Category: Rural health

Led by Barnaby Joyce the National Party is again missing the opportunity to invest in serious reform and improvement of rural health services. Instead it is pursuing a national resource agenda in just 9 of Australia’s 47 rural electorates. This provides manna for large multinationals but leaves people in the other 38 rural electorates with poor prospects for improved health and health services.

In the 2022 election campaign Barnaby Joyce has had his chequebook out to pay for some relatively small local gifts along The Wombat Trail. Recent mentions have included $25 million for an upgrade of the Shepparton Sports Stadium; $600,000 to improve amenities at the Armidale Rams Rugby League Club; and $3.3 million to the Burdekin Shire Council to expand the Ayr Industrial Estate.

One of the trickiest things about such proposals is whether, should the Coalition be returned, they will be supported by the Liberal Party and so become real commitments in the context of a Budget.

But we need to look elsewhere for the real news on what the National Party is doing. The serious money promised by the Nationals for ‘the regions’ is for major infrastructure work in a small number of mining areas, their railheads and associated infrastructure.

Despite its claims, the National Party has no appetite for direct investment in better rural health services across the whole of rural Australia. Instead, it is happy to rely on the trickle-down health benefits from resource industries, many of which are run by large multinational corporations. The exception is $146 million for the bottomless pit that is the program to try to improve the distribution of GPs.

The narrow focus of the National Party becomes less of a concern when one identifies the proportion of truly rural electorates it holds. Right now it holds just 10 of 47 electorates that are properly ‘rural’. The Liberal Party holds 13 and the ALP 12. The Liberal National Party (LNP) has nine – all of them in Queensland – meaning that the Coalition as a whole (Liberal plus LNP pus Nationals) has 32 of 47, or 68 per cent. Three rural seats are held by Independents.

(Note: members of the LNP who are elected can choose to join the National Party’s caucus rather than the Liberals’. This adds further confusion to what is already a bizarre parliamentary arrangement.)

‘Rural Electorates’ 2019-2022: as defined by AEC classification plus area

These numbers are based on two criteria. The first is the Australian Electoral Commission’s (AEC’s) categorisation of each of the 151 federal divisions (electorates) to one of four ‘demographic ratings’ on the basis of the location of enrolled voters. The third and fourth categories are Provincial and Rural. Those deemed Provincial are “outside capital cities, but with a majority of enrolment in major provincial cities”. The AEC’s Rural electorates are those “outside capital cities and without majority of their enrolment in major provincial cities”.

The second criterion for inclusion in the list is spatial size (area). Whatever their AEC classification, electorates of less than  1,913km² are excluded. (This is the size of the of the ACT electorate of Bean contested for the first time in 2019. Although it is part of the Bush Capital, no-one would dare suggest that it is ‘rural’! By way of comparison, Eden-Monaro has an area of 41,617 km² and Durack in WA 1,383,954km².)

Of the 151 federal electorates, the AEC classifies 23 as Provincial and 38 as Rural. Thirteen AEC-Provincials and three AEC-Rurals are excluded on the basis of small size. They include Geelong, Gosford, three seats in Newcastle, Townsville, the Blue Mountains and the Gold Coast. Eight of the 16 excluded are held by the ALP.

The AEC’s 61 less 16, plus two AEC-Outer Metros (included on the basis of large area) makes 47. A list of the 47 rural electorates as defined by these criteria is at the foot of this article.

Rural electorates by Party, 2019-2022

Rural health v. regional infrastructure

The National Party refers to rural and remote areas as ‘the regions’. To the extent that they treat rural affairs as a priority at all, it is through a focus on mineral-rich regions that underpin Australia’s export income, GDP and affluence.

But the majority of Australia’s rural and remote people are not in such regions. They are in rural or regional centres or small country towns with mixed economies based on agriculture, service sectors (especially health and education), retail, tourism and transportation.

The most important thing about Barnaby Joyce’s return to leadership of the National Party was not the impact of renewed leadership but the opportunity to re-negotiate the secret deal with the Prime Minister. Joyce seems to have demanded a high price for Nationals’ support for – or at least acquiescence to – a policy of net zero emissions by 2050. It remains to be seen whether this was a core promise or whether it is “all over bar the shouting”.

Given its secrecy, the precise dollar figure extracted by Barnaby Joyce this time is unknown. The AFR has reported that, in addition to the one extra seat in Cabinet, the cost will be $17-34 billion over the coming decade. Budget documents show $17 billion in extra spending for road and rail projects, $6.9 billion for water infrastructure projects (dams) in regional communities, and $2 billion for a “regional accelerator program to drive transformative economic growth and productivity in regional areas”.

Armed with this treasure chest, since his return to leadership of the Party, Joyce has made massive budgetary promises to four regions: the Pilbara, the Northern Territory (including Darwin), the Hunter, and North and Central Queensland. These are critical for Australia’s economic wellbeing. And no-one should begrudge them the support they will need to maintain their enormous economic contributions while the economy as a whole is transitioning to lower dependence on carbon.

But these four regions are contained within just nine of the 47 rural electorates. The Pilbara and associated infrastructure are in Durack, and the Northern Territory comprises two electorates. The chief mineral resource operations of North and Central Queensland are in five electorates: Leichhardt, Kennedy, Dawson, Flynn and Capricornia. (Herbert is less than 100 km² in size and provincial.) Many of the mineral resources currently being exploited in New South Wales are in the seat of Hunter, with three seats in Newcastle also heavily engaged.

What about the people of the other 38 rural electorates?

It is not a matter of investment in mining infrastructure being a  waste. The nation is very heavily dependent on mineral exports. But following his success in taking the Prime Minister to the cleaners in their secret agreement, Barnaby Joyce has so far failed to recognise the importance of reform of the rural health sector and the integration of improvements in the social determinants across all parts of the country.

Trickle-down or crumbs from the table is no way to treat the people of 38 rural electorates covering places like Uralla and Eucumbene, Kojonup and Kempsey, Port Augusta, Port Arthur and Port Fairy. It will do nothing in the short term for people in these areas who are unemployed, living with a disability, hoping to age in place, find it difficult to access education, or experience significant disease risk factors.

Australia’s 47 Rural Electorates

How good is a race!

In the Current Health Policy Stakes, Covid-19 is still distancing all other runners. Back in the pack Men’s Health Week has been promoted to a spot on the rails, but it is the stayer Out-of-pocket Costs that takes the eye. His half-brother, Costs Paid by Patients for Surgery, is well placed, while Mental Illness seems to be finding the going tough. Remote General Practice (by Wayside Chapel out of ABC News Breakfast) is surprising her critics. However all of these, which are in effect racing for second place behind the pandemic, have an eye on Changes to Medicare. This experienced old galloper is threatening with a run down the middle of the course.

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A complex system

The system of payment for medical treatment in Australia is fiendishly complex. Before we set out on a  brief explication, it will be useful to remember that doctors are Business People, specialists are Big End of Town Business People, and insurance companies have commercial interests that span the divide between patient and specialist.

Another significant divide is between those who have private health insurance and those who do not. Only families who might be described as ‘middle-income and above’ can afford private health insurance, which reflects some of the growing inequality among Australian families. Families with low incomes have free access to the services of a public hospital, including for surgery, but are merely bystanders to the private health system.

The proposed changes currently being implemented do not pose a threat to the general principles of Medicare, which are to give all eligible persons the choice to receive, free of charge: the services provided by public hospitals; no-cost or low-cost services from general practitioners and certain medical specialists; and no-cost or low-cost access to medicines listed on the Schedule of Pharmaceutical Benefits. So, experienced though she is, Changes to Medicare should not end up in the winner’s circle.

Medicine means business

Medicare pays a significant amount towards the costs of surgery, regardless of whether the patient has private health insurance or not.

Every particular surgical procedure has a ‘descriptor’ and a standard cost (or fee) struck by the government. Each descriptor defines precisely what the item entails.

The list of descriptors and standard costs is the Medicare Benefits Schedule (MBS). If the procedure is undertaken on a public patient in a public hospital they will have no out-of-pocket costs. The provider (the hospital and surgical team) will in effect earn just the schedule fee.

There are two critical factors in determining how much a patient will pay for surgery. First, each surgeon has the right to charge whatever fee they wish. They are not bound by the standard fee set for the MBS. Second is the patient’s choice of insurer and that insurer’s arrangements with the surgeon who does the job.

So, for example, if the surgeon sets their fee for a particular procedure at 120% of the schedule fee, the MBS will pay 75%, the insurance company 25%, and the patient 20% from their own pocket.

Families with private health insurance are the lucky ones. They would probably be surprised to know that, ironic though it may seem, they are in the hands of insurance companies when it comes to the costs they will pay for surgery. The health insurance companies negotiate commercial agreements with specialists on behalf of patients.

A ‘known gap’ agreement has the insurer entering into a contract with the surgeon so that the patient’s out-of-pocket payment is fixed and known in advance. With a ‘no gap’ agreement the insurer pays the full amount of the difference between the schedule fee and the surgeon’s fee. All of these agreements will need to be reviewed as a result of the MBS review’s recently released recommendations.

Even where there is a no gap arrangement, to avoid what is called ‘bill shock’, the patient needs to find out beforehand what costs associated with the surgery are not subject to the arrangement between the insurer and the surgeon. These unavoidable other costs may include the anaesthetist’s fee, the cost of pathology undertaken as part of the procedure and perhaps medications.

The waiting lists for surgery in public hospitals are much longer than for private patients – those who have health insurance. As well as having less time to wait, private patients can choose the surgeon who will undertake the procedure. (And their hospital room will be nicer.)

For a private patient the MBS pays 75% of the schedule fee. And if that patient’s health insurance company has an arrangement with the surgeon, that company will pay the remaining 25% of the schedule fee (if they have a ‘no gap’ agreement with the surgeon) or a specified amount up to 25% (under a ‘known gap’ agreement).

What has been reviewed?

In 2015 a review of all 5,700 Medicare item numbers began. It was to check on which health service items should continue to be included in the Medicare payment system; how each one is described (the descriptor); and the schedule fee that was to apply for each.

Such a review is sensible and there has been general support for the updating of the standard prices for particular items and of the descriptors. The review involved separate committees for each area of the MBS, and there were extensive consultations.

The government has already announced changes to the items relating to many areas of medicine, some of them in the May 2021 Budget. They have included intensive care, diagnostic imaging, chemotherapy, gynaecology, and pain management.

 The final report was presented to the government in late 2020. It contains 156 changes to general surgery items, 594 to orthopaedic surgery, and 135 to heart surgery items.

It is not the substance of the proposed changes that have upset medical interests, but their timing. Even when it is managed effectively it is hard enough for the government of the day to meet the political challenge of making changes to Medicare, given how much it is relied upon and supported by the Australian public.

This time the government seems to have shot itself in the foot. It has announced that, from 1 July, the rebates payable for private orthopaedic, general and heart surgeries will change. This gives surgeons and health insurers very little time to agree new no-cost and low-cost contracts.  

Insurers could use the opportunity provided by these negotiations to bring down the level of fees, which would enable them to reduce the cost of their insurance packages. But unfortunately there isn’t a flying pig in the Current Health Policy Stakes.

Note: this piece was published in Croakey on 23 July 2019. My thanks to Melissa Sweet and to Amy Coopes, who edited the piece for Croakey.

Serious proposals for redesign of the structure and financing of Australia’s health system have had a chequered history. The level of enthusiasm for discussing radical reform seems to fluctuate like the water level in Lake Eyre, which turns into an oasis only every eight years or so on average.

Currently the health reform discussion cycle is in its barren phase. But ten years ago this week it was in full flood. On 27 July 2009 Prime Minister Kevin Rudd released the final report of the National Health and Hospitals Reform Commission (NHHRC).

The Commission was chaired by Christine Bennett. Its final report, entitled A Healthier Future for all Australians, offered hope of better times to come, including for rural health.

In a section headed Facing Inequities it proposed a series of initiatives for remote and rural health, on matters including equitable and flexible funding, innovative workforce models, telehealth, patient travel support, and expansion of specialist outreach services (e.g. pharmacy and dental/oral services). That same section also had proposals for better Aboriginal and Torres Strait Islander health, such as improving the affordability of fresh food in remote communities.

But almost certainly the most important of its 123 proposals, because of their centrality, were the recommendations on health system governance: who should manage the health system and how.

Unwieldy and complex

The report recommended that Australia develop a single health system, governed by the Federal Government.

Steps to achieving this were to include a Healthy Australia Accord to agree on the reform framework; the progressive takeover of funding of public hospitals by the Federal Government; and the possible implementation of a health funding model, called Medicare Select, under which public and private health plans would compete, allowing consumers to exercise choice and preference.

The problems of the current health system governance arrangements were then and are still well known. The split between the Federal Government and the States/Territories leads to fragmentation of service delivery, cost-shifting, a lack of accountability, and enormous complexity for users of the system.

Currently there are a number of high-level matters causing concern that are related to the system’s governance. They include uncertainty and complexity associated with public hospital funding; increasing out-of-pocket costs incurred by patients; and questions about the place in the system and the purpose of private health insurance.

Also still on the agenda are unresolved access and workforce issues which compromise the universality of Australia’s health system, most notably for Aboriginal and Torres Strait Islander peoples and those who live in more remote areas.

However the central reform issue relating to governance of the health system is not currently being debated.

The pivotal fact around which these current concerns revolve is the mixed (public/private) nature of the health system. Ten years ago the NHHRC report provided a serious challenge to the prevailing assumption that the best health system is one which has a mix of private and public enterprise.

Writing five years after the Commission’s report was presented to government, Christine Bennett renewed her faith in the following terms:

Moving to a single national public funder model with a national health authority responsible to the Council of Australian Governments could provide a system-wide approach that builds on the strengths of a national funder and purchaser.

This is not to say that the federal government would be the sole funder (federal and state contributions could be pooled), nor that the federal government would manage the public hospital system (state governments would continue to operate public hospitals with transparent activity-based funding, and private hospitals could add competition for funding of public patient care).

The independent national body could be an active purchaser across the continuum of services, building on the platform of activity-based funding and exploring more innovative purchasing over time. In the meantime, we could further explore ‘Medicare Select’, as recommended by the Commission, where greater consumer choice, competition and innovation in purchasing may also enable better use of our mixed system of public and private financing and provision.”

Bennett also reiterated the NHHRC’s strong belief about the need to do more for illness prevention, and the critical need for national leadership:

"We need to get more serious about prevention. As with tobacco products, a package of actions is required — from education, social marketing and behavioural change through to regulation and taxation measures. It requires time, investment and the involvement and collaboration of many parts of government, the health system and society. It must be evidence-led where possible, and new initiatives must be actively evaluated.

It is unacceptable to walk away from personal and shared responsibility. We should each have the starring role in our own health and health care decisions. However, inequities mean we do not all have the same life experiences and opportunities. Health literacy, educational attainment, employment, stable housing and many other factors may affect our capacity to make healthy choices. If we are serious about the good health of Australians, we must be serious about making healthy choices easier and fairly available.

In addition to health service reform, there is a serious need for a national action plan that crosses governments and portfolios to address factors in the social environment that affect health status.

Health needs to be a live issue on the national agenda. While there has been some valuable progress, we have not yet resolved the structural flaws in funding and governance that fragment health care delivery in Australia. We have focused largely on public health financing and public hospitals but have not yet considered innovative approaches, such as Medicare Select, to better use the private sector.

We have a long way yet to go on our reform journey, and we need political leadership and strong engagement with the health sector and community as we continue to move towards a sustainable, high-quality and responsive health system for all Australians.”

We need a public debate, made simple enough to be accessible to all of us, about why Australia persists with a mixed system.

Many of the deficiencies of our health system, and much of its complexity, exist only because it is a mixed system. There is duplication and overlap, making it hard to ensure a safe, smooth passage for the patient through an episode of care. There is cost and blame shifting. There are divided responsibilities for workforce planning.

With a unitary public system it would be simpler to identify and fill gaps in services and access; and it would be easier to establish the desirable level of national expenditure on health. In the current situation people are unable to understand how the financing arrangements work.

From deluge to drought

Ten years ago the enthusiasm for radical reorganisation of Australia’s health system dried up for a number of reasons before much was achieved.

Kevin Rudd and then Julia Gillard had to focus on the consequences of the global financial crisis, as well as the turmoil within their own political ranks. They were also consumed by the search for a budget surplus and the possibilities of tax reform outlined in the Henry Tax Review.

The COAG meeting promised by Kevin Rudd to focus on health reform was held on 7 December 2009. It was agreed at that meeting “that national health reform would be a central priority for 2010”.

The assertion that the Prime Minister gave Nicola Roxon, his Health Minister, a weekend to plan and manage the transition is perhaps apocryphal. But it is clear that both Kevin Rudd and Tony Abbott (as then-Leader of the Opposition) were at the time enthusiastic about major reforms to the health system.

When the two of them debated health at the National Press Club the former was promising to take health reform to a referendum if the States and Territories failed to back his proposed change, while the latter was talking up abolishing regional health bureaucracies and moving control of hospitals (at least in the most popular states) to local boards.

This was not Tony Abbott’s only excursion into significant structural change in the health system. In his 2009 book Battlelines he said Medicare should fund dental care for every Australian. As it happened this was one of the proposals in the NHHRC’s final report: a Medicare-style scheme — labelled Denticare — for dental treatments.

However the wheel turned and the lake dried up again.

Some ground was gained and some lost. The Australian National Preventive Health Agency, proposed by the NHHRC and established in January 2011, targeted the prevention of obesity, tobacco use and harmful use of alcohol. It was abolished in the 2014-15 Budget.

Health Workforce Australia, established before the NHHRC in 2008 but which it  saw as providing a platform for a national, coordinated approach to health workforce planning, training and innovation, was also abolished in the 2014-15 Budget.

But all is not lost: we still have images of a time when fundamental health system reform was on the agenda and being seriously considered. Those images can remind us of the good times and inspire us to visit the vision splendid again some time in the future:

Health reform does not happen overnight. It takes time and patience, commitment and goodwill from all of us. But we also believe that there is a pressing need for action, and health reform must begin now.” Dr Christine Bennett, Chair, NHHRC, in letter of transmittal to Minister Roxon, 30 June 2009

COAG agreed that long-term health reform was required to deliver better services for patients, more efficient and safer hospitals, more responsive primary healthcare and an increased focus on preventative health.” COAG Communiqué, 7 December 2009