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Reforming Medicare « Previous | |Next »
January 17, 2012

In his opinion piece----What is wrong with Medicare? ---in the Medical Journal of Australia Tony D Webber argues that the lack of audit control and inability to adapt to change leads to massive waste. He estimates that 2–3 billion dollars are spent inappropriately each year.

One form the waste takes is the Medicare Benefits Schedule (MBS). This is riddled with misdirected incentives for practitioners, contains items that have not been reviewed despite advances in technology, and has many examples of good public policy thwarted by the MBS rules.

Webber, who is the Director of Professional Services Review that was established to protect the integrity of Medicare and the Pharmaceutical Benefits Scheme (PBS), says that:

In general practice, general practice management plans (GPMPs) and team care arrangements (TCAs) have created opportunities for a bonanza for some practices. Several practitioners I have reported on had admitted that their corporate owner had a business plan based on a defined number of these items claimed every week, irrespective of clinical need. Medicare Australia is also aware that a significant proportion of these plans are not carried out by a patient’s usual doctor’s practice.2 Anecdotally, claiming for clinically unnecessary GPMPs is significant throughout Australia. The policy intent of GPMPs was to provide a higher standard of care for patients with complicated chronic disease. While many doctors use these items appropriately for positive patient outcomes, a proportion of claimed items have added nothing materially to patient care.

Another form of waste that Webber highlights is the Howard government's Medicare Safety Net is one of the most poorly thought-through pieces of health legislation.

Despite its laudable policy intent — to help those with severe and chronic disease afford the cost of modern medical care — its implementation has gaping holes. The open-ended nature of the Safety Net offers the minority of unscrupulous and greedy practitioners opportunities to exploit it. After the Safety Net was introduced, a small group of obstetricians raised their fees for antenatal care from around $3000 to nearly $10 000. Such use of the Safety Net was perfectly legal, thanks to sloppily drafted legislation. During my time as Director of Professional Services Review, the Safety Net was used in effect to subsidise cosmetic procedures such as surgery for “designer vaginas” at $5000–$6000 each.
The AMA, in responding to this criticism, accepted that there were some instances of abuse but argued that it was a matter of a few bad apples, common in every occupation, and not a systematic problem that runs through medical practice.

That response ignores a structural flaw in Medicare the GP as gatekeeper with respect to team care arrangements (TCA's). The policy intention was to allow patients with chronic or terminal disease to receive previously unaffordable care to allied health pratictioners (podiatry, physiotherapy, psychology, chiropractic). Unfortunately, the Department of Health and Ageing (DoHA)

developed MBS items that create incentives to easily misuse and work around the MBS requirements, leading to their misuse by a proportion of both medical and allied health practitioners. Some practitioners consciously misuse the MBS occasionally, and some do so regularly. The policy intent could have been achieved by allowing direct referral, without financial incentive to the doctor. This measure alone would have saved the health budget well over a billion dollars over the life of the program. Instead, a monster was created, eroding the integrity of the health budget.

The politics of medicine require that the GP act, and be paid, as the gatekeeper of Medicare.

Another structural flaw in Medicare arises from the changing health problems associated with a changing society. Jim Gillespie says that the Medicare system was designed for a younger society when the problems in the health system revolved around very short episodes of disease. You went to a general practitioner if you had a sniffle or some other minor complaint. And the fee-for-service system works very well with such occasional contacts. Hospitals worked on an entirely separate system that dealt with very serious illness.

Today we are living healthier, longer lives, but an ageing society brings with it a greater burden of chronic disease. Instead of short episodes of illness, ending in death or cure, this growing burden comes from serious and continuing illnesses, such as diabetes, chronic heart disease, and respiratory illnesses. These need continuity of care and management.

The structural flaw is that the Medicare universal insurance system wasn’t designed to encourage continuity of care. Instead, it uses fee-for-service to fragment care into short episodes. Hence the need for reform. But the Australian health system is very hard to reform.

| Posted by Gary Sauer-Thompson at 9:38 AM |