Health services administration

The well publicised difficulties encountered in managing the recently exposed failure of breast implants manufactured by Poly Implant Prothèse (PIP) have pushed the issue of device regulation into the spotlight. In this issue of the Journal, we address the issue of device regulation and the role and performance ...

Annette Katelaris

A window of opportunity for change The current health care reform process is remarkable for its lack of attention to private non-general practice (non-GP) specialist services. About 23 million ambulatory visits are made to non-GP specialists each year, and $1.6 billion of the Medicare budget flows to these services. For the patient, effective collaboration between his or her various health care providers is essential for safe, high-quality care. This is particularly so when the patient is consulting more than one non-GP specialist. An individual with type 2 diabetes, for example, might be seeing an endocrinologist, a nephrologist, a cardiologist and perhaps others, in addition to his or her general practitioner and allied health providers.1 The final report of the National Health and Hospitals Reform Commission (NHHRC) noted the key role of non-GP specialists in the shared management of care for patients with complex and chronic health needs, and recommended improving access to a more comprehensive and multidisciplinary range of primary health care and specialist services in the community through the establishment of Comprehensive Primary Health Care Centres and Services, available for extended hours.2 However, the current reforms are concerned almost exclusively with public hospital, general practice, community and primary care services. While GP Super Clinics may provide consulting facilities for visiting medical specialists, there are currently only 64 implemented or planned across Australia, and there is no formal requirement or policy incentive for functional integration between non-GP specialists and members of the primary health care team working in the same GP Super Clinic.3 So is there a problem? Potentially, yes. The vast majority of non-GP specialists in private practice are highly skilled, committed practitioners. Nevertheless, the lack of a comprehensive policy framework means that access to private specialist services is determined largely by market forces. This is most apparent in the geographical maldistribution of the medical workforce, with relatively few non-GP specialists choosing to work outside metropolitan areas. Moreover, almost no improvement in specialist–population ratios in remote and rural areas is expected over at least the next 8 years.4 Even in metropolitan areas, there is a tendency for private specialists to practice in affluent areas, limiting the choice available to patients in more deprived areas, whose mobility may be reduced by poverty or disability. And yet it is in socioeconomically deprived areas that patients are more likely to suffer multiple chronic diseases.5 It is striking that about 80% of general practice consultations but only 27% of non-GP specialist appointments for ambulatory care are bulk billed.6 The average gap between the fee charged by a non-GP specialist and the Medicare benefit received by a patient who is not bulk billed is $46.12. A recent Australian Bureau of Statistics (ABS) survey found that about 10% of Australians referred to a non-GP specialist delayed or did not keep the specialist appointment because of cost.7 Unlike in general practice, there are no Medicare incentives for non-GP specialists to bulk bill for most consultations. The Medicare Safety Net helps, but it is clear from the ABS data quoted above that up-front billing can exceed the cash reserves of many patients. A further potential problem with the lack of a policy framework for private non-GP specialist services is the risk of lapses in quality and safety. All medical practitioners in Australia are required to provide evidence of participation in continuing professional development at the time of annual registration but, unlike the accreditation process for general practices, there is no requirement for the quality review of non-GP private specialist practices, with the exception of imaging providers and laboratories. Lapses in the quality of non-GP specialist care are likely to be rare, although few rigorous data exist, but when they occur the implications can be disastrous.8 A more common threat to quality and safety may be lack of timely communication with the patient’s general practitioner following every consultation by another specialist.9 This can have major ramifications for a patient with complex care needs. There is very little point in a doctor seeing and advising a patient without communicating with the other health practitioners involved in his or her care. Radiologists, pathologists and non-medical health practitioners who provide Medicare-rebateable services following referral are required to supply a report to the referring doctor, and it seems reasonable for such reporting to be universally expected of all referred services. No systematic data exist, but general practitioners report frequent frustration at the lack of timely communication from other medical colleagues.10 These difficulties are further compounded by failure to implement the NHHRC’s recommendation of strategies to assist patients living with complex health problems to adopt a single general practice as their “health care home” responsible for continuity and coordination of care.2 So what is required to address these problems? Medicare Locals are currently being rolled out across Australia, replacing Divisions of General Practice, and will be required to work with local clinicians — including Lead Clinician Groups and presumably individual specialists — “to identify and remedy service gaps and breakdowns in service integration and coordination”.11 However, their ability to bring about change at regional level will be limited without a national policy framework that includes provisions relating to non-GP private specialist practice. General practitioners receive incentive payments for bulk-billing concession card holders and children. For reasons that are not clear, other specialists only receive bulk-billing incentives for telehealth consultations. A Medicare incentive for non-GP specialists to bulk bill consultations and other services for concession card holders and children would help to address the financial barrier faced by many patients. Such an incentive would also help redress the potential differential in revenue for specialist practices between affluent and deprived communities. A bulk-billing incentive would be more socially just than the current Extended Medicare Safety Net (EMSN) which, on the ABS evidence cited above, fails 10% of referred patients. A review published in 2011 found that some 53% of EMSN benefits were distributed to the 20% of the population living in Australia’s most socioeconomically advantaged areas, whereas the 20% living in the most disadvantaged areas received only 3.7% of benefits.12 Medicare rebates should be contingent on a report being provided for all referred medical services, not only pathology and imaging services. It will become easier to ensure that such reports are accessible to all treating health professionals once the impediments to a national personally controlled electronic health record are overcome. Incentives are required for all health practices, not just general practices, imaging providers and laboratories, to undergo regular accreditation. The present Australian health reform process provides a window of opportunity to develop and implement policy changes relating to private non-GP specialist practice, ensuring that the considerable public funding flowing to this sector of the health system achieves the most effective and equitable contribution to the nation’s health.

Tim P Usherwood MD, FRACGP, FRCP

To the Editor: In reply to my critics whose letters were published in the 20 February issue of the Journal1-4 after the publication of my article “What is wrong with Medicare?”,5 I would ask them to look broadly at Australia’s health care dollar and how it may be misspent. It is clear that the percentage of practitioners who wilfully set out to defraud Medicare, Veterans’ Affairs, workers compensation and other forms of insurance is relatively small. However, the current structure of Medicare, which is the result of poor policy decisions, allows inappropriate practice, as well as inefficiency and cost-shifting. Inertia in health care reform will continue to diminish our ability to deliver a first-world standard of care into the future. My critics would do well to consider this.

Tony D Webber

To the Editor: Non-surgical cosmetic procedures have rapidly increased over the past 15 years, and although there are no reliable figures for Australia, there was an eightfold increase in such procedures in the United States between 1997 and 2010.1 Practitioners in the cosmetic field are seeing more frequent complications (eg, burns, scarring) from laser treatments that have been performed by untrained or inexperienced operators, including beauty therapists. These treatments are often performed as walk-in procedures in shopping centres. A cosmetic surgery report to the New South Wales Minister for Health in 1999 outlined a number of issues with laser use in Australia.2 More than 12 years later, very few of these issues have been addressed. There are more regulations on the sale and use of laser pointers in Australia than there are for lasers in health care. The Australian/New Zealand Standard 4173:2004, Guide to the safe use of lasers in health care, limits and classifies lasers used for medical purposes according to the degree of hazard. The Standard recognises that all personnel using and handling lasers should have training appropriate to the task they perform.3 Queensland, Western Australia and Tasmania have some regulations regarding medical grade lasers, but there are currently no regulations enforcing the Standard in other jurisdictions. There is also no industry standard for the necessary skills, qualifications and training for use of lasers, or regulation of these. National guidelines for the use of medical grade (Class 3B and 4) lasers need to be developed urgently and should address several issues to protect consumers: Medical grade lasers should only be sold to medical practices where the operator can be observed by a doctor at least some of the time, and complications can be discussed with the doctor. Medical practices should be licensed under the relevant Radiation Act in each jurisdiction (eg, Radiation Control Act 1990 in NSW) and listed on a website. All users of the laser in each licensed practice should be registered and individually licensed. National guidelines for accredited laser-safety courses should be established, ensuring adequate training and certification for obtaining a licence.

Charles Cope

Each year, over 1000 medical device incidents are reported to the Australian Therapeutic Goods Administration (TGA). The most recent published statistical reports from this scheme show 926 reports in 6 months (January–June 2009), of which 597 resulted in serious injury and 25 were associated with patient death. The 3 Fr peripherally inserted central catheter (PICC) is a medical device commonly used in infants ...

Joel M Dulhunty MB BS, MTH, PhD · Andreas Suhrbier BA, PhD · Graeme A Macaulay BEng(Med) · Jennifer C Brett BEng(Med) · Alexa V A van Straaten BA(Hons), MA, MPhil · Ian M Brereton BSc, PhD · Jillann F Farmer MB BS, FRACGP, FRACMA

The challenge of removing what’s useless, harmful or cost-ineffective It’s easy to forget that the evidence-based approach to medicine is still relatively new, and that a substantial part of health care is not supported by gold-standard evaluation. New procedures, until very recently, have had no requirement for rigorous testing, unlike new drugs. Of the more than 5000 items on the Medicare Benefits Schedule (MBS) today, most “have never been comprehensively assessed for their safety, effectiveness and/or cost-effectiveness”.1 But now many more interventions will be exposed to the chill winds of evaluation. And those that don’t shape up could become targets for “disinvestment” — withdrawal of funding from existing treatments. Although not explicitly mentioned, disinvestment is part of the thinking behind recent developments in Canberra. Announced in the current Budget, a “comprehensive management framework” for Medicare strengthens assessment of new treatments, and introduces “rolling reviews” of existing interventions, to assess quality, safety and fee levels.2 Systematic methods will be developed to inform “appropriate amendment or removal of existing MBS items”. Judging by the progress of several “demonstration reviews”, clinicians nervous about threats to their livelihoods needn’t worry too much. Sensitive about perceptions of taking something away, the federal government is treading warily — using maximum engagement with affected specialties. For example, despite finding colonoscopy use had jumped an extraordinary 84% in just a decade, the review of this procedure gave it a big thumbs up.3 The most comprehensive review is the ongoing whole-of-specialty review of ophthalmology. A report has been produced by Adelaide Health Technology Assessment, at the University of Adelaide, advised by a clinical working group from the Royal Australian and New Zealand College of Ophthalmologists (RANZCO) — in close collaboration with the health department.4 The report suggests a number of minor changes, including tightening the patient pool for a handful of Medicare items, but little in it is controversial. Importantly, assessing costs was strictly excluded. A key challenge in reviewing the evidence behind all the tests and treatments used by ophthalmologists was actually finding the evidence. Sometimes there was little published literature, so reviewers relied on guidelines built on consensus rather than on solid evidence. And existing procedures tended to be treated more leniently in the review than new procedures seeking funding today. Alex Hunyor, a representative of RANZCO who is intimately involved in the review, says some treatments, particularly medicines, lend themselves to randomised controlled trials, whereas with surgery often “the evidence is not necessarily of the type we’d like it to be”. He adds that, in cases where technology is evolving quickly, “we can’t necessarily say, ‘here’s the hard evidence’”. A high-profile example of a procedure without hard evidence from another specialty area is vertebroplasty. After a long battle between proponents and critics, trials showing no meaningful benefit, and an independent review, the government’s Medical Services Advisory Committee recommended dropping the procedure — a powerful example of disinvestment.5 Three clinical advisers disagreed with the recommendation, but it was accepted. The procedure no longer carries a Medicare rebate. In the United States, the failure to similarly disinvest in vertebroplasty has become a case study in the difficulty of withdrawing support from well established procedures unsupported by good evidence.6 Even in the United Kingdom, where debate is well advanced, decisions to disinvest are often not implemented in practice. Not surprisingly, the term “disinvestment” is little loved, rather than being seen as a positive attempt to bring scientific accountability to health care funding. “We’re trying to work together to get better value for money” is how the process is described by Ian Larmour from the Southern Health network of hospitals in Victoria, which has generated considerable savings using “therapeutic equivalence” to seek lower-cost medicines.7 It’s vitally important that Medicare’s rolling reviews are as rigorous and independent as they can be, to bring much needed scientific scrutiny to medicine’s vast back catalogue. Outcomes would be more credible if the influence of vested interests in the process was diluted, and the effectiveness, safety and cost of existing treatments was assessed with the same rigour applied to new ones. A healthy dose of disinvestment — no matter how unpleasant the term — may be required for those treatments where the balance of benefits, costs and harms is unfavourable. It’s not unhealthy rationing, it’s rational health policy.

Ray N Moynihan BA

Despite significant recent public investment in mental health, do we really know what Australia is getting for its money? In response to repeated inquiries revealing a profound crisis in the provision of mental health care services,1 Australia has committed to spending around $8 billion of new money on mental health since 2006. Few would argue that this investment was long overdue, given the significant gap between the funding mental health receives ($5.8 billion2 out of $113 billion of total health expenditure in the 2008–09 financial year3) and the contribution of mental illness to the burden of disease (13%).4 However, proper accountability for this expenditure is crucial. Health care consumers, carers, service providers, funders and taxpayers all have a right to know that funding for mental health is being spent judiciously, is targeted at the areas of greatest need, and is delivering better outcomes for people with mental illness. Establishing this accountability is not easy. The complexity of state and federal Budget announcements (and re-announcements) are the modus operandi of governments and perpetuate an environment characterised by opacity rather than transparency. After decades of underfunding for mental health services, new funding is often simply welcomed without query as to provenance or policy. In this article, we review the recent wave of mental health funding decisions in Australia. While we want to see the level of funding increase, such increases must be evidence-based, effectively delivered and transparently monitored. Recent mental health fundingThe major contribution to recent funding for mental health has been through the Council of Australian Governments (COAG) National Action Plan (NAP) on Mental Health 2006–2011.5 This provided $5.5 billion, comprising $2.2 billion from the Australian Government and $3.3 billion from the states and territories. However, analysis of Medicare Benefits Schedule (MBS) item reports shows that the uncapped growth in the Better Access to Psychiatrists, Psychologists and General Practitioners through the MBS (Better Access) initiative alone accounted for $2.1 billion by September 2011. It is concerning that, for such a sizeable investment, there have only been two NAP progress reports published, the most recent being released in September 2009.6 A subsequent COAG agreement in 2010 included $1.6 billion to be spent on subacute care, with an unspecified proportion to be allocated to mental health. Lastly, there is the federal government’s 2011 Budget announcement of a “record” $2.2 billion investment in mental health, partly funded through changes made to curb government payments under the Better Access initiative. A large proportion of this package was to enable continued funding of existing programs like Better Access, but the Budget also continued the government’s extensive investment in largely untested semi- or non-professional coordination of services (the Personal Helpers and Mentors Program) and “flexible” packages of care. There are as yet no data to assess how this new funding is progressing. In total, this new spending represents a significant public investment in mental health and, as such, deserves scrutiny. COAG National Action Plan fundingThe $5.5 billion committed in the 2006–2011 COAG NAP was allocated across four agreed action areas. However, there were no agreed definitions as to what activities could or should occur within each action area, and jurisdictions had complete autonomy over how money would be spent and reported. Consequently, there were significant variations in the funding allocations between jurisdictions (Box).6 Fully two-thirds of all NAP funding was allocated to Action Area 2 — “integrating and improving the care system” — while only 5% was allocated to Action Area 4 — “increasing workforce capacity”.6 The bulk of Action Area 2 funds went to the Better Access initiative. Supported housing options, community participation and employment (Action Area 3) remained secondary elements of the NAP, accounting for 17% of total funding allocations. In New South Wales, more than half the spending in this area ($58 million) was on one program — the Housing and Accommodation Support Initiative. Victoria pledged to spend about $44 million on growing its psychosocial rehabilitation sector, but over a 5-year period (2006–2011) this would barely cover anticipated price pressures and wage increases, let alone service expansion. Increasing access to mental health care was clearly a key goal of the NAP, but the evidence for progress is equivocal. The second NAP progress report certainly shows substantial service growth over the period 1997–2007, largely accounted for by the growth in Medicare-funded (Better Access) services.7 It reported that the proportion of the Australian population receiving clinical care for mental illness under Medicare rose from 3.1% in 2006–07 to 4.8% in 2007–08.6 However, the same progress report also shows that the proportion of the population accessing state-run mental health services dropped from 1.6% to 1.5%. Further, the National Survey of Mental Health and Wellbeing conducted by the Australian Bureau of Statistics in 2007 showed that treatment rates for people with a mental illness were unchanged since 1997.8 If the spending effort in Action Area 2 has not led to a discernible increase in treatment rates, then what substantive impact is this increased investment in traditional services having on mental health care in Australia? One explanation might be that new funds and new services are struggling to reach new clients. The data for state-run mental health services in the second NAP progress report indicate that this is the case for state and territory services. The current debate regarding the effectiveness and reach of the Better Access initiative is significant in this regard.9,10 There is evidence suggesting that groups who were missing out on care before Better Access are still missing out. In 2008, 68% of people using the Better Access program were using it for the first time. In 2009, this figure had dropped to 57%.11 The NAP progress report does not provide reasons for the variation in spending priorities between jurisdictions. There is no context to explain why Western Australia should allocate nearly a quarter of its funding to Action Area 1, while Queensland spent almost nothing (Box). Similarly, WA spent four times as much as South Australia on Action Area 3, and the Australian Capital Territory allocated 20% of its effort to workforce development, to which Victoria committed less than 1%. It is conceivable that these jurisdictional variations may be based on local service deficiencies and are therefore warranted. However, if this is the case, it is not clear how such deficiencies were identified. The NAP progress report shows a patchwork of jurisdictional investments rather than a coordinated national effort to address the agreed priorities. In the absence of nationally consistent definitions and accounting processes, it is impossible to verify whether jurisdictions really did spend what they reported. 2010 COAG agreement funding for subacute careThe 2010 COAG agreement to spend $1.6 billion on creating 1300 subacute beds, some of which are to be allocated to mental health, is also without transparency and agreed guidelines. In making this commitment to subacute care, COAG echoed the 2009 final report of the National Health and Hospitals Reform Commission, which stated: We recommend that every hospital-based mental health service should be linked with a multi-disciplinary community-based sub-acute service that supports “stepped” prevention and recovery care.12 There has been no progress report on the implementation of the mental health aspect of this agreement, but from public announcements it is possible to once again discern major variations in jurisdictional approaches. Queensland is building community care units, while SA is opting for supported accommodation places with crisis respite support. NSW is allocating all its subacute funding to new beds on hospital campuses. This variation between jurisdictions is not surprising, as there is no agreement on what constitutes subacute mental care. The term “subacute” does not appear anywhere in the National Mental Health Policy 2008 and is mentioned only once in passing in the Fourth National Mental Health Plan. Alternatives to hospital admission for mental health care in Australia are few. An unpublished national snapshot survey of acute psychiatric wards across Australia in 2006 indicated that 43% of all acute beds were occupied by people who could be cared for in other settings if suitable services were available. The investment in subacute care offers critical opportunities to build new services nationwide. However, competing priorities and a lack of consistent implementation may mean this opportunity could be lost. ConclusionDespite these increased investments, mental health’s share of overall health spending is shrinking. For the period 2004–05 to 2008–09, total mental health spending in Australia increased by an average of 4.8% per annum,2 while total health spending rose by more than 5%.3 There have been some 44 inquiries into mental health in Australia since the 1890s — about one every 2 and a half years. Despite these inquiries, and dozens of plans and policies, spending between jurisdictions continues to be uncoordinated, lacking both accountability and a focus on patients’ needs. There is little evidence to show that new mental health investments are driving improved health outcomes. For people with mental illness, the spectrum, capacity and quality of services available depends on where they live, and the quality of care goes largely unassessed. For real accountability, the new National Mental Health Commission must begin with a robust plan to identify and close service gaps based on evidence-based models of care. This should be accompanied by a National Report Card that includes nationally validated data of the experience of care, quality of life, and rates of homelessness, education and employment for people with a mental illness. Without this, no one will know if mental health funding is well targeted or just well meant. Council of Australian Governments (COAG) National Action Plan (NAP) on Mental Health 2006–2011 funding allocations, by action area and jurisdiction6 Action area* Jurisdiction 1: Promotion, prevention and early intervention 2: Integrating and improving the care system 3: Participation in the community and employment† 4: Increasing workforce capacity Total NAP ($ million) Australian Government 164.2 (8.2%) 1329.8 (66.7%) 369.5 (18.5%) 129.9 (6.5%) 1993.4 New South Wales 121.7 (12.4%) 721.6 (73.6%) 113.8 (11.6%) 23.3 (2.4%) 980.3 Victoria 97.7 (15.2%) 432.1 (67.0%) 110.6 (17.2%) 4.4 (0.7%) 644.8 Queensland 16.3 (1.7%) 717.5 (73.0%) 168.4 (17.1%) 76.9 (7.8%) 983.3 Western Australia 106.8 (22.1%) 216 (44.6%) 139.6 (28.9%) 21.5 (4.4%) 483.9 South Australia 47.1 (16.3%) 215.1 (74.6%) 22.1 (7.7%) 4.2 (1.5%) 288.5 Tasmania 2.2 (3.8%) 36.6 (62.4%) 11.3 (19.3%) 8.6 (14.7%) 58.7 Australian Capital Territory 5.1 (12.3%) 20.1 (48.3%) 8.1 (19.5%) 8.3 (20.0%) 41.6 Northern Territory 1.3 (8.6%) 13 (86.1%) 0.8 (5.3%) 0 15.1 Total 562.3 (10.2%) 3701.8 (67.4%) 944.2 (17.2%) 277 (5.1%) 5490.1 * Figures shown for each action area are $ million (percentage of total COAG commitment). Percentages may not sum to 100% because of rounding. † Including accommodation.

Sebastian P Rosenberg MPubAdmin · John Mendoza BEd · Lesley Russell PhD

To the Editor: Since the claims made by Webber in his recent article1 were, in his own words, not based on any substantiated data, it is disappointing that the Medical Journal of Australia did not seek to contact either the Australian Society of Ophthalmologists (ASO) or the Royal Australian New Zealand College of Ophthalmologists (RANZCO) for comment. Certainly, considerable work can be done to improve the operation of Medicare. We are on record as having raised our concerns with successive governments.2 However, Webber’s generalised, sensationalist and unsubstantiated claims add nothing to constructive debate about Medicare. It is disappointing that the Journal would risk damaging its reputation, by choosing to publish a perspective without offering an alternative view to demonstrate balance and evidence, as one would expect in a peer-reviewed journal. Ophthalmology involves more than just removing cataracts, and while technology has made cataract procedures safer and less invasive, they remain complex and the technology very expensive.3 The RANZCO and ASO have worked with government through the Medicare Benefits Schedule Review to address concerns and shortcomings, as well as providing supportive evidence.4 On at least two occasions, we have offered revisions to the funding of treatment of macular degeneration that could save many millions of dollars in the health budget. Additionally, our proposal to reinvigorate the key subspecialty of paediatric ophthalmology has been accepted by government.

Arthur Karagiannis · William J H Glasson

To the Editor: Webber raises some well meaning points in his recent viewpoint article, some of which were taken out of context by the media.1 With respect to his comments on ophthalmologists, I would like to place on record some facts. The Access Economics ophthalmology practice costs survey,2 commissioned by the Australian Society of Ophthalmologists (ASO) in 2011, analysed the costs of delivering ophthalmic services for the financial year 2008–09. The report showed that the average overhead cost per full-time-equivalent ophthalmologist was $506 000, compared with $232 617 in 19993 — an average annual increase of 9%, during which time fees for ophthalmology items on the Medicare Benefits Schedule (MBS) increased by only 2.1% annually.4 Thus, the MBS items become increasingly irrelevant in the context of a small private ophthalmic business model. The cost to the taxpayer of a cataract procedure in New South Wales public hospitals is about $3500 (diagnosis-related group), compared with a Medicare schedule fee of $731 (item 42702). Thus, the procedure can be performed privately for about 20% of the taxpayer cost. Clearly, private surgery is a very efficient use of taxpayer money for an operation with a quality-of-life-adjusted score of about 30 times what is considered cost-beneficial.5 The average eye surgeon performs fewer than half the cataract procedures per week than the 20 which Webber anecdotally claimed (and then multiplied by the entire cost of the procedure, presumably including the theatre fee and prosthesis). Webber is to be congratulated for speaking his mind, but ought to factually balance his writings. The ASO encourages other craft groups to commission their own practice-cost surveys when fiction needs to be separated from fancy.

Peter M Sumich

To the Editor: The “thinking doctor’s” Journal has degenerated to one for doctor’s random thoughts. The commissioned and peer reviewed article by Webber1 was disappointing. For many disenfranchised colleagues, the usual whinge over a cuppa at the local meeting is now plainly inadequate after this Medical Journal of Australia offering. The unsubstantiated claim about billions in Medicare “wastage”1 was reckless. The implication that the current cataract surgery rebate was poor value and had never changed was just plain wrong. Since the introduction of the Schedule of Medical Benefits, cataract surgery now requires entirely different surgical skills, implants a lens, and requires expensive, sophisticated equipment (for examples, see websites2-4). Patients can now expect vastly improved vision without the need for full-time visual aids. The rate of significant sight-threatening complications is now less than 7 in 1000 — one of the lowest complication rates in surgery. The rebate was reduced by about 40% in 1987, 10% in 1996, and 12% in 2009. Even before the last reduction, the total cost provided a significantly better gain (that is, lowest cost) in quality-adjusted life-years than any other surgical procedure,5 something conveniently ignored by the then Health Minister Roxon when cutting costs. With more than 500 ophthalmologists performing over 200 000 operations a year, the statistical distribution will certainly include the few surgeons performing high volumes of procedures or charging high fees, as it does with any other procedure listed on the MBS. Webber’s implied generalisation is totally invalid, as the distribution tail in no way represents the average. I am afraid that Webber has only provided us with sloppy commentary and cheap shots — nice if you can get away with it, but it is poor editorial policy.

Nigel Morlet

To the Editor: Webber is to be congratulated for his concise statement of the ills of Professional Services Review (PSR) audit,1 but his estimate of multiple billions being wasted each year is unsupported by evidence. This remark has already been picked up by several of the nation’s daily newspapers, and well suits those of certain political persuasions. However, it is also essential that the operation of the PSR be subject to scrutiny. The past performance of the PSR must be examined — including the correctness and consistency of the information it uses, its investigative processes, the defence evidence it does and does not accept, and the available avenues of appeal. These issues are all of great concern to doctors who have come to the PSR’s attention. I note that the most recent edition of Medicare’s Forum promises more Medicare audits.2 The fun has only just begun.

A Stuart Reece

To the Editor: I would like to add my perspective, after nearly 50 years of experience in Australian medicine, to the very welcome articles by Moynihan1 and Webber.2 A few months after Medibank (Mark I) was launched in 1975, a colleague and I wrote a satirical article called “How to rob Medibank blind”.3 We deliberately wrote this article anonymously, so that it could be judged on its merits, and not by its authors. It was picked up by the Sydney Sunday Telegraph and featured across its middle pages. The responses of the then Minister for Health, Ralph Hunt, and Australian Medical Association (AMA) president, Lionel Wilson, were, to paraphrase their words, “doctors are not like that!” This view was shared by Medibank architect, economist John Deeble, when I asked, 20 years later, why he and his co-architect Richard Scotton had designed “a mechanism with an accelerator pedal but no brakes”. They had, he said, not thought it necessary. Around that time, on behalf of the AMA, I advised on the restructuring of the Professional Services Review (PSR). I had been fortunate, meanwhile, to have chaired Professional Standards Committees of the New South Wales Medical Board, and to have sat on the bench of the NSW District Court Medical Tribunal, looking at alleged poor professional conduct. This opened my eyes to the small number of doctors whose standards were poor overall, and led to the Board’s performance assessment program. Many had also been investigated by Medibank or Medicare. Instead of having the PSR chasing illusionary and indefinable “over-servicing” by general practitioners (curiously, specialists were almost never investigated), I suggested peer review, whereby trustworthy, practising GPs or relevant specialists could advise on whether or not a doctor’s pattern of practice was inappropriate. This could be judged on an overall view of their work, much as was being done in the NSW Board’s Performance Program. Another decade later, as Chairman of the Doctors Health Fund (then the AMA Health Fund), I attended a small dinner in Melbourne with the chairmen of a few restricted membership funds and the then Minister for Health, Tony Abbott, who asked me to sit next to him. I asked pointedly how he could justify commercial corporations’ continuing to make profits for their shareholders out of Medicare benefits which were supposed to reflect the value of a doctor’s professional services. How could there be so much fat in the system that these corporations could cream off their substantial profits? His disappointing response was that it was too difficult to do anything about it. Webber is correct — both sides of politics are to blame.

Peter C Arnold

Do demographic changes alone explain our busy EDs?

Judy A Lowthian MPH, BAppSc(SpPath), LMusA · Andrea J Curtis BSc(Hons), PhD · Damien J Jolley MSc(Epidemiology), MSc, AStat · Johannes U Stoelwinder MD, FRACMA, FACHSE · John J McNeil PhD, FRACP, FAFPHM · Peter A Cameron MBBS, MD, FACEM

Our health system places great responsibility on doctors to act in the best interests of patients, and in the interests of the system itself. Laws and regulation apart, the system functions well primarily because practitioners act ethically and fairly. In return, society accords doctors considerable trust, respect and financial reward. There is no question that any abuses of this trust that occur need to be stopped. The Professional Services Review (PSR) scheme was established in 1994 to safeguard the integrity of Medicare and the Pharmaceutical Benefits Scheme by providing, according to the PSR website, “an effective peer review mechanism to deal quickly and fairly with concerns about inappropriate practice” (http://www.psr.gov.au/aboutpsr/history.asp). One of last year’s most controversial topics was that of the role and behaviour of the PSR. Despite a recent Pricewaterhouse Coopers draft report recommending substantial changes to the PSR, significant issues remain to be discussed (The Australian 2011; 28 Dec). In this issue we feature lively opinion pieces by two key players — Tony Webber (doi: 10.5694/mja11.11431), recently retired director of the PSR, and Scott Masters (doi: 10.5694/mja11.11560), a vocal critic of the PSR and a doctor who has himself been investigated by the PSR. Ray Moynihan (doi: 10.5694/mja11.11524) adds fuel to the fire, looking at the difficulties the PSR faces when investigating large medical corporations, an issue which was flagged by Webber at the 2011 Senate inquiry into the PSR scheme. “Quickly and fairly” are at the heart of the current dispute. Critics say that there is a lack of due process, and that it often takes years for the PSR to complete its investigations, resulting in enormous stress and financial loss for the practitioner involved. I think we should applaud Webber for his willingness to tell us an insider’s view. Whether one agrees with him or not, there is always a personal cost to the “whistleblower”. He is frustrated by the lack of audit and oversight of the huge public expenditure on health, and by Medicare’s failure to adapt to the pursuit of profit in medicine. He highlights the poor sense in a system that remunerates doctors for completing paperwork for a convoluted referral system instead of enabling them to refer directly to allied health providers. He notes that rebates for Medicare Benefits Schedule (MBS) items need to be constantly reviewed in the context of improved efficiencies and the adoption of new technologies. Webber is scathing of the design of the “safety net”, which he feels is open to easy exploitation by avaricious practitioners, and of cost-shifting by state health entities, in violation of the Council of Australian Governments National Health Care Agreements. Masters, on the other hand, argues that Medicare’s screening procedures for identifying doctors who will be reviewed by the PSR are blunt instruments that are unable to differentiate the bad from the busy. There is certainly support for this view, especially among doctors who work in poorly resourced settings. He articulates the problem of vaguely defined MBS item numbers that increase the vulnerability of practitioners to unknowingly misuse them. He is angry at what he sees as the lack of transparency in PSR processes and heavy-handedness of the organisation. The PSR is part of the audit process in our health system, which should reassure taxpayers that their money has been well spent. It is, in reality, a “defence” for honest and ethical doctors. The current debate is about process. A clear definition is needed of what data will be examined, along with the development and application of a transparent, respectful and efficient process of review.

Annette Katelaris MB BS, MPH, FRACGP

Lack of audit control and inability to adapt to change leads to massive waste As Director of Professional Services Review (a role established to protect the integrity of Medicare and the Pharmaceutical Benefits Scheme) for over 6 years, I gained an insider’s insight into how dysfunctional the Medicare/Medibank Scheme has become since the Health Insurance Act 1973 (Cwlth) was introduced. The then Minister for Health, the Hon. Bill Hayden, stated in his second reading speech that the purpose of the scheme was to create the “most equitable and efficient means of providing health insurance coverage for all Australians”.1 The universality of medical insurance coverage benefited all Australians, particularly those for whom a doctor’s visit represented a significant proportion of income. From the beginning, there were inadequate safeguards in a scheme based on the honour system. In no other area of public expenditure where recipients have significant control has so little attention been paid to audit. Medicare Australia administers over half a billion transactions every year for the Medicare Benefits Schedule (MBS) and the Pharmaceutical Benefits Scheme (PBS). Medicare is very efficient at its core business — that of distributing benefits. Electronic claiming has addressed criticism of earlier inefficiencies. However, Medicare’s ability to ensure benefits have been paid appropriately has never fully coped with the medical business environment. Extrapolating modestly from the misuse of the MBS, PBS and the Medicare Safety Net (financial assistance for high out-of-pocket costs for out-of-hospital MBS services) that I am directly aware of, I estimate that 2–3 billion dollars are spent inappropriately each year. Unfortunately, there are no attempts to quantify these losses more accurately. The reasons for this leakage are diverse. The MBS is riddled with misdirected incentives for practitioners, contains items that have not been reviewed despite advances in technology, and has many examples of good public policy thwarted by the MBS rules. In general practice, general practice management plans (GPMPs) and team care arrangements (TCAs) have created opportunities for a bonanza for some practices. Several practitioners I have reported on had admitted that their corporate owner had a business plan based on a defined number of these items claimed every week, irrespective of clinical need. Medicare Australia is also aware that a significant proportion of these plans are not carried out by a patient’s usual doctor’s practice.2 Anecdotally, claiming for clinically unnecessary GPMPs is significant throughout Australia. The policy intent of GPMPs was to provide a higher standard of care for patients with complicated chronic disease. While many doctors use these items appropriately for positive patient outcomes, a proportion of claimed items have added nothing materially to patient care. The TCA items are based on a model of care that works well in an inpatient setting, but does not translate to general practice. This item has created a whole industry of allied health practitioners and dentists who, through a TCA, draw on the public purse. Under a TCA, there is incentive for doctors to be pressured to provide the paperwork for “free” podiatry, physiotherapy, psychology, and dental care, facilitated by computer systems that can generate the necessary paperwork in minutes. The MBS rebate for a GPMP is $138.75, and for a TCA is $109.95. The policy intention was to allow patients with chronic or terminal disease to receive previously unaffordable care, but has created perverse incentives for all parties involved. This is bleeding several hundred million dollars per year as the policy intention is buried by inappropriate claims. The approach of the Department of Health and Ageing (DoHA) in not allowing discretion to doctors to refer purely on clinical grounds has led to this situation. The policy intent by government was sound. However, the DoHA developed MBS items that create incentives to easily misuse and work around the MBS requirements, leading to their misuse by a proportion of both medical and allied health practitioners. Some practitioners consciously misuse the MBS occasionally, and some do so regularly. The policy intent could have been achieved by allowing direct referral, without financial incentive to the doctor. This measure alone would have saved the health budget well over a billion dollars over the life of the program. Instead, a monster was created, eroding the integrity of the health budget. Items are added to the MBS after a long and exhaustive process of evaluation. This includes consideration of the skill level involved, the cost of necessary equipment, time taken for a procedure, and the overall cost–benefit to the community. However, once items are on the MBS, as long as they are still being used, they are rarely re-evaluated, and they attract the yearly rise in benefit level. Minister Roxon, in her first term as Minister for Health, bravely tried to reduce ophthalmologists’ fees for cataract surgery by 50%.3 These items were introduced when the procedure was not considered routine, took much longer than today, and required an inpatient stay of more than a week. The benefit reflected this. In the nearly 40 years since, technology has moved on and now this surgery can be performed under local anaesthetic as a day-procedure lasting 20 minutes. Private patients are sometimes charged more than $4000 for this procedure. In the end, the Minister was only able to achieve a 12% reduction on the MBS fee.4 The top providers of this item have performed more than 20 procedures in one day, according to Medicare Australia data. Not bad work if you can get it, but very poor public policy! The same lack of rigour in reviewing items also applies to gastroenterology and cardiology. While most gastroenterologists and cardiologists practise ethically, there are a few practitioners whose repeated use of procedures and investigations is highly questionable in patients whose clinical condition appears not to warrant them. However, there is no one asking the questions. The Medicare Safety Net is one of the most poorly thought-through pieces of health legislation. Despite its laudable policy intent — to help those with severe and chronic disease afford the cost of modern medical care — its implementation has gaping holes. The open-ended nature of the Safety Net offers the minority of unscrupulous and greedy practitioners opportunities to exploit it. After the Safety Net was introduced, a small group of obstetricians raised their fees for antenatal care from around $3000 to nearly $10 000. Such use of the Safety Net was perfectly legal, thanks to sloppily drafted legislation. During my time as Director of Professional Services Review, the Safety Net was used in effect to subsidise cosmetic procedures such as surgery for “designer vaginas” at $5000–$6000 each. I knew that the DoHA was aware of such misuses of the Safety Net. However, there seem to be no politicians with the appetite to face the problem and rein in millions of dollars in potentially inappropriate payments. Another major concern of mine has been the quantity of prescription drugs, particularly narcotics and benzodiazepines, finding their way onto the street. These drugs are well controlled by the manufacturer and the supply chain to the pharmacy. The weak link is the doctor’s prescription pad. Throughout my term as Director of Professional Services Review, I saw extreme examples of drug prescriptions that were clearly being misused or dispensed for resale by patients. In one instance, a doctor was prescribing 100 ampoules of 30 mg of morphine every week to a young patient without an appropriate indication. The state pharmaceutical branches are underresourced to track the prescription of benzodiazepines. Medicare is unable to identify abnormal prescribing patterns because many benzodiazepines are supplied on a private prescription. It is cheaper for a patient on a federal government benefit to pay for one private prescription for 200 diazepam tablets (less than $20) than to pay for four subsidised prescriptions of 50 tablets. I found many instances where a practitioner had supplied a PBS prescription for 50 tablets and a private prescription for 200 tablets.5 It is not only the MBS and the PBS where maladministration occurs. On several occasions I came across significant cost-shifting between the states and the federal government. Medicare was being used to subsidise state health budgets. Private radiology and pathology services were used for public inpatients, Medicare benefits were used to fund staff specialist study tours and to buy essential equipment. This is against the provisions in the Council of Australian Governments National Health Care Agreement. When this was pointed out to officers in the DoHA, I was told not to say anything. There is significant wastage within the Medicare scheme, which is threatening our ability to maintain first world standards in health care delivery. Australians are fortunate that, in the main, we do have a motivated and ethical health workforce. However, many of our colleagues feel let down by a system that so often does not deliver a timely or cost-effective service with proper controls. Many doctors I have spoken to are disillusioned by the inappropriate claiming and practice they are aware of. They feel disempowered to be able to effect change in our current health system.6 It is time for a thorough review of the manner in which health care is delivered in Australia. Piecemeal policy changes and bandaids are no longer adequate. To be of any value, a major review needs bipartisan political support. However, so long as health policy is used to bludgeon the other side of politics, we will never have meaningful change.

Tony D Webber MB BS, FRACGP

Lack of transparency and reliance on statistics alone make doctors vulnerable The Professional Services Review (PSR) was established to investigate and manage situations where the Medicare system was being used inappropriately by doctors. Undoubtedly, the PSR’s activities have identified and addressed instances of doctors knowingly exploiting Medicare. However, over the past 5 years, an initial general disquiet about the increased effect of the PSR’s investigative system and processes on general practice grew into widespread concern among broad sections of the medical profession and others. The PSR committees were disbanded because they were not ratified by the Australian Medical Association (AMA), 39 cases under review were dropped, and a senate inquiry into the entire running of the PSR scheme was conducted. The inquiry resulted in the publication of seven recommendations for improvements in the system,1 with a review with all relevant stakeholders planned for 12 months later. A common recurrent complaint was Medicare’s focus on statistics, with less emphasis on other information provided. Medicare targeted the right-hand end of the bell curve, assuming this was where inappropriate practice occurred. The “vanilla GP” who held four standard consultations an hour was the Medicare epitome of a gold standard practitioner and was safe from audit. However, the further GPs steered away from this “standard” practice, the more they were at risk of being investigated by the PSR. There is no substantial evidence that statistical outliers represent a high-risk group, and yet the PSR has intensified its auditing activities among such doctors, increasing auditing from 1% to 4%.2 Surveys of the medical profession have revealed deep concerns with the system and processes of the PSR. The AMA posed the question: “Do you think the Medicare audit process has become too heavy handed?”, to which 88% of respondents (307) voted yes.3 The Medical Observer ran a survey that attracted over 200 replies. It showed that over 80% of respondents felt that Medicare and the PSR had not replied adequately to queries on the Medicare Benefits Schedule and less than 15% felt confident they would pass an audit on the Enhanced Primary Care item numbers.4 The specific concerns held by us and others are numerous. In our view, the operational processes of the PSR and the Medicare audit system appear to be non-transparent, with too much power in the hands of the PSR Director. There is a denial of natural justice, with a high conviction rate and pressure to accept “negotiated agreements”, with no practical appeal process. Fines imposed are large, running to between five and six figures. Preserving patient confidentiality during an audit seems to disadvantage the case of the doctor being audited. The PSR does not appear to respond to concerns raised in these areas, and this undermines community confidence in primary care. A particular problem is that Medicare and the PSR give little or no guidance to GPs on the approved use of item numbers in the Medicare schedule. They have tried to refer complex requests back to the AMA and Royal Australian College of General Practitioners,5 and will not give binding interpretations on the use of Medicare items. Their past rulings do not provide useful guidance. This puts GPs in an extremely vulnerable situation, being unable to reliably check their interpretation of Medicare item numbers, yet able to be severely punished for actions judged to be misdemeanours at a later date. Some of the submissions to the Senate inquiry6 show the heavy-handedness of the PSR, particularly in relation to procedures performed by GPs. Examples include a rural GP being required to pay back a substantial sum because he had not personally documented the wound dressings and vaccinations performed (a nurse had done the documentation), and the rejection of independent assessment that disagreed with the PSR when investigating a rural GP for computed tomography scan orders. The PSR investigated 200 records associated with a procedural rural GP who had been in practice for 26 years because of “statistical anomaly” in the number of pre-anaesthetic checks ordered, even though the local hospital generated all these requests. On this basis, the GP was found guilty of incomplete record keeping and misinterpretations of item numbers 723 and 2713. He decided to accept the settlement after trying to sort through the issue over 2 years, although he did not feel at any stage that he had done anything wrong. Despite his previously clear record and full cooperation, he was subsequently fined a substantial five-figure sum and his patients were banned from claiming item 36 from Medicare. The particular case of Dr Tisdall,7 whose disqualification from Medicare was publicised by the PSR, and who fought for 10 years to clear his name, only to die soon after the federal court granted him the right to have his case reviewed by a new committee, is well known in the medical community and in Kyabram where he worked. The Full Federal Court was highly critical of the way the PSR went about making its findings. They described it as making a “speculative assumption” and decisions “simply based upon inferences drawn from statistics”,7 echoing criticisms from medical groups. The PSR is not only the concern of the various medical organisations that have queried its operation. The Australian community are the losers when government bodies fail. This inquiry has given us all the opportunity to improve a system for the benefit of patients, the government and doctors alike. The PSR needs to work hard with all medical and community groups to regain trust and respect.

C Scott Masters FRACGP, FAFMM, DipMusMed · Malcolm I Watt

Three features are essential in designing the flexible funding payments and pay-for-performance elements Performance pay for doctors has been introduced in many countries, including the United Kingdom through the Quality and Outcomes Framework (QOF) and the United States through the patient-centred medical home model.1 The effectiveness of these models remains in question, although there is emerging evidence that these schemes can reduce hospital admissions.2-4 In Australia, the Coordinated Care for Diabetes Pilot (CCDP) begins in 2012.5 The key elements of the pilot (Box) are voluntary patient enrolment, a flexible payment for each diabetes patient to cover allied health services (among other things) and a pay-for-performance element. General practitioners will continue to be able to charge fee-for-service payments and claim diabetes-related payments from the Practice Incentives Program (PIP), but will no longer be able to claim the Chronic Disease Management Medicare Benefits Schedule (MBS) items for GP management plans or team care arrangements.5 Doubts about the effectiveness of financial incentives are raised, not only by poor design of evaluations, but also by poor design of funding models. Careful design, based on theory and empirical evidence, is essential in designing interventions to change professional behaviour.6,7 This helps to ensure that the intervention is likely to be effective, and that unintended and undesirable consequences of incentives are minimised. Our aim in this article is to propose three essential features of the flexible payment-per-patient and the pay-for-performance elements of the new CCDP.8,9 Rewarding improvements in quality of careAn objective of the CCDP is that incentive payments will be paid for: . . . the delivery of patient-centred care in accordance with best practice management guidelines for diabetes, and for achieving improvements in patients’ health against specific indicators.5 Payment should be made for improvements in the quality of care, which requires measuring changes in quality over time. Previous schemes have made payments for the achievement of a level of quality, often based on a relatively high threshold, rather than for an improvement in quality. Using thresholds may not lead to changes in behaviour because: (i) doctors in practices with already high levels of quality of care can claim the highest threshold payment without changing their behaviour; (ii) there are no incentives to go beyond the threshold, and (iii) doctors in practices with low levels of quality of care have little incentive to reach a high threshold, as they perceive the costs to be greater than the financial reward.10 One option is to reward improvements in quality between two time points, and set successive thresholds close together, say at 5% intervals.8 This would encourage those with low baseline levels of quality to improve the quality of their care. Furthermore, economic theory would predict that behaviour is only likely to change if the level of the payment is at least equal to the costs of improving the quality of care. These costs will vary across practices depending on their baseline level of quality and the complexity of the health problems of their patients.3 Allowing payments to vary in line with these cost variations would lead to a potentially more effective intervention. The costs of improving quality of care from 10% to 15% are likely to be lower than those of improving from 90% to 95%. Practices that already attain high standards of care find it difficult and costly to improve further and would not be able to claim an improvement payment. Thus, an element of performance pay should recognise the high performance levels already achieved. The “improvement” payment should be higher than the “achievement” payment, or there would be little incentive for practices to improve their quality of care. Avoiding “cream-skimming” and sharing financial riskA fixed payment per patient gives GPs an incentive to minimise costs, as any surplus from the budget can be kept as personal income or reinvested in patient care, and any deficits are borne by the provider.11 This is good for governments, who want to control costs and ensure costs are predictable, because it shifts the financial risk to GPs. However, if this risk is perceived to be too high, GPs may choose not to participate in the scheme or to enrol only “healthy” patients, so a careful balance needs to be struck between risk-sharing and the strength of incentives. The incentives to minimise costs and “cream-skim” are already ameliorated to some extent in the proposed CCDP. GPs can still claim standard MBS items and PIP payments for their patients with diabetes. Total revenue per patient will vary according to the number of visits made per year, and the length of each visit, which partly reflects complexity. However, this may not cover intensity in terms of the use of other resources in the practice, such as practice nurses or the costs of employing allied health professionals. One option is to “risk-adjust” fixed and performance payments, so that higher payments are made to practices with patients with higher needs or more complex health problems than the average. There is much international literature on this subject, including on the use of risk adjustment in the design of the patient-centred medical home pilots in the US.12 Risk adjustment requires data on the primary care costs of diabetes care for all patients and how this varies according to patients’ characteristics. Unfortunately, there are no routinely available data, and very little information on the use of allied health services by patients with diabetes and the associated costs.13,14 Primary care and hospital data would need to be linked to obtain adequate measures of patients’ severity of illness and diabetes complications.14 It is doubtful whether adequate risk adjustment can be developed and implemented in time for the pilot. However, given continued access to MBS and PIP payments, the additional level of risk for practices under the new scheme may not be high, although this will vary across practices. Avoiding exception reportingA further way that cream-skimming can take place for enrolled patients is exception reporting.15,16 Paying for the proportion of patients who achieve a certain target means that payments are based on a ratio, with the numerator equal to the number of patients reaching the target and the denominator equal to the number of patients in the population. Exception reporting occurs when practices exclude patients from the denominator, thus increasing measured performance and earning income, while not improving quality. For example, in the first year of the UK Quality and Outcomes Framework, a median of 5.4% (range, 0–40%) of practices used exception reporting for patients with diabetes. This translated into median gains of between £1700 and £15 000 per practice.15 One way to avoid exception reporting is to make payments based on the numerator only — that is, on the number of patients whose quality of care improves from one period to the next. This would involve a payment for each patient achieving a desired change in performance. Payments can only be increased from one time period to the next if the number of patients achieving a target, or whose quality of care improves, increases. ConclusionThe design of the new payment system in the CCDP should attempt to maximise the impact of the incentives on quality of care while also ensuring an “appropriate” sharing of financial risk with providers, in addition to minimising any unintended consequences, such as exception reporting and cream-skimming. This will partly depend on the validity and reliability of quality indicators, but experience from the Australian Primary Care Collaboratives Program suggests that such data can be extracted from practices. The balance of additional revenue between the flexible payments and performance-pay elements is also crucial, and can influence behaviour as well as costs. Careful design of incentive schemes is essential for their success. Current and new mix of payments for patients with diabetes under the Coordinated Care for Diabetes Pilot (CCDP) Payments Current mix New mix of payments in the CCDP*† 1. Fees for professional attendances For each visit, general practitioners can charge patients what the market will bear, and patients claim (often via their GP) a fixed rebate determined by the MBS. No change‡ 2. Practice Incentives Program Practices can claim payments for patients with diabetes within the PIP (the diabetes sign-on payment, the diabetes service incentive payment for completing a three-visit cycle of care, and the outcomes payment for each diabetes patient if the practice has completed cycles of care for at least 20% of their patients with diabetes). Practices in rural areas (RRMA 3–7) receive a loading on all PIP payments (including diabetes payments) of between 15% and 50%. No change 3. Fees for GP management plans and team care arrangements GPs can claim under MBS items 721 (development of a GPMP), 723 (development of TCA) or 732 (review of a GPMP or TCA). These are fees for each visit (so standard professional attendance fees cannot be claimed), with one GPMP or TCA claim allowed in 12 months (with some exceptions) and one review claim once every 3 months. Patients being managed under the chronic disease management items may be eligible for: allied health services (MBS items 10950–10970); and/or allied health group services (MBS items 81100–81125); and/or dental services (MBS items 85011–87777). There are restrictions on claiming both SIPs and GPMP/TCA/review payments. Practices can no longer claim these fees 4. Flexible funding None A single payment per enrolled patient per year 5. Pay for performance See PIP diabetes outcome payment for completion of cycles of care above. Payments related to improvements in quality of care — to be designed GPMP = GP management plan. MBS = Medicare Benefits Schedule. PIP = Practice Incentives Program. RRMA = Rural, Remote and Metropolitan Areas classification. SIPs = service incentive payments. TCA = team care arrangements. * There are other indirect funding sources for the care of patients with diabetes, including funding for practice nurses, which changed in late 2011 from practice nurse MBS items and payments under the PIP scheme, to fixed subsidies for practice nurse and allied health salaries under the Practice Nurse Incentive Program (http://www.medicareaustralia.gov.au/provider/incentives/pnip.jsp). † The levels of payments are to be determined as part of the implementation of the CCDP. ‡ To the extent that the scheme leads to more visits by patients with diabetes, this will also increase costs to the MBS.

Anthony Scott BA(Hons), MSc, PhD · Mark F Harris MB BS, FRACGP, MD

Australia’s Medicare Locals are in a formative period, and any comparison so far has focused on the United Kingdom The Australian and Canadian health systems share many similarities; one author has described them as “children of a common mother”.1 The fundamentals of the provision of primary care in both countries are the same: the overwhelming majority of “general practitioners” in Australia and “family physicians” in Canada work in independent practices, billing “Medicare” on a fee-for-service basis. The structure of family practice is similar, with a mix of solo and multiphysician practices. In Alberta, patients are not required to register with a single practice, but many family practices are not accepting new patients, and so registration with a practice is universally seen as desirable. There is no financial penalty (on the patient or the practice) for patients seeing a physician outside the practice in which they are registered. There are some differences; most notably that health care in Canada is essentially a provincial responsibility operating within overall parameters set by the Canada Health Act, and that “extra-billing” (billing above the schedule fee) is prohibited. The health systems in both countries face similar challenges in meeting the needs of primary health care: improving access, especially in rural and remote areas; better managing chronic disease; developing more effective links between primary care and hospital practice; and working out how to foster multidisciplinary teams. Alberta’s answer to these challenges has been to develop Primary Care Networks (PCNs), which may provide useful lessons for the establishment of Medicare Locals in Australia. Alberta is one of Canada’s western prairie provinces, with a population of 3.7 million, covering a geographic area about three-quarters the size of New South Wales. In 2009, Alberta had 113 family physicians per 100 000 population (4187 family physicians).2 The first PCN was established as part of the funding agreement between the province and the Alberta Medical Association in 2005. There are currently 39 PCNs in Alberta, and about 75% of family physicians work in practices that are members of PCNs.3 How PCNs functionPCNs are organisations of practices — the PCN itself does not enrol patients and does not run the practices. PCNs are eligible for a capitation payment of $50 per patient (for the purposes of this comparison, the Australian dollar can be assumed to be on a par with the Canadian dollar). PCNs are required to submit a “business plan” to Alberta Health Services (the provincial provider organisation responsible for the flow of funds to the PCNs) about how the capitation funding would be spent. Considerable flexibility is permitted in the structure and content of business plans, which allows for local variation in priority setting. PCNs range in size in terms of both the number of physicians linked to them and the number of patients served. PCNs in rural areas are smaller on both dimensions. PCN governance reflects both physician autonomy and the need for accountability to the funders (Alberta Health Services, and the relevant government department, Alberta Health and Wellness), reflected in two decision-making fora: a physicians’ board (known colloquially as the “Little Board”) and a PCN board (“Big Board”) with representatives of the funding organisations. The Big Board thus provides a direct link between the PCN and senior local Alberta Health Services leaders who are responsible for wider health issues. The PCN budget is derived from the capitation payments used to cover administrative costs of the initiative, which include employing an executive director responsible to the Little Board, employing allied health or mental health staff (often based in individual practices), and providing other support functions (eg, supplying comparative data). Evaluation of PCNsStakeholders see collaboration as the principal benefit of PCNs, and the provision of improved access to allied health care as one of their greatest strengths. “Collaboration” is used broadly here, to refer not simply to relationships between physicians and allied health professionals but also to relationships between physicians and the rest of the health system. In recent interviews with family physicians involved in PCNs in Alberta, conducted by one of us (A S, as part of a medical student placement), one physician stated that, “The PCN initiative has saved primary health care in Alberta”. Another, who holds positions on both the Little and Big Boards of a larger PCN, stated: Of the most important things which the PCN has achieved for our province, the first would be the re-involvement of family physicians with the health system, since, before this, they had been somewhat isolated; and the second [would be] better use of the full extent of capabilities and intelligences on offer from allied health professionals. There are disadvantages of the current PCN arrangements, including a lack of clarity with regard to general PCN direction, which stems from the autonomy in setting priorities granted to PCNs to allow maximum flexibility in responding to local needs. What can PCNs offer Medicare Locals?Strengthening primary care has been a catchcry of health reform efforts around the world for decades. The most recent Australian example is the report of the National Health and Hospitals Reform Commission.3 However, primary care is complex and reform is hard to achieve. One strategy has been to attempt to strengthen primary care by developing a stronger organisational base for it — initially, in Australia, through Divisions of General Practice,4,5 and more recently, through Medicare Locals.6 Divisions have been successful on a number of dimensions,7 although the administrative arrangements at both national8 and local levels9 have not been perfect. Arrangements for Medicare Locals are still evolving, and their evolution could benefit from taking note of similar strategies in other countries. Alberta’s PCNs have something to offer here as they have proven themselves to be a vital part of continued access to primary health care in the province. Although the Canadian and Australian health care systems are similar, they are not identical. Some aspects that may be portable are: Capitation funding — means that PCNs know how much they can expect and can plan accordingly. Depending on their size, PCNs receive up to $15 million per annum to be distributed in line with business plans. A dual board system — provides a compromise between physician autonomy in management of the PCN while allowing delegation of some decisions to the physician group. It has some parallels to the German approach of management and supervisory boards.10 An evolutionary approach — incorporating a slow phase-in means the system is not being imposed on any physician or practice and allows skeptics to evaluate the benefits of local cooperation. The first PCN was established more than 5 years ago, but some practices have not yet linked up to a PCN, despite the financial incentives. Alberta appears to have invented a wheel for primary care that is supported by family physicians. Australia could learn from this example without needing to totally reinvent it.

Andrew Suchowersky BMedSci(Hons) · Oksana Suchowersky MD, FRCPC, FCCMG · Stephen J Duckett PhD, DSc, FASSA

Major reform plus targeted strategies have the potential to provide relief Underpinning recent global health initiatives, including the Millennium Development Goals and the United Nations’ High-level Meeting of the General Assembly on the Prevention and Control of Non-communicable Diseases, has been recognition of the links between illness, disability, poverty and economic development. In Australia, the economic effects of illness, particularly long-term illness and disability, are often overlooked or examined exclusively in terms of the consequences for government budgets and the economy. While such analyses may be effective in alerting policymakers to the scale of particular epidemics, they provide little indication of the direct impact of illness on the wellbeing of those in the community. To do this, the unit of analysis needs to be shifted from the macro economy to individuals and households. The existence of universal publicly funded health care and social security arrangements has possibly encouraged complacency among researchers and policymakers about tackling this issue. However, there is emerging evidence in Australia that chronic illness and disability are associated with serious levels of economic hardship and that such hardship affects health behaviour1-3 — thereby completing a cycle in which poor health leads to poverty, which then leads to poor health. The economic consequences in question include not only the out-of-pocket costs of medical treatment, but also the costs of self-management (eg, home modifications, transport and paid care) and loss of income for patients and carers.1,3,4 As a result, those of low socioeconomic status are at greater risk of experiencing illness and disability and are more vulnerable to the consequences. Out-of-pocket costsThe most direct manner in which the economic impact of illness is felt is through the out-of-pocket costs of care. In Australia, despite a free public hospital system and universal social health insurance coverage through Medicare, levels of out-of-pocket payments are high by international, high-income country standards. In a recent Commonwealth Fund survey of 11 high-income countries, the incidence of out-of-pocket spending exceeding US$1000 in the previous year among individual respondents was 21% in Australia — behind only the United States (35%) and Switzerland (25%), and well above countries such as the United Kingdom (1%), France (4%) and New Zealand (7%).5 In 2009, out-of-pocket spending as a proportion of total health expenditure was 18.2% in Australia — above the Organisation for Economic Cooperation and Development (OECD) median of 15.8% (Box 1).6 This proportion has remained steady in Australia, not varying much from the 1999 value of 19.9%, and seems unlikely to change given one of the recommendations of the National Health and Hospitals Reform Commission: “We want to see the overall balance of spending through taxation, private health insurance, and out-of-pocket contribution maintained over the next decade.”7 It is hard to see any compelling fiscal justification for such a policy when a comparison across OECD countries indicates that public spending on health in Australia in 2009 (5.8% of gross domestic product) was well below the OECD median (6.9%).6 What are the implications of these costs?The picture emerging from recent studies in Australia is that major burdens are being imposed on particular patient populations by high out-of-pocket costs.1-4 For example, in a study of patients with chronic obstructive pulmonary disease (COPD), 46% of patients experienced an incidence of catastrophic health care spending — defined as out-of-pocket costs exceeding 10% of income for the period studied.1 The main out-of-pocket costs incurred by these patients are shown in Box 2. In general, evidence suggests that the high burden of out-of-pocket costs tends to be skewed toward those with comorbidity1 and those with more severe illness.8,9 However, the hardship related to such burden tends to be most pronounced in people who have retired1 and those of low socioeconomic status,1 and there is little evidence of concession or insurance status providing significant protection.1,10 In addition, substantial costs incurred by patients are often not for health care but for home modifications, social support and transport.1,3,4,10 Significantly, increasing levels of out-of-pocket costs associated with copayments for PBS-listed medications have been found to be associated with reduced rates of prescriptions being filled.2 Such findings are supported by evidence from a qualitative study of patients with chronic illness in western Sydney and the Australian Capital Territory; lack of affordability of medical treatment, and thus impaired ability to self-manage, was a major aspect of economic hardship for these patients.3 Putting these findings into context, over the past 10 years the out-of-pocket burden associated with both MBS-listed medical services and PBS-listed medications has increased substantially (by 4.2% and 6.7% per year respectively).6 The concern is that these rising levels of copayment will adversely affect compliance, particularly in patients who require long-term treatment. Indirect costsIllness and disability also affect household economic circumstances through their effect on employment. In 2006, 33% of 18–64-year-olds who reported specific limitations or restrictions lived in households in the lowest income quintile, compared with 10% of those without such impairment.11 This pattern is further pronounced in individuals with intellectual disability and severe or profound disability, with 40% and 36% of people in these groups, respectively, living in the lowest income quintile households.11 This impact extends to informal carers, who often leave paid employment to care for a sick family member. While there are income support programs in place to assist those with long-term illness and their carers, often these barely cover living and medical expenses.3 Nevertheless, the prospect of losing income support payments and concessional status as a result of resuming employment can create a welfare trap for patients and carers, particularly those in low-income occupational groups. Financial stress and illness-related povertyIn Australia in 2009, 28 665 individuals became bankrupt, of whom 11% cited ill health or absence of health insurance as the primary reason.12 While illness-induced bankruptcy is not as large a problem in Australia as it is elsewhere (such as the US, where it caused 62% of bankruptcies in 200713), significant numbers of Australians are catastrophically affected by illness. In addition, disability has been found to be associated with more acute measures of economic hardship, such as financial stress based on an individual’s ability to raise a sum of money for something important. The Australian Institute of Health and Welfare (AIHW) has found that individuals with specific limitations or restrictions, when compared with those without impairment, report over double the rate of being unable to raise $2000 (26% v 11%).11 Another criterion for assessing financial stress is the inability to make necessary household payments. According to the AIHW, 34% of 18–64-year-olds with specific limitations or restrictions reported at least one such incident in the previous 12 months, compared with 18% of those without impairment.11 One study which adopted this broader perspective of examining the economic impact of illness and disability on households found that, in patients with COPD in western Sydney, 78% reported at least one instance of being unable to make necessary payments in the previous 12 months or, to do so, needed help, sold assets, moved house or borrowed money.1 Similarly, in individuals participating in the Household, Income and Labour Dynamics in Australia (HILDA) Survey, a population-based longitudinal survey, such incidences of financial stress were found to be strongly associated with disability, poor physical function and poor mental health.14 What can be done?The studies conducted in Australia indicate that health-related economic hardship tends to disproportionately affect specific patient populations, largely due to costs that are conventionally treated as being unrelated to the health sector. In the absence of comprehensive evidence, it is only possible to gather findings from a patchwork of unrelated studies. Priority should therefore be given to developing a consistent approach that records the specific costs to individuals and their households associated with illness and identifies the impact of these costs on health behaviour and wellbeing. The available evidence indicates that the out-of-pocket costs of treatment and self-management and loss of income from chronic illness and disability are associated with economic hardship, catastrophic health care spending and non-compliance with medical treatment. Major reform, such as the recently proposed National Disability Insurance Scheme (NDIS), has the potential to address hardship associated with illness and injury. However, meaningful improvement is also possible through small-scale targeted strategies. As household economic burden is skewed toward specific patient groups, effective remedies could include focused interventions such as income support and subsidies. These measures would identify and catch those individuals and households that currently fall through the cracks. They would also be unlikely to involve changes that distort current health care priorities or restructure the responsibilities of different government sectors. Furthermore, they could be implemented quickly. Ultimately, both broad-brush policies such as the NDIS and targeted support measures are needed to provide direct relief to individuals and households most at risk of illness- and disability-related economic hardship. 1 Out-of-pocket costs as a share of total health expenditure in OECD countries, 2009* OECD = Organisation for Economic Cooperation and Development. * Reproduced with permission from the Australian Institute of Health and Welfare.6 2 Main out-of-pocket costs associated with managing chronic obstructive pulmonary disease1 Home oxygen and medications Transport Medical consultations and tests Home care Medical equipment

Stephen Jan BEc, MEc, PhD · Beverley M Essue MPH · Stephen R Leeder BSc(Med), MD, PhD

To the Editor: We noted with interest the recent publication by Bismark and colleagues1 about complaint-prone doctors in Victoria. This research makes a valuable contribution to the important task of identifying practitioners who are at high risk of delivering poor quality health care. Similar analysis of more than 32 000 complaints received in Queensland from 1992 to 2010 has been undertaken by the Health Quality and Complaints Commission (HQCC). A summary of this work, which was performed in collaboration with the Medical Board of Queensland, was presented recently.2 Between July 2006 and June 2010, only 5% of medical practitioners registered as practising in Queensland were the subject of a complaint in a given year. Medical practitioners with multiple complaints (four or more complaints over the period; 0.7% of all medical practitioners) have substantially more complaints (> 2 SD) than their peers (average number of complaints, 1.6). An analysis of a subgroup of 117 doctors who were each the subject of multiple complaints revealed that they were more likely to be men, to have specialist rather than general registration, and to have an Australian rather than a non-Australian first qualification. Surgeons made up over 40% of this subgroup and were more likely to be the subject of a complaint than were other specialists. Further work is underway to clarify the level of complaints relative to the number of registered practitioners within each specialty. Although there are differences in the samples and analytical methods used in the HQCC study compared with those used by Bismark et al, there are striking similarities in the central findings: a small proportion of doctors produce a disproportionate number of complaints, and past complaint history is predictive of future complaint risk. Health complaints commissions in Australian states are working closely with the Australian Health Practitioner Regulation Agency to explore remedial or preventive opportunities. This task needs to involve the health care industry and professional colleges, as these complaint-prone practitioners are often well known by their colleagues or employers but, equally often, not adequately managed. As there is evidence that unprofessional medical student behaviour predicts both unprofessional doctor behaviour and risk of disciplinary activity,3-4 medical schools should also be engaged in this task.

Matt Vance · Michael Ward · David McKenzie

Deadly healthcare. James Dunbar, Prasuna Reddy, Stephen May. Brisbane: Australian Academic Press, 2011 (194 pp, $34.95). ISBN 9781921513756. This is a compelling read. Dr Jayant Patel arrived at Queensland’s Bundaberg Hospital on April Fools’ Day 2003 and, in the words of former Federal Health Minister Michael Wooldridge, “walked into an environment tailor-made for disaster to occur”. In June 2010, he was sentenced to seven years’ imprisonment for manslaughter and grievous bodily harm involving four patients operated on in Bundaberg. An appeal was dismissed. The authors of this well documented account are eminently qualified to tell the tale — Professor Dunbar teaches clinical governance and risk management at Flinders University in Adelaide, Professor Reddy is a health and organisational psychologist at Flinders and Stephen May is a former psychologist and journalist. As they explain, Patel was far from being the only one at fault. The authors carefully examine the bureaucratic structures and attitudes in existence in Queensland Health, and the personal and professional failings of particular administrative staff at the Queensland Medical Board and the hospital that led to Patel — whose registration as a specialist surgeon was restricted in two US states — being appointed as director of surgery at Bundaberg. They find that the hospital was “fiscally driven”, and Patel’s ability to perform large numbers of operations benefited the budget and completely overrode concerns about patient outcomes. The gulf between management and clinicians is neatly encapsulated in the story of an administrator telling a senior Bundaberg clinician concerned about Patel’s activities: “You have to understand that this is a business.” To which the doctor replied: “That’s where the problem is, you see. I think it’s a hospital.” The efforts of this clinician and many other staff, patients and relatives to achieve justice are well described, as are the findings of the numerous formal inquiries and the details of Patel’s trial. Patel’s earlier life and medical training have been meticulously researched and the authors have attempted to give a balanced view, pointing out that many of the 1000 patients he operated on at Bundaberg benefited from his surgery. Had the proper checks and balances been in place, the negative outcomes might never have occurred. Has the Queensland public health system learnt from the Patel case? Sadly, the authors conclude that it has not — their final sentence warns that a case like Patel’s “could be happening right now in your own modern overburdened healthcare system”.

Caroline M de Costa