Speeches and Transcripts

Dr Hambleton, Speech to Ramsay Health Care Conference, 12 September 2012

SPEECH TO THE RAMSAY HEALTH CARE CONFERENCE, GOLD COAST

AMA PRESIDENT DR STEVE HAMBLETON

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***Check Against Delivery

Health Reform – The Current Landscape

I acknowledge the traditional owners and custodians of the land on which we meet today, and pay my respects to their leaders, past and present. 

I am really pleased to be here to talk to Ramsay Private Hospital Executive managers from all around Australia.  I would like to give you an overview of how the AMA sees the current health landscape.

It seems to me that in an environment where private hospitals treat 40 per cent of all patients in Australia, and admissions to private hospitals are growing at a faster rate than public hospitals, scant attention has been paid to private hospitals or, indeed, private specialist practice in the health reform agenda.

As we age, there are two areas of the body that most impact on our independence - and they are Vision and Mobility.  Surely the providers of a significant portion of the care for these services should figure highly in health reform – but do they?

In 2010-11, over 70 per cent of separations for diseases of the eye and adnexa were from private not public hospitals.

I certainly don’t have to tell this audience about your own statistics but, in the private sector, acute admissions are going up, rehabilitation service volumes are going up, psychiatric services are going up, and something like 67 per cent of all elective surgery occurs in private hospitals.  So where is the engagement in health reform?

From our perspective, the dream of the Kevin Rudd-led attempt at ‘big bang’ health reform that began in 2007 has not been realised.

Where has the dream gone, and what is left?  What should health reform deliver? 

Real health reform for doctors, patients, nurses, and allied health professionals should deliver more resources at the hospital bedsides, in the surgeries, and in community health services, and it should connect them all up and we should end the blame game.

But what did we get instead?

We have a COAG Agreement between the Commonwealth and the States for refinancing and restructuring, but the blame game is alive and well. 

This Agreement will continue to come under immense pressure as the new State Governments attempt to flex their muscles.

Let’s talk about some key issues:

  • Clinical Leadership;
  • Training;
  • New Government Agencies;
  • Private Health Insurance;
  • Safety Nets;
  • Health and Hospital Boards;
  • E-Health; and
  • Private Sector Training.

Clinical Leadership

The Federal Government’s promise to deliver clinical leadership to Local Hospital Networks has come under threat from the States already.  The AMA strongly supports clinical engagement, including the current watered-down proposal for a national clinical network of national and state forums.

Clinical engagement with doctors working at the front line of health care is the only way to ensure that management decisions are well informed.  I know this is a principle that the private sector embraces and it must be replicated in the public space.

The AMA is determined to ensure that the grassroots experiences of medical practice, and the real needs of patients, are not drowned out in the noise and spin of health reform.

Training

On another front, the Government has provided a significant increase in medical training numbers, including in general practice. 

Interestingly, soon after I graduated in a national class of about 1600 graduates per year, 800 training places for general practice were available – around 50 per cent.

Nearly 30 years later, we are graduating 3600 doctors and we are only now moving to 1200 GP training places – about 33 per cent.  Is it enough?

The increase in numbers, though, is a great investment in our future medical workforce.

We have known about the increase in student numbers for years so why is it that we still have no guarantee that all graduates will get internships next year. 

To be fair, Minister Plibersek has assured me that the Federal Government is determined to resolve this issue.

But even today the Australian Medical Students’ Association President has indicated there are still 235 students without funded intern positions for 2013.

We are calling on all of our governments show the same determination as the Federal Minister to ensure we have the right number of intern places so that these doctors of the future can start their postgraduate journey to finish their training.

Health reform – new organisations

Meanwhile, we have to come to grips with, and hopefully have some say, in the running and output of some new health organisations.

First we have the Australian National Health Prevention Agency dedicated to prevention.  We welcome this Agency.  It has important work to do.

The Agency’s establishment was a key recommendation of the National Health and Hospitals Reform Commission and the National Preventive Health Taskforce to strengthen Australia’s investment in preventive health and help turn the tide on the rising prevalence of preventable chronic diseases.

It is currently targeting obesity, harmful alcohol consumption and tobacco.  Figures released yesterday say we are not doing too well with obesity rates continuing to rise, and no respite from harmful alcohol consumption.  We are making progress, though, on tobacco consumption.

Australians are cutting down on the smokes, but we are finding it harder to knock back a burger or cut down on the grog, even if we are pregnant.

More work needs to be done to get people eating healthier and drinking more responsibly.  This new Agency cannot solve these problems alone.  It is up to the whole community working together to improve public health.

The Government has also established new organisations to:

  • monitor and report on health performance (National Health Performance Authority - NHPA),
  • manage and report on the activity-based pricing framework for hospitals (Independent Hospital Pricing Authority - IHPA), and
  • administer the funding pool (National Health Funding Body).

Individually, these new bodies and processes being rolled out under the National Health Reform Agreement have potential to make improvements in their specific areas.

While it is early days, there are some significant risks.

The AMA has highlighted key issues to the Government through comments and submissions on proposals such as the National Efficient Price, the IHPA Work Program 2012-13, and the NHPA Strategic Plan 2012-2015.

I read that the President of the APHA (Australian Private Hospitals Association) believes, at this stage, that the new Activity Based Funding regime for hospital pricing will lessen the incentive for public hospitals to treat private patients for revenue raising.

This is because Federal funding will be reduced to take account of any other funding received for the episode of care.  [Public hospitals received nearly $682 million in benefits from private health insurance funds in 2010-11 (an increase of 10.4% from 2009-10).]

The intention is that the change in funding should be incentive neutral, but we need to watch this space.  This, and a wide range of other possible impacts, may well eventuate from the new hospital pricing arrangements. 

What we can be certain of is that the new public hospital pricing arrangements will bring a much sharper focus on costs and cost accounting in the public system.  But it is yet to be seen exactly how the new arrangements will play out and what ‘new behaviours’ might develop as a result of their introduction. 

The AMA has argued strongly in submissions to both IHPA and NHPA for an active program of monitoring and evaluation to track these trends as they develop, and to make adjustments to address any adverse effects.

This includes potential adverse impacts on the number and mix of services provided from the introduction of the new pricing arrangements and, indeed, the impact of the actual collection of the data.

I have heard it said that they already collect much of the data – it’s sharing it that might be their problem.

IHPA’s work program also needs to address as priority issues the recognition of quality of care, and the adequate provision for teaching, training and research as part of the pricing framework.

The AMA has also raised these issues in its submission on the NHPA Strategic Plan.   The NHPA Plan should more explicitly focus on how NHPA will work with its stakeholders.  It should also implement a process to provide comparative information to 'source' health care organisations prior to public release, and minimise the cost of data collection and reporting.

Health reform – broader concerns 

While the individual reforms and new organisations are worthwhile in their specific areas, there are significant broader issues.

The AMA has argued that the reforms are overly focused on backroom issues, such as issues about how governments split funding responsibilities, how they measure performance in the abstract, and how they create new organisations but don’t invest in the system’s overall capacity for service delivery.

The reforms and new funding arrangements themselves fall short of being able to improve service delivery – clearly illustrated by the Federal Government’s decision to provide a $325 million emergency rescue package for Tasmania’s health system, targeted to direct health care delivery.

There is no clear picture of the overall performance of the system, and the impacts of the new bodies and processes are not fully predictable. 

These issues are clear in terms of the performance of our public hospitals system.

The Government’s published hospital statistics show no evidence of progress towards achievement of any of the national targets agreed by the Council of Australian Governments (COAG) as part of health reform.

In relation to our public hospitals, the 2007 dream of health reform remains just that – a dream.

Despite an almost 10 per cent increase in recurrent expenditure on public hospitals, there has been no real change in the key performance measures for public hospitals.  Bed numbers, waiting times in emergency departments and waiting times for elective surgery are basically unchanged and still a long way short of the COAG targets. 

With insufficient inpatient bed capacity, these two targets work against each other.  The broader public is beginning to understand this. 

In the quarter ended June 2012, a record 132,366 people took out private hospital insurance (PHI), the largest quarterly increase since 2007. 

While the full effect of the PHI changes may take longer to play out, this significant increase is a strong sign that many people see PHI as a value proposition.  It also suggests a corresponding lack of confidence in the public hospital system.

In relation to private hospitals, I am pleased to see that there are projects in development, underway, or recently completed to deliver new or enhanced private hospital infrastructure. 

As reported in Private Hospital August 2012, and as I said earlier, private hospitals are rising to the challenge as our population gets older and more reliant on health care.

Safety nets

The AMA supports the availability of well-designed safety net mechanisms that help keep medical care affordable.  Each and every proposed change to safety net provisions needs to be carefully considered from this perspective.

The Government has recently made changes to the Extended Medicare Safety Net scheme, payments under which were capped following a review that found there was a sharp drain on the health budget.

The scheme, which has been in place since 2004, provides an additional reimbursement to patients on top of the Medicare rebate and safety net, once their out-of-pocket expenditure exceeds an annual threshold.

But, in 2010, the Government capped payments made under the scheme for certain services including obstetrics, IVF, cataract and varicose vein procedures, hair transplantations and midwifery services.

Safety net caps have caused savings that far exceeded the Government’s projections and have effectively decreased access to some private specialist services.

The June 2011 report by the Centre for Health and Economic Research and Evaluation (CHERE) showed that the number of private obstetric confinements had already fallen by 4 per cent.

The AMA continues to support well-targeted and monitored safety net benefits.

It is worth noting, however, that two areas of health care where the safety net term is virtually never heard are Aged Care and Aboriginal health.

Health and Hospital Boards (LHNs)

The AMA strongly supports initiatives that enable effective clinician engagement in the health sector, at all levels.

We consider specific proposals around clinician engagement, such as the current Discussion Paper, Building a National Clinicians Network, from the perspective of the AMA’s broader views on clinician engagement.

These include the fact that doctors have the ultimate clinical responsibility for patient care and add essential expertise to the management of healthcare organisations, including public and private hospitals.

Doctors can contribute to better management of health costs while ensuring quality patient care and outcomes by being involved in decisions about resource allocation and the purchasing of services for the provision of patient care.

As we in this room know, the management of healthcare organisations, including hospitals, works best when doctors are engaged in clinical and corporate governance.  Decisions on resource allocation, service provision and patient care are often made too far from the point of actual patient care.

PCEHR and e-health

While e-health is a much bigger subject than the personally controlled electronic health record, over recent months the PCEHR has come to dominate the public discussion.

Clearly, the PCEHR is important but, without strong GP support, the PCEHR implementation will stall.  The Government has come to realise this and we have recently had some important concessions that will help with its rollout.

The Federal Government has listened and responded to AMA concerns.  It will allow GPs to bill for time spent preparing and maintaining shared electronic health records as part of Medicare Benefits Scheme consultations.

This is an important change that should help deliver some much-needed momentum to the PCEHR scheme.

Health Minister Tanya Plibersek has also delayed the introduction of requirements that general practices must have PCEHR capability to remain eligible for the Practice Incentive Program (PIP) e-health payment.

The new rules were originally to come into effect in February next year but doctors will now have until May 2013 to meet the PCEHR requirement.  This new cut-off date, while an improvement, remains a tight deadline for doctors to ensure their practices are PCEHR-ready.

Overall, these changes are a welcome and much-needed improvement in arrangements for the PCEHR, and should encourage GPs to become actively involved in the implementation of the scheme.

The AMA has also released the final version of its guide for doctors on how to use the personally controlled electronic health record (PCEHR).

The other major potential opportunity in the e-health space is the agreement that we will be using one classification system – SNOMED CT-AU – that will provide a standard clinical language to support effective health data exchange.

Suddenly, private hospitals, private specialists, public hospitals and GPs will all be expected to speak the same language.  This should produce real benefits for patients with increased efficiency in information transfer.

Private sector training

The AMA has been an advocate for the expansion of medical training into the private sector and community settings.

We know that public hospitals are stretched to capacity and many procedures that used to be commonplace in the public sector are now largely the domain of the private sector.  Private hospitals can provide a rich learning environment, complementing our public hospital system.

We also know that medical student numbers in Australia have increased significantly.  In 2016, there will be close to 4000 graduates from medical schools each year.

The public health system is clearly struggling to provide enough quality training positions for the growing number of graduates.  Addressing the forecast shortage of intern places for 2013 is a key area of work for all health ministers across the county.

Health Workforce Australia has predicted a bottleneck in specialist training - with a projected shortfall of around 450 training positions in 2016.

The Commonwealth has established the Specialist Training Program (STP), which currently funds 600 training posts in expanded clinical settings.  This will grow to 900 by 2014.

The AMA supports this program and we know that the number of applications for funding greatly exceeds the number of posts that the Government has set money aside for.

While the STP is a worthwhile program, it clearly does not harness the full potential of the private sector to provide high quality training experiences for our future doctors.

With so many medical students and medical graduates, we must look to the private sector to see what opportunities exist to support not only specialist training, but also pre-vocational training and clinical placements for medical students.

Relationship between private hospitals and general practice

We know that there is significant scope to improve patient care by strengthening the links between private hospitals and GPs.

In my discussions with private health insurers, it is clear that they all recognise this and, in order to decrease their fiscal risks, they are likely to try to influence this. 

Discharge summaries play a critical role in ensuring safe and effective continuity of care for patients being discharged from hospital and have been shown to decrease readmission rates.

Discharge summaries need to be more timely (ie sent to the patient's GP on the date of discharge to ensure effective continuity of care; be of a standardised format and be interoperable; and include accurate and relevant information regarding the patient's admission, treatment and post-discharge care requirements.

It does not take much imagination to think that things like discharge summaries are likely to become part of private hospital contracts in the future - so we all should be ready for that.

Conclusion

The nature and pace of health reform has changed significantly since the 2010 election.

Having a minority Government has made a huge and understandable difference.

The growing number of State and Territory Coalition Governments has made COAG a very different – and far less tame – beast.  COAG fights will become more frequent and more fierce.

Despite all the differences, all jurisdictions must realise that things cannot stay the same in health.

It won’t be long before there is another round of major health reform, hopefully meaningful health reform.

I think all of us in this room need to be prepared because the private sector is going to be a more significant player in future changes – both in the hospital sector and in the primary care space.

There are many changes underway and we have to manage and monitor how those changes play out.  And hopefully we can do that together.

 


12 September 2012

 

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