The future of Medicare

Bill Shorten’s promise that Labor will pour more money into public hospitals might have helped them win four by-elections on Saturday.

But it’s not good health policy; for the reasons set out in The Future of Medicare? Health Innovation in 21^st Century Australia — a new book that brings together the recent research of the CIS Health Innovations Program.

Higher spending on hospitals is not only financially unsustainable the long-run.  It also amounts to propping up an outdated and fragmented Medicare system that continues to fund the same old GP and hospital services in same old way — services that fail to keep chronic patients well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.

This will do nothing — literally — to ensure Medicare is ‘fit for purpose’ and can adequately meet the major health challenges of the 21^st century.

The book argues that, rather than obsess about the level of hospital funding, we need to start talking about how to modernise Medicare so 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.

To fix problems that waste vast sums on high-cost expensive hospital care, such as the 10% of all hospital admissions that are potentially avoidable each year, we o urgently need innovative approaches to health.

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

It remains, however, that political obstacles to health reform are formidable.

This is why The Future of Medicare calls for a comprehensive independent Productivity Commission review of the Australian health system to catalyse healthcare reform and innovation.

Such an inquiry could move the health debate forward applying the lessons of recent reforms in aged care and disability services.

In both these sectors, politicians have responded to the dissatisfaction of consumers, their families, and advocacy groups, and implemented important changes to old systems that were failing to meet the needs of older and disabled Australians.

A Productivity Commission inquiry into the future of Medicare would reveal the same latent dissatisfaction with Medicare of chronic disease sufferers and patient groups — and highlight the need for policymakers and the public to support modernising Medicare. See this page.