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16 Aug 2017


Australian health policy is fragmentary. Some bits make sense; others – if you accept that the purpose of our health systems is to help sick and injured people and to prevent illness and accidents – are wide of the mark.

The “helping” transaction, principally between doctor and patient, gets reduced, by bureaucratic policy-making, to dollar measurement. The “customer” (no longer a “sufferer” patient) is an alert, informed, inquisitive individual, competent to comparison-shop about the dollars and make decisions in their best medical interest.

This is a seriously misguided view of health care. Doctors take account of the vulnerability and degree of “illness” of each patient – physical, emotional, social and economic. These factors affect patients’ ability to comparison-shop between hospitals and doctors, and to make (wise?) choices.

Think back to when you or a close family member was sick; you wanted the best care and the best doctor, especially one whom you know and who knows you. 

Productivity is complex, measured primarily in dollars. Other measurements are, at best, “flaky”. At its heart, productivity concerns the simple goal of job efficiency. When the product is a material good – shoes, cars, groceries – we can find ways, through outsourcing or technological change, to increase productivity, ie throughput (which can be measured) and measurable cost.

Years ago, I witnessed the automation of the aluminium smelting industry near Newcastle… one man in an air-conditioned shovel machine replaced many workers who had filled the smelting pots with bauxite.

But there are roles, especially interpersonal relations, which do not lend themselves to this type of efficiency gain through substitution. Medicine has a mixture of activities, some highly technical (such as biochemical measurements, where machines are progressively doing better than we can) and those where human relations are paramount (think of psychiatry). 

For decades, until he died in May, William Baumol, economist at New York University’s Stern School of Business, had an interest in these distinctions. Musicians, teachers and doctors are among those for whom human interactions are crucial. These aspects of their work are not amenable to efficiency reform. Mozart’s string quartet No 4 demands the same human effort and emotion to produce (and to listen to) today as it did way back in 1772.

Baumol’s 2012 book, The cost disease: why computers get cheaper and health care costs don’t, gives an account of this distinction.

You might think – and I would agree – that a patient’s consultation with a specialist would be considered a primarily human interaction, as is the referring doctor’s choice of specialist. Exploring options for this choice is surely personal, between the referring doctor and the patient, involving the specialist’s personality, expertise, special interests, location, and which hospital they work or operate at. 

The discussion about referral could, in some respects, but only in some, be better informed if there were readily available information about the specialist’s clinical record and co-payment policy.

But what could the ACCC have been thinking in promoting a referral process where the patient could take their referral letter to any consultant of their choice or to any outpatient clinic? That all of medicine, not just the technical aspects, can be made more efficient by dehumanising it?

The “Occupy Health Policy” assumes that the private sector can do everything more efficiently than the public and that the “outputs” can be measured in dollar terms. The ‘bean-counters’ overlook the values which doctors and nurses place on caring for individual patients, and which leads many to work far beyond what they are paid to do. 

By all means, let’s use technology to best advantage and look at appropriate pricing for technologically-assisted health care. Choosing Wisely and similar campaigns lead in this direction, as does the review of MBS items to ensure that consultations, investigations and procedures do, indeed, provide ‘health’ value for money. But to believe that a “bizonomic” solution will fit the human side of Medicine is like seeking a technological replacement for members of an orchestra and their audience. Do that – focus on the money and not the purpose of health care – and you will wreck it.

Published: 16 Aug 2017