We need some big changes to Medicare to keep our health system strong

Overall, about 10 per cent of GDP is spent on health, which amounts to just under $8000 per person per year. That puts Australia 9th amongst OECD countries. Of the total $200+ billion spent on health each year, governments fund 70 per cent, with the Commonwealth funding $86 billion and the states and territories $56 billion. $83.5 billion was spent on hospitals in 2019-20, and $67 billion on Primary Health Care, of which about $13.3 billion was spent on unreferred medical (mainly GP) services, $13 billion on subsidised medications and a further $12 billion on other medications. $20 billion was spent on referred medical services (including allied health).

An ageing population, increasing complexity of chronic conditions and ever-increasing sophistication of medical technology, all place pressures on health expenditure for the future. Changing a system that is as large as the health system, and responsibility for which is split between two levels of government and private sources, and where service provision is divided between public and private sectors, is extraordinarily difficult. But the current pressures on the health system, precipitated by pressures on general practice, emergency departments and hospitals, and exacerbated by COVID and workforce shortages, have elevated the issue as a topic of national importance to the heads of the Commonwealth, state and territory governments - and the focus is very much on primary health care.g

The recently published Strengthening Medicare Taskforce Report is said to be based in part on Australia's Primary Health Care Plan 2022-32. Of course, this document, like so many of its counterparts, is not a plan in any meaningful sense of that word. Rather it is a set of aspirations with generally commendable aims and objectives. There are three streams, which aim to see that primary health care in the future is "future focused", "person-centred" and characterised by "integrated care, locally delivered". An implementation oversight group (but not an actual implementation group) was envisaged. The "plan" hints at capitation, multidisciplinary team-based care, and the need for greater attention to the Aboriginal community-controlled health sector, disadvantaged groups and those in rural and remote areas. And there is a nod to the increasing use of technology, IT, planning and research and evaluation. All good stuff but, in the normal course of events, unlikely to go anywhere much.

This is where the Strengthening Medicare Taskforce Report comes in. It, too, is replete with commendable aspirations if you can read through the bureaucratic jargon ("quality person-centred continuity of care"). But what does it actually recommend? There are quite a lot of references to "new funding models" and "voluntary patient registration" which might conceivably open up the prospect of some form of capitation rather than the current fee-for-service model. There is also quite a lot about workforce issues for GPs, allied health and other health professionals whose supply and distribution are to be "fast-tracked", whatever that may mean. Importantly, multidisciplinary teams and the need to beef up public health networks and their links with local hospital networks get a run. Better records, increased use of IT, research, evaluation, and practice management are also mentioned.

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The Australian Medical Association, however, despite participating in these documents, seems far from satisfied with what it anticipates will be the government's response, and it may have a point. Its concerns appear to lie with the lack of any immediate intention to address the issues with general practice, which is behind much of the current public concern. General practice seems to be losing its attraction as a specialty as it lacks the status and financial rewards of other specialities - despite in many ways, it being a more demanding role than those of other specialists who have advanced training in increasingly narrow areas of practice. It seems likely that a revamped system would need to envisage a potentially larger role for GPs, with GPs being the centre of a team-based approach involving allied and other health professionals and dealing with the whole person and their family and community, rather than the isolated super specialised branches of medicine being provided by other medical specialists. That would require that GPs are afforded at least equivalent remuneration and status as other medical specialists.

This could suggest a funding model, based on capitation, for health centres where care is provided by a team involving GPs, nurses, allied health staff and practice management, IT and record staff and pathology and diagnostic facilities, closely integrated with public health networks and local hospital networks. Variants of such models exist in Australia and overseas. Some of the best models in Australia are those run by Aboriginal and Torres Strait Islander Community Controlled Health Services, funding for which needs to be significantly enhanced if current service gaps are to be filled. It is clearly envisaged that any move in this direction would be voluntary and such health clinics or centres would exist alongside fee-for-service practices. It remains to be seen who would operate these health centres and there may be a role for cooperatives, and the public sector in certain settings, as well as private organisations, though a not-for-profit basis would offer some advantages.

But the elephant in the room is the perverse incentive inherent in the role of both Commonwealth and jurisdictional governments. Shortfalls in the provision of primary health care, for which the Commonwealth is largely responsible, end up in increased and avoidable demands on both inpatient and emergency services funded by the states and territories. In the end, the system needs to have an overriding incentive to keep people healthy and it may be time for discussions to be held about the Commonwealth handing over the funding for primary health care for the proposed health centres to the states and territories, who would become responsible for integrated comprehensive health care. There is no reason why Australia should not aspire to have the best health system and become the healthiest country in the world.