Ideas@TheCentre – The Centre for Independent Studies


Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Ahead of the game

Jeremy Sammut

22 April 2016 | Ideas@TheCentre

hospital medical surgeryIt is serendipitous when a piece of research is ahead of the game — as happened with the new report of the CIS Health Innovations Program.

On Monday, Shaun Gath, the former Chief Executive of the Private Health Administration argued that healthcare unaffordability was being driven by the increasing cost of specialist doctor’s fees. The problem is increasing ‘utilisation’ of services, meaning patients are receiving more hospital procedures and tests.

One cause is that the Australian health system relies on fee-for-service payments, which encourages more to be done for more patients because doctors are financially rewarded based on the volume of services delivered.

As use of services increases, so do costs such as private health insurance premiums. Health funds have limited ability to address the usage-and-cost spiral because they are subject to a strict insurance indemnity.

This is why Private Healthcare Australia supported Mr Gath’s calls for health funds to have a greater say in organising and purchasing the hospital care for their members to allow market forces to generate better value for money.

This is very much the argument of my report: MEDI-VALUE: Health Insurance and Service Innovation in Australia — Implications for the Future of Medicare.

We could better control health costs across both the public and private system by better managing ultilisation of hospital services, especially given Australia’s much higher rates of hospital use compared to other OECD nations.

To achieve this outcome, we could emulate the approach of innovative health funds in the United States that have moved away from fee-for-service payments.

As the report shows, when providers are instead given a ‘bundled’ payment to fund all the healthcare needs of patients, they have a financial incentive to change traditional patterns of care.

Where tried, this has delivered promising early and cost-effective results by directing patients away from high-cost hospitals towards alternative, lower-cost, community-based facilities for specialist procedures.

The report argues yielding similar cost benefits in Australia requires significant structural changes to the health system.

If Medicare were replaced with a publicly-funded, privately-operated health insurance ‘voucher’ scheme, health funds would be able to operate as active managers and purchasers of health services from competing providers, and use ‘bundled’ payments to drive service innovations and efficiencies.

Dr Jeremy Sammut is Director of the Health Innovations Program and a Senior Research Fellow at The Centre for Independent Studies. His research report, Medi-Value: Health Insurance and Service Innovation in Australia — Implications for the Future of Medicare, was released Wednesday, 20 April 2016.

Humbugging our way to damnation

Theodore Dalrymple

22 April 2016 | Ideas@TheCentre

dickensProminent billboard advertisements for a large and important Australasian bank perfectly illustrate and exemplify the besetting sin of contemporary intellectual and political life: humbug. The advertisements suggest that the bank is working for the creation of a more equal world, which cannot possibly be the case and is, in effect, a lie. At least, one hopes it is a lie, for that is the most charitable interpretation of the slogan.

It is obvious that the aim of a commercial bank cannot be a more equal world, if only because it has financial obligations to its shareholders that it does not have to the rest of humanity. The former have not invested to provide everyone in the world with paid dividends; and while they might hope that the bank’s activities are honest and contribute to the growth of the economy, this is not at all the same thing as equalising the world.

A world in which everyone were starving might be a more equal world, indeed a perfectly equal one. Equality of misery is equality all right, but is not therefore either a just or desirable goal that the bank might pride itself on having brought about. What the bank really meant — if it meant anything at all — was that it was working towards a richer, more prosperous world. But working for wealth does not have the same moral cachet as working for equality.

In short, the bank was indulging in humbug; unctuously proclaiming ideals that it cannot, will never and ought not to have.

But does such humbug matter? After all, no one really expects to derive either truth or information from advertisements. I think it does matter, however: for humbug is an insidious pollutant of the mind, which not only distorts but perverts. It clears the primrose path to earthly damnation.

Theodore Dalrymple is the Centre for Independent Studies 2016 Max Hartwell Scholar-in-Residence.

Teach for (some of) Australia

Jennifer Buckingham

22 April 2016 | Ideas@TheCentre

teacher teaching schoolOver the past few months, attention has been drawn to low entry standards for teacher education courses in Australian universities. NSW Education Minister Adrian Piccoli has been one of the strongest voices advocating for higher entry standards for teaching degrees. In NSW, new teachers can be registered only if they have achieved results of at least a Band 5 (there are 6 achievement bands) in at least three subjects — including English — in the Higher School Certificate, or an equivalent qualification.

Given Minister Piccoli’s evident understanding of the importance of encouraging highly capable people to become school teachers, it is curious that some of the brightest and talented new teachers in Australia are not allowed to teach in NSW schools.

The Teach for Australia (TFA) program has been recruiting high achieving people to teach in disadvantaged and hard to staff secondary schools since 2010. The average ATAR of TFA ‘associates’ is a very high 95. Only 6% of applicants enter the classroom. In contrast to the trend throughout the rest of the teacher education sector, 47% of TFA associates were qualified as science, technology, engineering or maths (STEM) teachers.

One of the criticisms of TFA’s approach is that TFA associates start teaching before they have completed post-graduate teacher education. Instead, they complete an intensive six-week course and then continue their studies while teaching part-time. Bear in mind that the associates already have at least an undergraduate degree in their subject area (almost half had advanced degrees in 2016) as well as professional work experience.

Unfortunately, like the rest of the teacher education sector, there is little objective data showing the educational impact of TFA associates on student performance. A report from TFA states that 90% of principals said that TFA associates had a greater impact on student achievement than other graduate teachers after two years of classroom teaching. Survey data is not ideal, but there is evidence from TFA’s sister programs — Teach for America and Teach First (UK) — that teachers recruited and trained by this method are at least as good if not better than traditionally-trained teachers.

TFA associates currently teach in Victoria, the ACT, Northern Territory and Western Australia. It is time for the other states to get on board. They have little to lose and everything to gain.