Australia's National Health and Hospital Reform Plan

Australia's Health And Hospital Reform

FASHIONING a FUTURE HEALTHCARE SYSTEM

Australia's Recent National Health and Hospital Reform

The National Health Reform Plan

The goal of this Plan is to deliver landmark reforms on Australia's health and hospital system in order to build the foundations of the country's future health system (NHHN, 2010). These major structural reforms will bring certain changes about. They will make the Commonwealth Government the majority financier of public hospitals. It will assume funding and policy responsibility for general practice and primary health care services. It allocates a third of annual Goods and Services Taxes to state and territory governments. It changes the way hospitals are operated as it assumes control from central bureaucracies and turning it over to local hospital networks. It also changes the funding mode in hospitals by paying local hospital networks directly for services instead of by a block grant from the Commonwealth to the states (NHHN).

These reforms will endeavor to achieve the goals by improve public hospital and primary health care services (NHHN, 2010). They will draw from the strengths of the present health system, which already provides primary health care through Medicare, and free public hospital treatment for the public. They will also keep these foundations sustainable. Most of all, it will utilize the skills, experience and ingenuity of the citizens at the frontline of the health and hospital system. The Reform Plan will build on the achievements of Government's major health reforms, including record funding for public hospitals, increased volumes of elective surgery procedures, relieving emergency departments of pressures, and record investment in the training of more doctors and nurses (NHHN).

Reforms are a must in delivering high-quality health care (NHHN, 2010). The fragmented state of the present health care system has produced sore consequences. It has added to cost shifting among the different levels of government. It has incurred much waste. And it has resulted in long patient wait times. It furthermore faces looming challenges. The population is both growing and ageing. Unprecedented technological advancements are likely to raise health costs. And the burden of chronic disease is also likely to grow. The one consolation is that Australia's rates of hospital admission are higher than those of other countries. This implies better chances at keeping the community healthy (NHHN).

But these are hardly achievable without appropriate and major reforms (NHHN, 2010). The nation's finances must be reformed. In order to implement reforms, the government must continue performing the role of private hospitals and healthcare providers to insure acceptable health outcomes. This reform package evolved from the recommendations of the National Health and Hospitals Reform Commission as well as from the more than 100 dialogues between the government and health professionals and the community. This represents the position of the government presented to the states at the Council of Australian Governments (NHHN).

Factors Influencing the Reforms

The first is a system that is unprepared to confront future challenges (NHHN, 2010). These include an ageing population from 14% in 2010 to 23% in 2050; a growing population from 22 million at present to 36 million by 2050; increasing burden of chronic disease; increased and further increasing health costs from today's 15% of government spending to 26% by 2050; and workforce shortages, particularly in the regions and the rural areas. The second factor is too much blame and fragmentation between governments. Patients are, as a consequence, confused as to which level of government can be held accountable for their care. The third factor consists of gaps and poor coordination in needed health services. Primary health care is difficult to access in the rural areas and in the regions or out-of-hours general practice services. Access is also difficult for those in highly disadvantaged areas where health outcomes are poor. Too much pressure on public hospitals and health professionals is the fourth factor. The public hospital system reels under continuously increasing patient demand and drained budgets. Waiting time for surgery and emergency treatment has been longer for more than half a decade. This pressure and other strains are a daily experience to healthcare professionals. The fifth factor is an unsustainable funding model. State government revenue growth has not been able to cope with the continued increase in healthcare costs. Public hospital expenditures grew by 10% from 2003-2008. Health spending alone is projected to cost more than all the state and local government revenue. The sixth factor consists of too much inefficiency and waste. Some public hospitals may be operating less efficiently than best practice at up to 20%, according to the Productivity Commission. Despite improved funding through block grants, transparency remains relatively limited. This lack of transparency prohibits taxpayers and government from making comparisons among states on the matter of efficiency. Too centralized and bureaucratic administrative setups in some states account for part of the problem. These practices discourage efficiency among local clinicians and managers. And the seventh and last factor is inadequate local or clini8cal engagement. Many clinicians and citizens have no adequate involvement in decision-making in the delivery of health services. They fail to make full use of available expertise and commitment of the workforce. Moreover, their services are not suited to the needs of the community (NHHN).

A "Road Test" of the Reforms

A Simulation was held in June 2011 by the Australian Healthcare and Hospital Association or AHHA (2012) for a dry-run of the new healthcare environment and for comments. The participants recognized the prime importance of changed mind-sets for the success of the new ideas. The backing of governments through a common commitment to the entire change process was a common expressed need. Improving clinical services and consumer experience, a foremost goal of the reforms, will largely depend on the close coordination between the Medicare Locals and the Local Hospital Networks for the proposed delivery of integrated patient services. The participants also found the new Commonwealth-State financing arrangements as a main feature of the reforms. They likewise found the new "efficient price" for hospital services controversial. These two features should be refined or adjusted to provide incentives to patient care in the most appropriate settings. The participants, however, warned that efforts to achieve financial efficiency should not sacrifice quality and safety (AHHA).

One of the Reform Plan's major elements is to preview the role of existing and planned national data collection and performing reporting agencies (AHHA, 2012). These agencies should work together to uplift health services instead of hiking red tape and increasing reporting burden for health services. The consumer participants, for their part, found the Simulation useful. But they also confronted their lack of understanding about how to get involved in planning, design, monitoring and evaluation of health care as equal partners. These insights from the Simulation were meant to be a valuable contribution and reference for the effective implementation of Australia's health reform agenda, according to AHHA director Prue Power (AHHA).

Implications on the Medical Devices Industry

The Reform Plan may also trigger a series of swift market changes for this industry (MedicExchange, 2010). A Frost and Sullivan consultant projected that the U.S.$2.3-billion medical devices market would grow at an estimated 9% between 2009 and 2012. Approximately U.S.$98 billion was spent on healthcare goods and services in 2009 alone. . Government funding for healthcare steadily increased to respond to the need for better services especially to the ageing population and increasing rates of chronic disease. The consultant predicted that the Reform Plan would open many new growth opportunities for medical device companies. He foresaw the market achieving roughly U.S.$3 billion by this year. The Reform Plan will invest in primary and sub-acute care to reduce preventable hospital admissions, increase health awareness, improve healthcare infrastructure and improve access to emergency departments. About U.S.$530 million of the total budget has been reserved for the purchase of medical equipment, machines, the hiring of more physicians, adding more beds, providing more training and the like in order to reduce waiting time for elective surgery for four years. Other factors like increasing healthcare costs, the ageing population, high prevalence of chronic disease, rising need for personalized care and technological advances will fuel the growth the medical devices industry. Healthcare expenditures for those 65 years and older will be seven times today's level 40 years from now. The Commonwealth's health spending should rise to more than 200 Australian dollars by 2050 (MedicExchange).

Expansion in exports will also power the growth of the medical devices industry, which is extremely trade-oriented (MedicExchange, 2010). More than 90% of the country's domestic demands for medical devices is met by both imports and exports of 90% of products manufactured in Australia. Two such companies are Cochlear and ResMed with their niche products and innovativeness. The development of biotechnology and nanotechnology will lead to new materials and devices for medical and diagnostic use. The industry has high levels of research and development expenditure and tight collaboration with the health and medical systems, educational and health institutions. Increasing healthcare costs, landmark healthcare reforms since Medicare, billowing exports and technological advances will altogether accrue to the sustainable growth of the industry. At the same time, these will create opportunities for the creation of cardiovascular devices, surgical equipment and devices, point-of-care diagnostics, and homecare and non-hospital devices, the consultant added (MediExchange).

Advantages and Disadvantages

Publicly-funded healthcare delivery systems are universal healthcare systems (Mission, 2012). Opponents call them socialized medicine systems but proponents call them national healthcare service systems. Such a system provides health care for all citizens of a given political entity. A universal healthcare system, as the name implies, is supplied and operated by a government. But in some, the health care may be publicly funded but private firms extend most of the medical services. Otherwise, the healthcare system allows private providers to offer their resources so that the individual may have the choice between private and public care. But this does not exempt private customers from paying taxes and other costs for spending for public health care (Mission).

Funds in universal health care systems are accumulated differently (Mission, 2012). In the case of Australia, funding comes from general government revenues. Coverage also varies in countries. While Canada covers all hospital care expenses, Japan patients pay 10-30% of the costs; Belgium shoulders the majority of eye and dental costs, while Australia does not cover either. Most industrialized nations have some kind of publicly funded health care systems, which cover most if not the total population. Australia is one of these countries (Mission).

Universal health care systems are lauded for their equality (Mission, 2012). But countries with these systems allow corresponding private health care providers to create a two-part healthcare system: one for wealthy citizens who pay for private and higher-costing quality care. The other is for those who receive public care. Opponents say that the system's cost-efficiency produces lower quality and less than responsive care. Doctors hired by the system are also paid less. The result is a decrease in medical innovativeness and inventiveness (Mission).