerns of the AMA and many others in the profession with the distribution of the medical workforce, the long-standing imbalance between generalist training and sub- specialisation, the workforce position of different specialties and the growing evidence of a specialty ‘training bottleneck’ and lack of subsequent consultant positions.

The Council of General Practice tabled two Position Statements for approval. The first dealt with General Practice Accreditation and the second provides a Framework for Evaluating Appropriate Outcome Measures.

Federal Council supported a motion put forward by the Council of General Practice to endorse funding of universal catch-up vaccines through the National Immunisation Program for anyone living in Australia wishing to become up to date with clinically appropriate NIP vaccinations, irrespective of age, race, country of origin and State or Territory of residence.

The Council of Rural Doctors reported on its recent meeting with the new Rural Health Commissioner, Professor Paul Worley and discussions on the national rural generalist pathway.

The final item of business, but by no means the least important, was the adoption by Federal Council of a position statement on the National Disability Insurance Scheme, which followed a detailed discussion on the Scheme at the November meeting of Council.

Federal Council now prepares for the National Conference and its last meeting with its current membership in May. Elections are underway for several positions on the Council, evidence of increased member interest in its work.

Bringing pharmacists into the fold

BY DR RICHARD KIDD, CHAIR, AMA COUNCIL OF GENERAL PRACTICE

It has been almost three years since the AMA put forward its proposal to make non-dispensing pharmacists a key part of the future general practice healthcare team. Our advocacy on this issue has not wavered and since we launched our policy more evidence has accumulated to support the valuable role pharmacists can play when they are integrated into the general practice team.

General practice pharmacists would enhance medication management and reduce hospitalisations from adverse drug events (ADEs). An independent analysis from Deloitte Access Economics (DAE), which was released with the AMA’s proposal, showed that integrating pharmacists into general practice would deliver a benefit-cost ratio of 1.56. If general practices were supported to employ non-dispensing pharmacists as part of their healthcare team, they would be able deliver real cost savings to the health system, of $1.56 for every dollar invested.

An in-house pharmacist would be able to assist GPs address overprescribing and medication non-adherence by patients. We would see better coordination of patient care, improved prescribing, improved medication use, and fewer medication-related problems. Hospitalisation rates from ADEs would fall and our patients’ quality of life would be improved as would their health outcomes.

A recently released research article in the International Journal of Clinical Pharmacy, titled Pharmacists in general practice: a focus on drug-related problems, shows that where pharmacists are working within a general practice that their recommendations are more readily accepted by practice GPs.

This bears out research published in 2013 titled An evaluation of medication review reports across different settings, which had similar findings. Access to the patient’s medical file and the relevant clinical information within when conducting a medication review enabled recommendations that were more targeted and less conjectural. The recommendations from these better-informed reviews resulted in greater acceptance of the pharmacist’s recommendations by the GP.

With chronic disease on the rise, and an ageing population, it is estimated that there are more than 700,000 patients with co-morbidities who would benefit from a review of their medications. This figure represents just the top 10 per cent of patients who could benefit from having their medications reviewed. In-house pharmacists could be a valuable resource for patients in understanding their medications and how to use them.

With over 230,000 medication related admissions to hospitals every year at a cost of $1.2 billion per annum and patient medication non-compliances estimated at 33 per cent, the time has well and truly come for action on this front.

With another trial; utilising non-dispensing pharmacists in 14 medical centres across the greater Brisbane area; winding up, the AMA Council of General Practice is looking forward to hearing the interim results.

With increasing evidence that where pharmacists are integrated within general practice patient care is improved, the AMA continues to advocate for Government funding to make this an everyday reality for general practice and for patients.

[Comment] Offline: Why we must learn to love economists

George Bernard Shaw once remarked that, “If all economists were laid end to end, they’d never reach a conclusion.” Since the global financial crisis of 2007–08, economists have suffered a sharp loss of intellectual confidence. Some critics have rejoiced. Yet the fact remains that economics is the discipline that orders our world. Its locus of influence is the national Treasury. It is finance ministers who have the most decisive say about a country’s priorities. For health advocates, we have two choices.

[Perspectives] Seven decades of fighting the five giants: a work in progress

On Dec 1, 1942, queues stretched from His Majesty’s Stationery Office along High Holborn in London, UK. By lunchtime all copies of Sir William Beveridge’s groundbreaking report, Cmd 6404 Social Insurance and Allied Services, had been sold. It was much the same story in provincial cities around the country. In Liverpool my father secured the two-volume report that today takes pride of place in my study. Beveridge’s report sits alongside works by others who have guided me in my public health career: Brian Abel-Smith, Douglas Black, Ann Cartwright, Karen Dunnell, Margot Jeffries, Jerry Morris, Richard Titmuss, Peter Townsend, and many others associated with the London School of Economics.

What will the next health reform agreement bring?

BY ASSOCIATE PROFESSOR SUSAN NEUHAUS, CHAIR, HEALTH FINANCING AND ECONOMICS COMMITTEE

The Health Financing and Economics Committee (HFE) has a very keen interest in the likely direction and detail of the next public hospital funding agreement that will take effect from 2020.

Negotiations between the commonwealth and State Health Ministers will begin in earnest in 2018 but early signs of the likely reform agenda are emerging, with some consistent themes coming to the fore. Unsurprisingly, most of these themes are a continuation of the changes to public hospital financing agreed by all Australian Governments in June 2017 as documented in the National Health Reform Addendum.[1] Whether States and Territories agree is hard to predict and will likely depend on how much new funding, and over what period, the Commonwealth Government is prepared to offer it.

The themes in the Addendum we would expect to see considered as part of a 2020 agreement are:

i. improve patient outcomes;

ii. decrease avoidable demand for public hospital services;

iii. improve the coordination of care for patients with chronic and complex conditions to reduce avoidable demand for hospital admissions for this group;

iv. incentives to reduce preventable, poor quality patient care; and

v. incorporate quality and safety into hospital pricing and funding to reduce poor quality patient care: sentinel events, hospital acquired complications and avoidable readmissions.

Recent media speculation[2] [3] suggests Minister Hunt will seek COAG agreement to reward jurisdictions that can demonstrate improved patient outcomes, with the goal of readmissions over the short term being avoided.

Such a move may also represent the first step towards ‘outcome based’ hospital funding. Media speculation[4] also suggests the government will frame the push as a reduction in ‘low value care’. It is likely not coincidental that the Productivity Commission released a report on 24 October 2017 that recommends low value care in public hospitals should not be funded[5]. Of course, what is finally argued by the Commonwealth in the lead-up to the negotiations with State Ministers is yet to be seen – but it is clear they are laying the groundwork.

On the topic of coordinated care, it is worth noting that jurisdictions already have the ability to enter bilateral agreements to trial coordinated care initiatives, for the 2017-2020 period. These are intended to inform the development of an evidence-based national approach in the 2020 funding agreement – but clearly we are also in early days of this work.

The National Health Reform Addendum reforms might be worthy in the abstract – it is hard to argue against improved patient outcomes, a reduction in preventable poor quality patient care, better care coordination across the boundary of admitted/non-admitted care – especially for patients with one or more chronic conditions.

But whether they are they worthy in practice depends entirely on how they are implemented. For example, shifting public hospital funding away from payments based on cost and quantity to a formula based on patient outcomes represents a massive organisational change for the public hospitals delivering the care. They will require substantial additional funding to build the necessary organisational capacity. And this will take time.

Outcome-based funding will also require substantial new government investment in data infrastructure to collect and measure robust clinical patient outcome data – not just patient reported outcomes, which may or may not be clinically relevant. It must include patient outcomes in the non-admitted setting. This capacity does not yet exist. We first need robust, consistent primary healthcare data definitions used and recorded by all primary healthcare providers. The primary and tertiary outcomes data must be linked. And if the Government is serious about linking outcomes to funding and ‘quality’ then it would need to develop an entire framework of quality-adjusted life year (QaLYs) per episode of care. Overcoming the constraints and barriers inherent in a health system that is structured within a federated system of government is no small feat, nor will it be cheap.

So far, the AMA has been bitterly disappointed in the Government’s opportunistic use of the ‘improved safety and quality’ agenda to do little more than reduce the Commonwealth’s share of public hospital funding. My Australian Medicine article published on the September 18, 2017 summarises this. The AMA will be carefully examining the detail of the 2020 health care agreement to ensure it is a genuine effort to empower public hospitals, including in providing them with the resources they will need to successfully transition to outcomes based funding with improved care-coordination. These are massive reforms that will require time, a clearly articulated evidence-based pathway and substantial new Commonwealth investment, not less.

[1] Schedule I – Addendum to the National health Reform Agreement: Revised Public Hospital Arrangements, p1, 2017.

[2] Parnell S GP Patient Incentives – Rewards to reduce crush in hospitals Weekend Australian 29/7/2017 p10-11

[3] Avoiding hospital admissions a priority, The Pharmacy Guild of Australia, 27 September 2017

[4] Martin P Education, health face shake-up, The Age, 23 October 2017 p 4

[5] Shifting the Dial:5 Year Productivity Review, Productivity Commission, 2017

New boss for Health Department

Prime Minister Malcolm Turnbull has appointed career public servant Glenys Beauchamp the new Secretary of the Department of Health.

She took up the post on September 18, following the resignation of former Health Department chief Martin Bowles.

Ms Beauchamp has had an extensive senior-level career in the Australian Public Service and was most recently the Department of Industry, Innovation and Science Secretary.

Her roles before that included: Secretary of the Department of Regional Australia, Local Government, Arts and Sport (2010–2013); Deputy Secretary in the Department of the Prime Minister and Cabinet (2009–2010); and Deputy Secretary in the Department of Families, Housing, Community Services and Indigenous Affairs (2002–2009).

She has more than 25 years’ experience in the public sector and began her career as a graduate in the Industry Commission.

Ms Beauchamp has also held a number of executive positions in the ACT Government, including Deputy Chief Executive, Department of Disability, Housing and Community Services and Deputy CEO, Department of Health. She also held senior positions in housing, energy and utilities functions with the ACT Government.

In 2010, she was awarded a Public Service Medal for coordinating Australian Government support during the 2009 Victorian bushfires.

She has an economics degree from the Australian National University and an MBA from the University of Canberra.

Mr Turnbull described Ms Beauchamp as a highly experienced departmental Secretary.

CHRIS JOHNSON

Commitment to safety and quality or new cuts to Commonwealth hospital funding?

BY ASSOCIATE PROFESSOR SUSAN NEUHAUS, CHAIR, HEALTH FINANCING AND ECONOMICS COMMITTEE

A key focus of the Health Financing and Economics Committee (HFE) is the pricing and funding of public hospitals.

Public hospitals are a critical part of our health system but remain historically and chronically underfunded. They struggle to manage the demands of aging populations, the burden of chronic disease and new technologies and treatments.

At the April 2016 COAG meeting, the Commonwealth committed an extra $2.9 billion to hospital funding. At the same time they secured State and Territories agreement to:

“Incorporate safety and quality into the pricing and funding of public hospitals services with the aim of improving health outcomes, avoid funding unnecessary or unsafe care and decrease avoidable demand for public hospital services.” (IHPA, Consultation Paper on the Pricing Framework for Australian Public Hospital Services 2018-19 p4)

In February 2017, the Commonwealth Minister for Health directed the Independent Hospital Pricing Authority (IHPA) to reduce the level of Commonwealth contribution to activity based hospital pricing for:

i. Sentinel events;

ii. Hospital acquired complications (HACs); and

iii. Avoidable readmissions.

The events listed in each category are developed by the Australian Commission on Safety and Quality in Healthcare. See Sentinel Events List of Hospital Acquired Complications (HACs). The list of avoidable readmissions is due for release later in 2017.

The Independent Hospital Pricing Authority Consultation Paper on the Pricing Framework for Australian Public Hospital Services 2018-19 detailed implementation timeframes and pricing adjustment methodology for the three categories of safety and quality events.

1 July 2017 Sentinel events will not be funded.

1 July 2018 HACs funding will be reduced by a patient “risk adjusted” factor.

1 July 2018 Avoidable hospital readmissions funding will be reduced.

The AMA supports sensible and well-considered initiatives to improve safety and quality in our public hospitals. The AMA wants to see a reduction in HACs and avoidable readmissions but does not endorse the use of Commonwealth financial penalties as an effective way to achieve this. Adverse outcomes result from a complexity of patient and institution factors. If hospitals are overstretched and under-resourced, errors are more likely to occur and less likely to be recognised or remediated.

Safety and quality funding penalties will not assist these hospitals to lift performance. It will instead entrench a spiralling decline in the hospital’s capacity to undertake the internal changes needed to focus on safety and avoid future penalties.

The HAC list

The HFE Committee also questioned the validity of some of the HACs that will incur a financial penalty. Examples include:

i. Malnutrition – Patients admitted to hospital with pre-existing skin eruptions that have, with exclusion of other causes, been diagnosed in hospital as nutrition related. The hospital should not be financially penalised for diagnostic accuracy;

ii. Respiratory complications – aspiration pneumonia. Superficially this seems a reasonable HAC inclusion except it may occur through no negligence, for example as a non-preventable consequence of “grand mal” fit;

iii. Gastrointestinal bleeding – A patient with gastric bleeding secondary to biopsy of melanoma metastasis. While bleeding in this setting is an identifiable risk, it was not avoidable; and

iv. Delirium is another poorly defined HAC that should be excluded.

Patients are unique and respond to treatment differently. Unless a root cause analysis is undertaken it will not be possible to justifiably attribute the event or apportion all of the adverse consequence to “poor or mismanaged public hospital care”.

The timeframe before HAC penalties take effect from 1 July 2018 is too rushed. A three to four month HAC shadow data collection (July–Sept 2017) will not permit reliable indications of financial impact on jurisdictions or identify unintended negative outcomes for patients as hospitals adapt to the financial penalty risks.

We raised similar concerns about the rush to penalise public hospitals for avoidable readmissions from 1 July 2018. The AMA wonders how genuine the planned stakeholder consultation will be given the avoidable admissions list will not be known until late 2017 and IHPA must report to COAG before they meet on 30 November 2017.

The AMA wants to see significantly less HACs and genuinely avoidable readmissions in public hospitals but does not endorse the rushed, bizarre notion that financial penalties will lead to a positive culture of hospital improvement in a severely underfunded and chronically overloaded system. Safety and quality improvement is more likely in “no blame” hospital reporting cultures such as those adopted in Norway and Denmark and recommended in 2014 by the European Commission. I have grave concerns that much of the progress public hospitals have made to date in areas of open reporting and transparency will be lost in the move to a defensive, financially penalised performance system.