This letter, to Health Minister Nicola Roxon, outlines why health care needs to be treated as a system, and why taking a microeconomic lens to the challenges facing that system add new policy options to those traditionally available.
Healthcare services, currently oriented around providers and producers, need to be integrated and reoriented around the ‘consumers’ of healthcare services: patients.
The BCA argues that a comprehensive national health strategy is an indispensible first step. It will identify future health needs and provide a powerful signal to providers about the range of services that will be purchased.
Reshaping the market to ensure that those services are provided and the current gaps in supply are met will involve:
- Stronger price signals to consumers and practitioners, to help reduce preventable demand and increase efficiency.
- A separation of purchasing from public provision to encourage price competition and service differentiation, responsiveness and innovation.
- New measures to improve financial sustainability, including activity-based payments to healthcare providers.
- Urgent investment by governments in a national e-health infrastructure and the connection of major public institutions to that infrastructure.
- Better and more information being made available to patients and their advisers.
- Urgent addressing of the causes of medical errors.
Strengthened quality assurance and governance frameworks will be essential to reform of health care provision. Here the BCA is recommending the creation of a national supervisory commission for health. This supervisory commission would aim to:
- Maintain, facilitate and improve the performance of the health system and its providers.
- Promote confident and informed participation by consumers and providers in their health care.
- Establish and enforce standards and practices designed to ensure that, where reasonable, health care is delivered by providers within a stable, competitive system that seeks to ensure that patients and the public interest are protected.
This transformation will be complex, but it is achievable – provided the right ‘market-based’ disciplines and arrangements are put in place.