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06 Sep 2016

The AMA’s Health Financing and Economics Committee (HFE) met on 6 August, its first meeting with new members on board following National Conference. 

HFE discussed the post-election context and its broad implications for health financing, including public hospital funding. Part of this context is the general view of most political commentators that it will likely be difficult for Government to develop, legislate and implement significant reforms in health.  (Of course, many might consider this is not new.) 

Notwithstanding the general post-election view, HFE considered that the current political climate could provide an important opportunity for a strategic pause in health policy - a pause that allows us to reconsider what the health system was designed for and assess to what extent it is still achieving its original purposes.

A good place to start this rethink could be to review and reassess the Medicare principles.

These principles have typically accompanied, or been incorporated into, health funding agreements between the Commonwealth and the states and territories. They were reaffirmed at the Council of Australian Governments (COAG) meeting in April when all jurisdictions committed to ensuring:

  1. eligible persons be given the choice to receive, free of charge as public patients,  health and  emergency services of a  kind or kinds that are currently, or were  historically provided  by hospitals;
  2. access to such services by public patients free of charge is to be on the basis of clinical  need  and within  a  clinically appropriate period; and
  3. arrangements are to be in place to ensure equitable access to such services for all eligible persons, regardless of their geographic location.

The Medicare principles are a creation of their time, focusing on what in the early 1980s was seen as the key responsibility for health provision by Government: public hospital services.

While they encapsulate some elements of what is popularly understood by the term ‘Medicare’, the principles are actually very narrowly focused on the provision of public hospital services to public patients. 

More recently, the principles have been complemented by a general statement on the Commonwealth’s lead responsibility for general practice (GP) and primary health care (added in the National Health Reform Agreement 2011, and reaffirmed in the COAG Heads of Agreement earlier this year).

While the principles form only part of what is now broadly understood as Medicare, starting with them is a useful first step for review.

Are the Medicare principles still relevant, applicable and useful in the way they were when they were developed more than 30 years ago? For example:

  • are the hospital services that were in mind at the time the principles were developed still applicable? Should they include ‘new’ services not in scope in 1984 (as distinct from changing clinical practice and technology) that may have developed since?
  • Are there aspects of treatment or services associated with, or provided in conjunction with, a public patient service that should be funded differently?
  • Do the Medicare principles provide or support an optimum basis for public hospital funding arrangements, including for transparency and minimising cost shifting?
  • Should they include principles to cover other parts of health care?
  • Should the principles include a future focus and the long term sustainability of health care, beyond short term political cycles?

HFE plans to get a perspective from one of the original architects of Medicare on what the intentions of the system were at the time it was designed.

HFE recognises that changes to Medicare that affect the public’s understanding, assumptions and expectations will ultimately need broad support, including from all sides of politics.

While some groundwork and rethinking could be done now, such as reviewing the Medicare principles, a public discussion and debate is some way off.

In the meantime, HFE will be considering these issues to inform the AMA’s position and its contribution to future public debate.

Your input and views will be valuable as part of this work.


Published: 06 Sep 2016