You can learn a lot about the future of Australian medicine by visiting the United States. Although I am home from my New York sabbatical, a short return trip allowed me to hear President Obama outline his plans for US health care reform to the American Medical Association. He noted that the American health care system is unfair, unaffordable and headed for bankruptcy. Paraphrasing loosely, it has features that are downright “un-American”.

Strengths of the Australian system are the single payer (Medicare) for medical consultations and universal coverage. These will not happen in the US — Obama went out of his way to explain this. If they are not going to happen under Obama, it seems unlikely they will happen in the foreseeable future. The Obama plan does include what he calls the “public option”. This will make government-run health insurance — now available only to federal government employees — also available to the general population (or perhaps just the poor). Even this tentative move towards universal coverage has been heavily criticised by the Republican right as the first step on the pathway to the “evils” of socialised medicine. Unfortunately for the Obama plan, a significant number of Democratic senators don’t approve either.

The worry is apparently that if the government starts supplying health insurance widely, it would compete with the private insurance industry. This would be un-American for many in the US, where the concept remains that the best health-funding system is a private one. The private system could be weakened by publicly funded insurance, as people moved from the private to the public not-for-profit sector. This assumes that the government insurance would be cheaper and would therefore entice people and employers away from private health insurance companies. In the end, the reasoning goes, the private system would collapse. Thus, the plethora of insurance plans will remain under the Obama plan and continue to bamboozle Americans. A new system making private insurance plans easier to compare is Obama’s weak solution to the current mess.

Despite these negative features, there is much for us to learn from Obama’s eloquent speech and cleverly crafted US health care plan. He proposed to make it illegal for insurance companies to discriminate against people with pre-existing illness in obtaining medical insurance. This aligns with the Australian community rating-based system. He also proposed to reduce payments to hospitals with excessive early readmission rates. This would encourage hospitals to plan for patients’ mid- and long-term outcomes, rather than short-term state — something for Australia to think about.

Obama pointed out that, in the US (and I suggest also in Australia), too much is spent on treatment that does not work. He particularly criticised incentives and other payments to doctors in the current US fee-for-service system, which he said encouraged doctors to do more tests and treatments than were medically needed. A collective cheer went up when he said that any health plan should allow doctors to be healers, rather than business people.

However, the doctors in the audience went quiet when Obama, a lawyer, said he would not introduce a cap on malpractice claims, as he considered this would be unfair to patients.

President Obama pointed out that there had been many unsuccessful attempts to modify the US health care system in the past. Whether or not the public insurance option is accepted, many elements of Obama’s plan will have direct relevance for Australia. He recommended that spending should increase on research to determine which medical care works best, pointing out that less than 50% of all cardiac care in the US is based on evidence. Large increases in funding for research on evidence-based clinical care and mechanisms for disseminating this information to doctors would have a substantial impact on American health care and would be (with perhaps some modification) directly relevant in Australia.

In addition, the suggestion that mobile, accurate electronic records would be a goal of the plan may lead to technology that is directly applicable here. A major flaw in our health care system is the lack of ready access to accurate, verifiable medical data on sick patients. This is an even bigger problem in the more fragmented US system. If the problem is successfully addressed there with new technology, it could have major benefits for Australia.

Although that part of the plan sounds good, it may contribute to the increasing potential for medical identity fraud, which I will discuss in my next postcard.