Thursday, March 20, 2014


The NSW minister for health, Jillian Skinner, announced March 20th affirmative funding of $120M over three years to Western Sydney, Central Coast and the Greater Western NSW local health districts to enable the development of integrated care models.

Concurrently, the federal minister for health, Mr Dutton, is looking for ways to spend the billions of health dollars more efficiently.  This is a worthy goal and there are examples of health systems where humane care is mixed with efficiency that deserve his attention. Many make excellent use of private enterprise.

Several large private health insurers in Australia have moved in the past twenty years beyond reimbursement to members and health care providers for clinical services into the direct provision and management of care

These services have included telephone-based coaching for insured members to assist them manage chronic health problems and assistance with healthy lifestyle behaviour.  The big users of private cover are, as expected, the people with multiple long-term problems and it is in the interest of all health care providers – public or private – to ensure that these people receive efficient care and avoid where possible unmanaged deteriorations in their health that, usually after weeks, lead to hospital admissions.

Our studies in western Sydney and the ACT of patients with chronic illness have confirmed what a crisis a hospital admission is for these people. 

Take for example a patient with chronic lung disease who panics in the middle of the night with breathlessness after a week of bronchitis for which he has not sought care. Unless there is a health service care professional who knows him and whom he can call, he will call the ambulance. So would I.

The ambos do a great job but the chances are that when he arrived in the ED, where his record will not be easy to retrieve and there is little chance of the staff knowing him well he will have been given oxygen which, while good for him in many ways, will depress his breathing and he may now well need ventilation for carbon dioxide retention. 

A couple of weeks and a few hundred thousand dollars later he may be out of hospital.  The dislocation (will his cat still be OK?), the demands of hospitalisation on an individual with few reserves, the impact on family and carers, is huge. Home care support has to re-organised. His GP has to be brought up to speed.  It is also expensive.

So pursuing alternative ways of handling such incipient disasters is to be highly prized. 

Australia has an integrated system of care for patients with such problems that deserve far greater scrutiny than it receives.  It works remarkably well.  Patients appreciate it. It has a comprehensive computer-based data system for patients.  It knows what happens to them when they use different hospitals and doctors. It has programs for managing patients with different ailments.  It does not cost the earth.  Doctors generally find it acceptable.  It is called the Veterans Health Administration.

It is a managed care system.  The allergic responses of elements of the medical profession to managed care take their origin from earlier models in the US that limited clinical freedom and reduced health care costs for several years but were hugely unpopular.  Many sank without trace or regret. Progress has overtaken these old models and contemporary managed care in the US deserves a closer look. 

Four years ago I visited Kaiser Permanente (KP), a prepaid health insurance and care provider agency in California that cares for 6 million people; it has its own hospital medical centres, primary care, preventive services, community-based practices and more. You pay your premium and you receive all necessary care, managed through KP.  The outcomes (and KP does measure them whereas in Australia we don’t) are superior to those achieved by expensive, unmanaged systems.  A formal evaluation several years ago showed that the costs per patient per year were less in KP than in the British NHS.

The essence of managed care is that the payer, in this case the KP insurance company, has a vested interest in making sure you get the best outcome and that you, as the patient, stay as well as possible and manages all aspects of your health care with you.  Not just internal medicine and surgery either. I saw effective GP-based preventive care in KP that made me weep over our paltry efforts in Australia. 

One single payer for care means that the payer is interested in prevention and not just cure and in the effectiveness of all forms of care they provide.  In Australia we preserve a system that rewards cost shifting – another name for guilt-shifting over inadequate treatment form the Commonwealth to the states and back– slosh, slosh, and slosh again. (Ages ago I met a person at a dinner party who told me brightly that his full-time job in a health bureaucracy was cost-shifting.  Happy as a clam because there was SO much to do!)

KP is one of a dozen first-class managed care organisations in the US.  They all have sophisticated IT systems that link providers and patients in a social network.  No-one is alone.  Talk to the doctors working in the system.  Talk to the people using it.  Look at its financials.  Effective, efficient, and humane. Now that’s a good start.

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