New DOCTOR
No 72 Summer 1999/2000

 
The DRS on Public Hospital Funding

The Doctors Reform Society of Australia submission of October 1999 to the Senate Community Affairs Reference Committee Inquiry into Public Hospital Funding, collated by Dr Peter Davoren, the DRS national president.

Preamble

The Doctors' Reform Society (DRS) is an organization of Australian doctors and medical students. Members, from all sections of the profession, are united in their concern for the provision of a just and equitable health care system.

The DRS believes:

• health and healthcare are a common good with a shared responsibility in the community;
• universal access to healthcare should be unhindered by capacity to pay;
• the principle of Medicare with universal coverage funded by general taxation is the fairest and most efficient way of delivering healthcare; and
• any proposed changes to healthcare funding or delivery must account for potential negative effects to universal coverage and equity.

1. Current funding levels and public hospital services

The DRS believes that the total current spending on health may be sufficient, however the community is not getting full value for its spending and considerable waste and duplication occurs within the health system. The Commonwealth government has been consistently restricting its spending on public hospitals and expecting the States to meet the shortfall. This has led to moves by the States to shift service provision to the private sector and shift the costs back to the Commonwealth via Medicare payments to doctors and moves by the Commonwealth to detect and restrict such practices. The DRS provides the following facts on the ability of Medicare to provide an efficient health system:

Australia currently spends 8.4% of Gross Domestic Product (GDP) on health, about average for OECD countries. In the 12 years to 1997-98 our spending on health increased from 7.5% to 8.4% of GDP, even though the GDP declined during the recession of the early 90s. It is of great concern to the DRS that the policies of the current Federal Government are driving us toward a more privatised health system and leaving the public health system as a poor cousin. It is worth noting that in the United States where private, for-profit medicine is the standard, spending on health runs at over 14% of GDP 40 million Americans have no access to any health cover. Infant mortality rates are 10.8 (males) and 8.8 (female) per 1,000 live births compared with Australia's 7.9 and 6.0 deaths per 1,000 live births respectively and age standardised death rates are also better in Australia (551 vs 626 deaths per 100,000 for females and 897 vs 1,027 deaths per 100,000 for males).

Governments are in a position to exercise greater market power (through regulation and monopsonistic control) to contain expenditures through global budgets and price and volume controls (Donato & Scotton 1998: 23-24).

The USA's fragmented healthcare funding arrangements, with numerous insurers as opposed to a universal health insurance scheme, is considered to be contributory to their rising healthcare expenditure (Evans et al 1989, Goldberg and White 1995, Pearson 1994). The USA system is more costly and less efficient (Himmelstein and Woolhandler 1986, Pearson 1994, Woolhandler & Himmelstein 1991). In 1996 per capita spending on US hospitals was more than double the OECD median. The USA has fewer hospital days per capita and shorter length of stay but much higher hospital expenditures per day than other OECD nations (Anderson & Poullier 1999, Iglehart 1999). Himmelstein and Woolhandler (1986) examined four components of administrative costs in 1983: insurance overhead, hospital administration, nursing home administration, and doctors' billing and overhead expenses. They found the USA's healthcare administration costs were 97% higher than in the UK. A further study examining data from 1987 (Woolhandler & Himmelstein 1991) found the USA's administrative structure was becoming more inefficient compared to national health programs such as in Canada. The spread of private health insurance also leads to greater healthcare expenditures (Newhouse 1993, Peden and Freeland 1995). This has been attributed to higher overheads and limits to capping of costs.

In Australia there has been a mixed and inconsistent system of cost controls. Public hospitals have controlled global budgets whereas medical and pharmaceutical services have controls over content and price but not volumes (Leeder 1998, Podger 1999). Despite inconsistencies, Australia has managed to control healthcare costs fairly well.

Whilst most developed countries have seen health cost inflation running at 1-1.5% above the average rise of prices for the economy (and closer to 2% in the US), price rises in Australia in the health sector have been 53.6% in the 12 years to 1997-98 compared with 52.7% for the whole economy. (Deeble 1999) During the period from 1975 to 1996 excess health inflation rates for Australia were 0.1%, the UK 1.1% and the USA 1.8% (AIHW Nov 1998:19).

Medicare services increased by 30.0% per person in the 12 years to 1997-98 but the average benefit paid per service actually fell from $35.10 to $33.30 in 1997-98 dollars adjusted for the CPI (Deeble 1999).

Total recurrent spending by State and Federal Governments on health services per person has only increased 5.7% from 1992 to 1996, an average 1.4% per year. The number of visits to GPs and Specialists (52% of the Medicare payments cost) has only increased at less than 1% per year. (AIHW1998)

Unreferred services (mostly GP visits) have risen from 4.29 to 5.50 per person in the 12 years to 1997-98 and the benefit paid per service to GPs has increased by 5% above the CPI for the same period (contrary to wide-spread opinion). Benefits for referred services (specialist visits, radiology, and pathology) have declined 11.5% against the CPI for the same period (Deeble 1999).

Spending on public hospitals has increased 64.7% in the 12 years to 1997-98 and admissions to public hospitals have risen 58.9% for the same period. Outlays per admission have risen only 3.7% over the 12 years (Deeble 1999).

The Commonwealth has failed to expand its contribution to public hospital funding adequately over the last 12 years with increases built into early Medicare agreements barely sufficient to cover growth in the population. The States have been increasing their spending on public hospitals at 2.2% per person per year whilst the Commonwealth has barely managed 1% (Deeble 1999).

More recently the Federal Government has increased its recurrent spending on public hospitals by 24% over a 6-year period but in Victoria the State Government has decreased their component of spending by 27% and in consequence, total government spending on public hospitals in Victoria fell by 5.8%

There is no blowout in health costs in the public sector. Medicare has been able to control the growth in non-hospital health costs over two decades. Despite the Commonwealth's persistent restrictive funding of public hospitals Australia's public hospitals have shown marked increases in productivity. The private sector has no cost control except the patient's pocket.

The DRS is particularly concerned by the current Government's support of private health insurance and its desire to spend public funds on propping up an inefficient system. It is worth noting that:

• Administrative costs of the private health insurance industry far exceed the administrative costs of the Health Insurance Commission which administers Medicare and the Australian Taxation Office (12.5% of funds vs 4.7%).
• Private health insurance premiums have been growing at over 7% per annum over the last eight years and spending on private hospitals is increasing at 8.4% per year. Out of pocket expenses continue to rise.
• The number of freestanding day hospital facilities increased from 94 to 153 between 1992-93 and 1996-97. These facilities concentrate on short procedural work which is most profitable. It is arguable that a not insignificant proportion of these procedures is unnecessary but Medicare still contributes to doctors' fees for such procedures. In 1996-97 44% of all private hospital separations were same-day patients separations.
• Schedule fee adherence has risen from 77% in 1985-86 to 81% 1997-98 and substantial over-billing is mostly confined to insured patients in private hospitals (Deeble 1999).

Rural Australia is currently under-serviced for health care and there is a continuing drift of doctors away from remote areas of Australia. Established rural doctors are leaving because of the excessive workload they face, their inability to get relievers for holidays and continuing education and often also for family reasons. Relative isolation makes continuing education difficult. The breadth of skill and knowledge required by country doctors and the relative lack of specialist back up puts off younger doctors. Whilst recent training programs are trying to address some of these issues there are insufficient places to provide an adequate number of practitioners for rural Australia. Similar problems exist for specialist services in rural Australia. The undersupply of doctors leads to decreased provision of hospital services, which makes it even less attractive for doctors.

Waiting lists.

These are an ongoing concern for patients, doctors, and politicians. They are easily talked about in the media. They are most probably a significant factor in scaring people into private health insurance, even when it takes 5% of their income ($1,000 from a pensioner with a little extra, living on $20,000/year). Elective surgery however accounts for only one part of a hospitals activity (probably no more than 20%). The elective surgery waiting list is a crude measurement open to all sorts of manipulation and gives no indication of health outcomes. Our members are aware of the following practices which have been used to manipulate the "waiting list":

• re-classifying patients
• having long waiting times for out-patient appointments (say 2 years) so few people have any chance of getting on the waiting list
• hospitals concentrating on short and/or simple cases which can be done quickly in large quantity so as to reduce the waiting list
• no service or token service being provided by a hospital (e.g. in ophthalmology). GPs recognise the futility in referring a patient to such a service and send their patients elsewhere.
• long waiting times for specialist out-patient appointments before even being considered for a procedure

Adding to the notoriety of elective surgical waiting lists is the lack of control and knowledge hospital administrators have over such lists. Our members regularly discover circumstances where they cannot find where their patient sits on a waiting list because a VMO keeps the list himself or herself, decides on the list as they go along or has some other mechanism for deciding on who goes on a public waiting list.

Waiting lists, however do have a place in the running of the health system. Outside of immediate life-threatening emergencies a period of waiting is not harmful and indeed may be beneficial. Such benefits include:

· giving the patient sufficient opportunity to consider whether they wish to undergo surgery

· allowing the patient to discuss the advice of surgery with their GP, family members or other health care provider

· some conditions improve with time and surgery may be unnecessary some months down the track

· a full waiting list allows for the efficient running of elective surgery lists and does not have staff available when there is no work to be done

· allows patients to get their affairs in order if there is a significant morbidity or mortality associated.

Despite these reservations it is a major concern that currently 12% of Category 1 patients (urgent surgery required) have waiting times > 30 days (95-96 from AIHW 1998).This is dealing with death. Twenty-two percent of Category 2 and 3 patients are waiting extended times (AIHW). This means people are suffering for long periods because of inadequate services.

There are several measures that if instituted, would make the debate about the meaning of waiting lists clearer to all. As of 1998, there were still deficiencies in the collection by AIHW of data under uniformly applied data definitions despite a recommendation of the Baume report. That report recommended that `each State and Territory Department of Health report to AHMAC every 12 months on the numbers of people awaiting elective surgery, the numbers of people who have waited longer `than is clinically appropriate' for admission for surgery, and the number of people waiting for longer than six months for admission for elective surgery. '

Much more than this is required however. The measures to artificially reduce waiting lists will proliferate like tax minimisation measures to ensure the reputation of the institution. Identification of the waiting list for specific procedures, clearance rates for specific procedures, types and numbers of procedures performed, and waiting times for outpatients, all need to be accurately measured in an identical way at all hospitals. Alongside this information there should be clear guidelines laid down indicating the minimum service that Medicare should provide. This should stipulate appropriate waiting times, level of services available at institutions of varying size and catering for various populations and geographic areas. This information then needs to be put in the public domain for referring doctors and for patients to consider. Then the onus would be on the hospitals and on the Governments to perform and this information would limit the ability of bureaucrats and politicians to hide behind the uncertainty of the information as they currently do.

A variety of recommendations were made by Professor and ex-liberal senator Peter Baume in his Federal Government commissioned report A Cutting Edge written in 1994. These included increasing salaried surgeons rather than VMOs in public hospitals, asking the specialist colleges to identify strategies to reduce waiting lists, increasing training places for surgeons, mandatory second opinions for some forms of elective surgery, increasing training for GPs to perform many simple procedures which have inappropriately become the prerogative of the specialist in this age of specialisation. There is little evidence to date of any significant implementation of these recommendations.

The DRS is concerned at the extent to which health care is synonymous with hospital care in the health debate. Hospital treatment is only one part of health care and, whilst it accounts for less than 40% of public spending on health, hospital care is clearly the most costly part of health care. Hospitals are increasingly being occupied by the chronically ill as elective surgery hospital stays are decreasing with the move to day surgery and minimally invasive surgery. In this area of care of the chronically ill, greater support for community services has the opportunity to reduce the pressures on public hospitals. This is addressed further in Section 5.

The DRS supports the continued provision of a universal public health system via the taxation system. The inherent fairness in the system comes from the collection of funds on an ability to pay basis and the distribution of services on a needs basis. Co-payments and a user pays system are unfair. Co-payments will discourage the genuinely ill from seeking treatment when necessary if the patient is concerned about their ability to pay and will discourage preventive care. Our members regularly see patients who do not access health care because of their fears about cost.

A user-pays system is a tax on the sick. We believe most Australians are prepared to meet their share of the health bill through the taxation system, and are happy to not have to use it if possible. A user-pays system even if means tested will restrict collection of monies and the sick will carry the burden. The taxation system is means-tested and the taxation system collects from everyone who can pay, not just the sick.

A flat copayment is regressive, with the poor paying proportionally more of their income. Payment by the government through general tax revenue is progressive, with wealthier taxpayers contributing more. Copayments have a greater impact on the poor and sick both to access and financing. Copayments result in a heavier burden of healthcare costs on the poor and sick (Beck & Horne 1980, van Doorslaer et al 1999:303, Evans 1984:51, Richardson 1991:25-26, Saltman & Figueras 199799-100, Schofield 1997a, Stewart & Enterline 1961 as cited in Richardson 1991:25-26, Wagstaff et al 1999:288-290).

The World Health Organization's "European Health Care Reform Analysis on Current Strategies" (Saltman & Figueras 1997) review of cost sharing concluded that cost sharing is not a useful tool for improving efficiency or containing health costs and direct charges to patients are not likely to generate substantial revenue without adverse consequences in terms of equity.

2. Cost-shifting

It is obvious to our members that cost-shifting is one of the great growth industries in health care in the 1990s. Many of our members have witnessed health bureaucrats and hospital administrators manoeuvring to shift costs between governments. We supply the following examples:

i. Bulk-billing patients attending public out-patient clinics in public hospitals to raise revenue.

ii. Closing down public out-patient clinics so that new and follow-up patients have to be seen in specialists private rooms or staff specialists "private practice" clinics.

iii. Public hospitals failing to provide any services at all in some areas so that patients are forced to seek treatment in the private sector. This classically occurs in areas such as ophthalmology, urology, rheumatology, dermatology, paediatrics, orthopaedics, ear, nose and throat surgery and allied health services such as podiatry and speech therapy. Radiology and pathology are also often areas where states can easily cost-shift to the Commonwealth.

iv. Patients being sent from the public hospital out-patients back to their GP to get a referral for a CT scan, nuclear medicine test or pathology test so it doesn't have to be done in the public hospital. Not only does the Commonwealth pick up the tab for the investigation but also an unnecessary visit to the GP so the test can be ordered.

v. Public hospital pharmacies providing out-patient prescriptions at prohibitive costs (3 - 10 days supply of a drug at the same cost as 30 - 60 days supply at a private pharmacy) or not providing some drugs at all, forcing patients to attend their GP for a prescription (and again incurring an extra consultation cost to Medicare).

vi. The ban on public hospital doctors providing PBS prescriptions, again forcing patients to attend their GP for a prescription and an extra GP consultation charge to Medicare (a Commonwealth ploy).

vii. Doctors in public hospital outpatients being told they must write private scripts for their public patients (a State ploy and a practice the HIC said was a grey area legally).

viii The ban on public hospital doctors ordering private radiology and pathology investigations. Obtaining an investigation in the private sector may be quicker or more convenient for the patient. If needed the patient has to attend their GP for a request.

ix. The proliferation of 24 hour medical centres with-in the shadows of public hospitals hoping to pick up the over-flow from busy casualty departments.

x. Pre-operative and post-operative visits being pre-admission investigations being organised by the GP shifting the cost from the hospital in-house facility to the private sector.

3. Impact on patients of cost-shifting practices.

i. The financial cost of having a service provided privately. Many specialist consultations are not bulk-billed or provided at the rebate fee. Radiology is often charged above the scheduled fee. Patients are required to make out-of-pocket payments in these instances

ii. It is time-consuming for patients to be attending many doctors around town when all services could be provided in the one hospital. The impact on time lost from work would be difficult to calculate.

iii. Important treatments and investigations are missed as patients are sent to obtain prescriptions and request from other doctors. The elderly are most at risk and the ones who turn up for hospital admission when things go wrong.

iv. Loss of subsidised access to ancillary services such as physiotherapy, podiatry etc which may only be available at the hospital to patients of the hospital.

v. Loss of continuity of care when hospitals ask patients to see GPs for prescriptions, referrals etc.

vi. Loss of training opportunities particularly in radiology, pathology and the specialities that have less need for in-patient beds such as ophthalmology and dermatology as hospitals reduce staff to the bare minimum threatening an adequate supply of specialists in the future

4. Options for re-organising Commonwealth and State health funding.

The Medicare Agreement is being ignored, if not in legal terms, at least in spirit, by most of the cost shifting arrangements The Federal Government needs to either look at ways of enforcing the agreement, or legislating appropriate enforcement of the agreement.

A much more clear definition of the different funding and service provision responsibilities of the three tiers of government needs to be established to prevent further cost shifting and duplication. For example, with respect to recurrent hospital funding the requirement could be that there is a 50/50 division of costs and that if one government increases their contribution the other must match it. Reduction in funding should not be permitted, as it can't be justified.

5. Alternative approaches to funding.

Encourage a return to the general practitioner as centre of health care delivery. This would require adequate support so the GP could access all health services needed for his/her patients. Changes that would be needed include:

i. Altering the funding for general practice so GPs are not rewarded for short consultations that only partly deal with a patients problems and are not penalised for longer and more complex consultations which may provide less need for health services in the longer term.

ii. Encourage multi-disciplinary health centres with full allied health, nursing and medical staff. A funding structure that allows for payments even if the GP does not see the patient is necessary. There should be a place for salaried GPs in such a system

iii. Re-implement the salaried trainee in general practice. This will help ensure cost-effective medical practice in the long term. All specialist trainees are salaried and the only difference will be that GP trainees will work in general practices and not public hospitals.

iv. Returning the specialist to the role of consultant who provides advice in difficult cases and does not just become another doctor(s) who follows the chronically ill indefinitely with little gain to the patient.

Independent drug detailers to provide information to GPs and specialists to improve rational pharmaceutical use and reduce pharmaceutical costs

6. Impact of the private health insurance rebate.

The DRS believes the private health insurance rebate and its means-tested predecessor have been retrograde steps in improving the efficiency of the health system and the people of Australia have every right to be concerned about this waste of money. For $1.5 billion a year (20% of what the Commonwealth spends on public hospitals) no more than 100,000 extra people are covered by private health insurance. The government could have bought 1.5 million individual memberships each year with the same money or opened an extra dozen 500 bed public hospitals.

Not mentioned in the debate of public funding of the private health industry are the large subsidies provided by the State governments who sell public beds to private patients at a fraction of the cost as well as providing medications, theatres and dressings at no cost to the patient. These subsidies are substantial.

Australians have been voting with their feet for years. They don't wish to pay inflated premiums so they can attend a private hospital where large gaps put them further out of pocket. The Australian population have supported Medicare at the ballot box since its inception. The Government should recognise this.

The rebate was always bound to fail and is more likely to cause deterioration in public hospital services. This is easily predicted:

• $1.5 billion dollars spent on a private health insurance rebate is $1.5 billion dollars not being spent on public health.
• Public hospitals are not filled with the idle rich lying around taking up a bed that could be used by someone else. The major users of public hospitals are the chronically ill and the chronically ill are mostly (although not always) the elderly, the disadvantaged and those of low and fixed income. In the 12 years to 1997-98 private admissions to public hospitals have declined 60% and public admissions to public hospitals have increased 88% (Deeble 1999). Admissions of private patients to private and public hospitals combined have increased 15% in the same period. The declining rate of private health insurance is not necessarily increasing the need for more public hospital beds as many beds in public hospitals are being vacated by private patients. The expanding population is as likely to be increasing the demand for public beds.
• People who take out private health insurance are more likely to self-report good health. People with private health insurance are less likely to get sick and most of the extra 100,000 in private health insurance probably won't need a public hospital in the next year. Thirty-one point six percent of the Australian population had private health insurance in Dec 1997 (AIHW 1998:176). A review by Schofield (1997b) found high income and income from investments or superannuation were factors associated with holding private health insurance. Those on pensions and benefits had the lowest levels of private insurance. The age distribution demonstrated peak at 50-54 year old and the lowest level for people aged 80 years or more, the second lowest for people aged 15-29 years. People on low incomes and in poor health were much less likely to have private health insurance.
• 20% of people admitted to private hospitals have no private health insurance. It is possible some of these will take advantage of the rebate and they are already using private hospitals.
• Over 70% of people with incomes over $70,000 per year have private health insurance and probably would have maintained it whether a rebate existed or not.
• The Medicare agreement with the States allows for a reduction paid by the Commonwealth to the States if the number of people with private health insurance increases. So, any significant increase in the number covered by private health insurance will see less funding to the States further aggravating funding for public hospitals.
• Making the private health system more lucrative for doctors and allied health staff will drag staff away from public hospitals and into private hospitals. As a result public hospitals will be chronically under-staffed or governments will have to pay higher wages to maintain staff numbers, further putting pressure on hospital budgets. The loss of senior staff will also impact on training of junior doctors.

The private health insurance rebate is just a tax cut for the well off. The same people who will benefit most from the changes to personal income tax with the introduction of the GST and the same people who will benefit most from the changes to capital gains tax are the people who are now getting a tax rebate of $300 - 800 per year depending on membership type and the government is committed to providing a blank cheque to continue this rebate. Tax rebates reward the wealthier more as they are proportional to income.

7. The interface between private and public hospitals, privatisation of public hospitals

The DRS sees no benefit and many costs in privatising public hospitals. The experiences in Australia (Modbury, S.A. and Port Macquarie, N.S.W.) indicate that health services are no better and are usually more expensive. Purchasing services from private hospitals may help with service provision where public facilities are lacking, however in such circumstances services are usually bought on a fee for service basis, a system which usually means higher costs. The fact can not be escaped that most private hospitals are run for profit and the cost of any public purchase of health care from private providers includes a component to add to profit.

Currently, many state health departments in particular seem to have scant regard for training opportunities for health care workers. Education and training have been and should be an important part of the work of public hospitals. Failure to provide adequate training positions for medical practitioners, nursing staff and allied health staff will see serious shortages of appropriately trained staff in the intermediate future. The move to privatise some hospital services, particularly pathology and radiology removes from the public system nearly all opportunities to train the next generation of pathologists and radiologists. Despite the claims of private institutions to be committed to education their commitment rarely extends to the employment of adequate numbers of training registrars.

The overseas experience is similar but much more extensive. Thus from the United States, an editorial in the leading medical journal (the New England Journal of Medicine) recently commented `Market medicine’s dogma, that the profit motive optimises care and minimises costs, seems impervious to evidence that contradicts it. For decades, studies have shown that for-profit hospitals are 3 to 11% more expensive than not-for-profit hospitals’. The article goes on to summarise the data on the quality of care in for-profit institutions. Sadly, there is no evidence of improved outcome for the extra money, and indeed, in many studies, death rates were higher in the for-profit hospitals.

A local example that indicates the more differential in costs between public and private hospitals comes from the Department of Cardiology, Monash Medical Centre, Clayton, Victoria. Professor Richard Harper looked prospectively at 199 patients treated for heart disease by stenting and angioplasty (opening up the blood vessels) in the same cardiac laboratory over a 12-month period. There were 137 public patients and 62 private patients. The private patients were in an on site private hospital. The total costs per person were $5510 in the public hospital and $6151 in the private hospital.

The revenue the hospital obtained to fund these patients was $6355 in the public and $14050 in the private hospital. Thus the profit in the public hospital was $845 and in the private hospital $7849.

Worse is to come. The cost to the Government of the private hospital stay was $5586, consisting of $3584 due to the 30% rebate and $2002 in drug and equipment costs. Thus the private patient was costing the Government almost as much as the public patient but was also contributing $8464 from their own pocket. Is it surprising that private health insurance is expensive?

A study by Professor Jeff Richardson from the Centre for Health Program Evaluation showed that the likelihood of a private patient having a procedure like the above within 8 weeks of a heart attack was over 5 times more than for a public patient. The public patient may be being deprived of a suitable treatment or the private patient may be getting unnecessary treatment. The difference is stark and of some concern.

Thus we know that private hospitals are much more expensive, and despite doing more to patients there is no evidence that health outcomes are better.

The DRS believes that where possible, evidence should be used to guide decisions about patient treatment. However it also sees it as imperative that evidence should also guide decisions on health funding. The contrary is the case as Governments continue their attempts to emphasize and promote the private health industry which is demonstrably more expensive, less efficient, less fair, and has no better outcomes than the public system.

8. Data collection

As outlined in Section 1 of this submission, there is a desperate need for nationwide data on waiting lists and associated issues. Much of the information that should be collected which is directly relevant to waiting lists has already been addressed in detail by the Baume report A Cutting Edge, and includes inappropriate waiting times, greater than 6 month waiting times, specialty specific waiting times.

In addition, waiting times for outpatient appointments and for ancillary services are essential to adequately measure quality of service access. However what is also required is the establishment of detailed indicators of quality of service provision of which waiting times are only a part. Coupled with such indicators, clear guidelines indicating the minimum service requirements of a particular service provider would enable appropriate comparisons to be made and would enhance quality improvements.

It is important to use the information gathered in the best way possible for patients. Thus the information should be made available to referring doctors and to patients to enable them to make appropriate choices about their treatment.

The collection of hospital outcome data is currently very limited. The usefulness of such data to referring doctors and to patients is obvious. Moves to improve the quality and measurement of such information are progressing slowly and although it is important to have appropriate risk adjusted data rather than potentially very misleading raw data, it is hardly surprising that progress in this direction is slow given that data collection is a time consuming and expensive process and in two of the six states funding of public hospitals has decreased in the last six years.

9. Quality improvement programs

The Doctors Reform Society believes that quality improvement programs should be an integral part of the on-going education of all medical practitioners. Not only would good programs improve health outcomes but should also be aimed at more rational use of investigations and appropriate prescribing. Such initiatives may well be cost neutral or provide a cost saving.

As an example it would be far better for doctors to receive information on new medications from an (free thinking) independent pharmacist with a knowledge of all drugs of a particular class than from any number of pharmaceutical company representatives who come armed with information which is rarely unbiased and at times misleading and often accompanied by gifts and invitations.

Summary

The Doctors Reform Society believes that the current funding arrangements and the best functioning of public hospitals could be improved considerably by a variety of measures which are at least partly the responsibility of the Federal Government.

These include:

• Increased emphasis on improving primary health care in a co-ordinated manner so as to reduce the demand on public hospital services and improve access to healthcare and the quality of health for all Australians
• Decreased promotion and support of the inefficient, more expensive private sector to "bail out" the public sector which is demonstrably cheaper, fairer, more efficient, and at least as good with respect to outcomes.
• More transparent definitions of the responsibilities of the different Governments with respect to provision of services: these to be incorporated into the Australian Health Care Agreement.
• Provision of mechanisms for enforcement of the Australian Health Care Agreement.
• Increased collection and dissemination of information about hospital performance with respect to service provision and to outcomes.
• Renewed consideration of the recommendations of the Baume report A Cutting Edge with respect to addressing the problems of elective surgery waiting lists.

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