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PRESS RELEASE: Three health reform priorities for the next government

19 Jul 2013, by Informa Insights

Health Insurance SummitThe next government should use its first term to create an alternative to the Council on Australian Governments, create a single organisation to render hospital pricing and hospital safety more transparent to consumers, and deregulate private health insurance.

Dr Paul Gross, a former Commissioner of the National Hospitals and Health Services Commission, will tell the 12th annual Health Insurance Summit in Sydney on Monday that the Australian healthcare system is now vulnerable to organisation mayhem and an unwillingness to recognise the role of a private health system that grows because the public sees the public system weakened by political bunfights.

“For as long we leave COAG and its seven new advisory bodies in charge of public hospital reform, and while we avoid restructuring of private health insurance,

  • there will be no innovation outside the hospital walls;
  • rising out-of-pocket costs will continue to weaken the value of health insurance and patients will defer care and not take essential medicines;
  • nearly 12% of older Australians are estimated to spend over 10% of their income on health costs and 5% (250,000) are estimated to spend over 20%, seriously reducing their disposable income in retirement; and
  • with no innovation, higher costs, and reduced access to essential care, future household wealth and national productivity will decline.”

With no new ideas coming from the health insurers or state governments, politicians of all persuasions have been silent on the hard issues such as why we must

  • cut back on overuse and other waste in the health system,
  • harness the resources of the public and private systems,
  • retain nurses and make better use of all health professionals,
  • create more affordable health insurance covering all life stages,
  • and
  • help individuals and families to reduce risk factors that are driving 70% of the health bill.

Dr Gross has three modest suggestions for any political party wanting to use a health policy to engage the public and the health sector.

1. Tell us about affordable health and social care

An incoming government should take no more than 12 months to

  • assess specific proposals to make healthcare more affordable,
  • identify the roles of governments, the private health sector and the voluntary sector in the implementation of the proposals,
  • tell the public why patient-centred care will drive all future reforms, and why little steps can bring about affordable care quicker than big-bang reforms.

2. Reduce the dead hand of COAG: A National Health Council

Ignoring all exhortations for big-bang reform, the government should not attempt restructuring of the roles of different levels of government in healthcare in its first term.

Dr Gross wants an independent council to replace COAG and bring the public and private sectors together.

“On the day the new Health Minister is appointed, the government should announce an intent to replace COAG as the prime decision-maker by National Health Council drawn from both levels of government, the

private health sector, and the voluntary sector. The new council should report to the Parliament as does the German equivalent that has stood the test of time whereas COAG is irrelevant.”

3. Change health insurance in stages

Dr Gross will tell the summit that private health insurance is under threat because of costly and misplaced regulatory zeal, its dependence on tax rebates, and the absence of incentives to insurers to create less costly insurance or new types of insurance to cover rising copayments.

Dr Gross says: “To fix these gaps, I hope that wise heads discount arguments that as its first priority the Coalition should move Australia towards a Dutch health insurance model based on private sector competition, or that as a first step in deregulation the government should let health insurers set their own prices without referral to the Health Minister or some umpire.”

He says that the first argument is a political landmine, and the second is a third-order issue when the major issue is to define the new role for PHI that makes care more affordable.

He will focus on regulatory burdens on insurers that can be removed and he also wants a new tax rebate that gives incentives to patients and insurers to seek affordable care.

“ if the government wants to contain future budget expenditures on the aged and chronically ill, the Productivity Commission should be turned loose on a feasibility study of earmarked tax-subsidised health savings accounts within private superannuation accounts, with those HSAs used to pay for insurance against the risks of catastrophic costs in retirement as in Singapore, or for supplementary insurance that triggers cash benefits once a doctor indicates loss of independency as in Germany”.

For interviews with Dr Gross please contact him directly via email or mobile: 0414628243

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