The 2010 Rudd plan: will it actually deliver better health services?

After a prolonged gestation, we are now witnessing the somewhat protracted birth of the Rudd Government’s health reform plan. To date, only the head of the new scheme has come into view.1 For those who remain anxious about the overall health of the infant, and indeed whether it has all of its necessary parts, we have been provided with an attractive slogan — “funded nationally and run locally” — rather than a clear blueprint for action.

It may surprise and distress many Australians to learn that our health system is ranked 32nd in the world for overall performance.2 The main reason for this rather ordinary outcome is that we have progressively institutionalised a chaotic and increasingly inequitable system. The National Health and Hospitals Reform Commission clearly identified a range of major problems that should be the focus of any proposed changes.3 These included:

• lack of sustainability, which included finance, infrastructure and manpower;

• lack of access to key services, specifically highlighting mental health, dental and aged care services;

• divided responsibilities for care, not only between the federal government and the states, but also across the private–public and hospital–community sectors;

• growing health service inequalities, notably affecting Indigenous peoples and those who live in rural and regional communities;

• lack of continuity of health care that results in poor quality, high cost and largely ineffective forms of care for those with chronic illnesses; and

• lack of routine use of data monitoring to drive increased clinical and financial accountability.

The Prime Minister’s first health reform announcement focuses narrowly on increased federal government support for public hospital financing.1 This is an essential first step and will clearly be welcomed by the wider Australian community. There is no doubt that the decline in confidence in our public hospitals is based largely on the belief that they have been starved of funds. The proposal to now extend the 1990s activity-based funding model across the nation responds directly to that concern. Fortunately, it has been updated in 2010 to recognise the need to reinvest in research and training, as well as support ongoing infrastructure development. Although it is not clear when substantial new monies will enter the system, at least we are headed for the situation where the government that collects the most tax will now pay most of the increasing costs.

Importantly, governments in Australia now fund only 70% of all health care costs.4 This gap is high by international standards, and in recent years there has been a clear trend towards transferring increasing costs to those who fall ill. Obviously, this has its greatest impact on those with chronic illness and those who have the least capacity to pay. Unfortunately, the new plan provides no details as to the ongoing roles of private hospital, medical or dental services. The ways in which private health insurance (or alternative health savings models) could be better used to supplement universal coverage are also not discussed.1 Consequently, it is uncertain whether the new finance arrangements will actually lead to a reduction in the current inequalities in access to timely care.

The other key structural change, namely the introduction of Local Hospital Networks,1 is a direct response to the health professions’ and the wider public’s lack of faith in both federal and state health bureaucracies. While this is obviously smart politics, it is not necessarily smart health policy. The dangers of further Balkanisation of health planning, greater fragmentation between hospital and community-based services, and the promotion of intense local service rivalries are obvious. Unnecessarily, the local network plan is hospital-centric and bound to perpetuate the blame game between these federally funded but state-governed local authorities.

As new regional health care organisations are progressively introduced to lead the next round of primary care reform, the existing gaps between local hospitals and community-based services may worsen. We will now have 120–150 Local Hospital Networks that are structurally disconnected from 50–60 new general practice-based primary care organisations. Meanwhile, other more specialised community services such as mental health, alcohol and drug services, and maternal and child health services have been left in limbo. Without a clear national commitment to finance and run these systems, the most likely outcome is that they will be left to rot under the existing state-based funding models.5 Given the increased community focus on these issues,6 the continuing lack of attention to their future sustainability is inexplicable.

For the Rudd plan to achieve real credibility, it needs to explain how a 60-year-old man in rural Australia without private health insurance will now get a timely hip replacement or affordable cataract surgery. Even more challenging are questions such as: how will a 50-year-old Indigenous woman with diabetes, arthritis and dental decay get access to the primary care, dental and other allied health services that she really deserves; or how will a 19-year-old man who has recently attempted suicide receive the ongoing help he desperately needs? If Mr Rudd cannot easily explain how the new system will assist these people, then the current round of national health reform may well be stillborn.