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.

The future of Medicare

Jeremy Sammut

28 July 2017 | Ideas@TheCentre

JS RR29 hospital medical doctor patient waiting 1All things remaining equal, the future of Medicare will look pretty much exactly as Medicare today.

The snapshot version is that Medicare will continue to support a 19th century craft style model of medicine, underwritten by a 20th century ‘command and control’ payment system.

This means Medicare will primarily continue to pay doctors for delivering a defined medical service, which takes the form of one-off episode of GP or other specialist and hospital care, on a fee-for-service basis.

The problem is that the traditional model of medical care supported by Medicare was more suited to the time when the bulk of the community’s health care needs consisted of short term treatment for acute illness.

It is far less suited to dealing with the number one health challenge of the 21st century — the effective management of the rising burden of chronic disease in an ageing Australia.

If my snapshot is accurate, the future of Medicare will mean less national wellness and less national prosperity.

Health expenditure will continue to escalate on the high-cost hospital treatment of increasing numbers of chronic patients.

The fundamental problem is that Medicare doesn’t make healthcare providers accountable for managing the healthcare of patients across the care spectrum in a cost effective manner.

But under a ‘pooled’ and ‘capitated’ funding model — which might combine existing federal and state health and hospital funding — the incentives would be different.

Healthcare providers would have the incentive to develop innovative models of non-hospital based primary care to manage chronic disease more effectively in the lowest cost setting, because they would be financially responsible for funding the care of patients across the full service spectrum.

Reducing costs and improving outcomes by preventing chronic patients from needing admission to hospital sounds good in theory. But the key question remaining is how it can be implemented to overcome the formidable political obstacles posed ‘Mediscare’ campaigns.

There is a political feasible way to initiate much needed reform of the Medicare service and payment systems — the Health Innovation Communities proposal as set out in Medi-Vation report the CIS published last November.

This is an edited version of a speech Dr Jeremy Sammut delivered at ‘The Future of Medicare’ session at The Melbourne Institute/The Australian Economic and Social Outlook Conference in Melbourne last week.

Whatever happened to incentive?

Robert Carling

28 July 2017 | Ideas@TheCentre

RC inequalityLabor leader Bill Shorten’s freshly invigorated inequality narrative has sparked a debate focused on whether inequality is increasing. The answer is the claim of rising inequality lies somewhere between a distortion of the facts and a complete falsehood — but that will not be the end of the matter.

Putting the myth of ‘rising inequality’ up in lights serves as a tool to make inequality a political issue by hooking into a strand of contemporary public sentiment — just as the claim that Medicare would be privatised cleverly made the future of Medicare an issue.

The political strategy works because ‘rising inequality’ is a catch-all for assorted grievances about housing affordability, stagnant real wages, job insecurity, sky-rocketing energy costs … and so on.

The public is rightly concerned about such issues, and public policy needs to address each of them one by one to the extent it can without creating new economic costs. What Labor seems to be preparing the ground for is something entirely different — a new wave of redistributive tax policies to take more from the few and sprinkle it across the many, with an electorally serviceable claim to economic disadvantage.

Tax increases in general — and more steeply graduated income taxes in particular — have strong disincentive effects that seem to have been forgotten about in this debate. Most of our politicians stopped talking about incentive long ago and now can’t see past ‘fairness’ and inequality. Economic inequality is not intrinsically bad and equality does not equate to fairness. Policies need to give more attention to incentive.

Australia’s tax, social security and welfare systems are already highly redistributive towards a more equal income distribution and very effective in saving people from absolute poverty. The issue is not how to redesign the system to make it even more redistributive, but how to attenuate the disincentive effects of highly progressive income tax and means-tested social benefits.

Our students and teachers deserve better

Jennifer Buckingham

28 July 2017 | Ideas@TheCentre

JB teacher schoolI had the privilege of travelling to England to speak with some of the world’s best researchers on how children learn to read, and to observe how high-performing schools use this research to get all children reading.

There is no longer any serious debate in England about the need for explicit phonics instruction in early reading instruction. In fact, it is mandatory for all English primary schools to teach synthetic phonics — a method of instruction that systematically shows children the connection between spoken and written language, and how to use the English alphabetic code to read and spell.

The quality of synthetic phonics instruction is still uneven. Not all teachers have sufficient depth of knowledge and expertise yet. Nonetheless, there is evidence via the Year 1 Phonics Screening Check (PSC) that instruction has improved. In the first year of the national PSC in 2012, 58% of Year 1 students achieved the expected standard. In 2016, 81% of students achieved the standard.

England’s progress in implementing effective early reading instruction was accelerated by the ‘Rose Review’ of early reading by Sir Jim Rose, published in 2006. It strongly endorsed the ‘Simple View of Reading’– a conceptual model which emphasises the importance of both decoding (word reading accuracy) and comprehension — and found that synthetic phonics was the most effective method of instruction, especially for children from disadvantaged backgrounds or with language difficulties.

The Simple View model is strongly supported by research from multiple disciplines. UK Schools Minister Nick Gibb was influenced by this research and has relentlessly pursued the adoption of effective reading instruction, firmly believing that reading is key to educational success and social mobility.

Australia had its own review of the teaching of reading — the National Inquiry into Teaching Literacy (NITL) — the report of which was published in 2005. Its findings were remarkably similar to the Rose Review.

Yet it has had very little impact on reading instruction in Australia. Instead of citing the recent scientific research of Professors Maggie Snowling, Kate Nation, Anne Castles, or Charles Hulme, our Australian literacy academics drag out the outdated, unsubstantiated socio-theoretical views of Ken Goodman and Stephen Krashen.

Australia has many outstanding teachers of reading, but they are too often swimming upstream against poor quality reading programs and policy. Australian teachers and students deserve better.