New CIS book: Labor's extra money for hospitals no fix for Medicare

Bill Shorten’s promise that Labor will pour more money into public hospitals than the Coalition might be smart politics — but it’s shockingly bad health policy, says the editor of a new book on Medicare being released tomorrow by The Centre for Independent Studies (CIS).

The Future of Medicare? Health Innovation in 21^st Century Australiawarns that we already waste vast sums on high-cost expensive hospital care because Medicare is not ‘fit for purpose’.

“Labor’s ‘Gonski-for-health’ campaign on hospital funding might have helped win four byelections on Saturday, but it does nothing to ensure Medicare can adequately meet the major health challenges of the 21^st century,” says Contributing Editor and CIS Senior Research Fellow, Dr Jeremy Sammut.

“Rather than obsess about the level of hospital funding, we need to start talking about how to modernise Medicare so that the system can deliver the new, more affordable, and improved kinds of healthcare needed to address the rising burden of chronic disease in an ageing and sicker Australia.”

“Promising higher hospital funding is not only financially unsustainable in the long-run,” he says.

“It also amounts to propping up an outdated and fragmented system that continues to fund the same old GP and hospital services in same old way — services that fail to keep chronic patients well and out of hospital.”

“We urgently need innovative approaches to health to fix problems such as the 10% of all hospital admissions that are potentially avoidable each year.”

“This includes solutions such as capitated funding to pay for ‘chronic care packages’ delivered outside of hospital, which can achieve the best and most cost-effective health outcome by ensuring chronic patients access all necessary care including community nursing and allied health services.”

Dr Sammut says a comprehensive independent Productivity Commission review of the Australian health system is needed to catalyse healthcare reform and innovation.

“Labor has already committed to a Productivity Commission inquiry into the spiralling cost and barriers to care in the private health sector.”

“This inquiry must be extended to including the entire health system, or else we will continue to pour tens-of-billions of dollars into the Medicare system that does not provide the right care in the right place at the right cost to Australians with complex, chronic health needs.”

Dr Jeremy Sammut is a Senior Research Fellow and Director of the Health Innovations Program at the CIS.