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Article from The Australian October 24 2009 - David Penington
We need to make a bold decision to depart from the failed prescriptions of the health establishment
PUBLIC concern about Australia's hospitals mounted in the lead-up to the 2007 federal election following the disasters at Queensland's Bundaberg hospital and growing evidence of mistakes in the care of patients across the country. Kevin Rudd, then opposition leader, made a commitment that if the states did not "fix up" the public hospitals within a year the commonwealth would take them over. He proposed a review to find out what should be done.
The National Health and Hospitals Reform Commission was established in March last year, one of several reviews to settle policy for the new government.
We must now ask whether its final report, released in July, offers the answers.
Like a curate's egg it is good in parts, such as on indigenous health, dental care and preventive strategies, but in respect of public hospitals and necessarily related problems in aged care it is really bad.
Its answer is that the commonwealth should progressively take it all over with more of the same management except for increasing control from Canberra, with new agencies telling hospitals how to treat their patients.
How did we get to this impasse? There are some lessons from history.
Medibank, in 1975, was a big step forward by the Whitlam government in providing free public hospital care for all Australians, although inevitably creating a huge national monopoly, with all the inherent problems that brought. The Fraser government then attempted various revisions to curb growing costs, as experienced in every other Western country. The original model came back as Medicare under the Hawke government in 1984, with the Medibank name retained for a government-owned private insurance provider. But there was an added element from Labor health planners that gave the minister authority to control use of diagnostic tests for private patients by public hospital specialists, to curb cost increases.
A dispute with the Australian Medical Association nearly aborted Medicare's birth. It went ahead only with agreement to establish a committee of inquiry involving government and the AMA, of which I was the independent chairman. In the course of six months of public consultations across Australia with governments, health administrators and medical specialists, we gained access to the evidence.
There had been no untoward increase in using diagnostic tests in private practice from public hospitals. We concluded that any problems that could arise should, in any event, be handled by peer review in hospitals, not by the minister, a process now termed "clinical governance". Agreement was reached with both sides that for public hospitals to deliver effective medical services, there needed to be strong partnership between the medical profession and governments.
What has happened with the great public hospital monopoly since then? A mixed bag.
There have been substantial developments in some areas, with large teaching hospitals applying advances in medical research and technology, but costs have continued to rise faster than the consumer price index, as in every other country.
With a huge government monopoly, public-sector unions created disputes that brought not only higher salaries but imposed constraints on management through conditions attached to awards. The same is a feature of virtually every public-sector monopoly. Hospital chief executives expected budget overruns would lead to rising allocations year on year.
The Kennett government, elected in Victoria in 1992, inherited a state with a record level of public debt and set about a radical program of privatisation in many sectors and reducing expenditure in others.
On July 1, 1993, it introduced new controls on hospital funding, based on a US system of diagnostically related groups for the number of patients in different categories discharged each year. This was led by health academic and bureaucrat Stephen Duckett, later a member of the NHHRC.
Hospital boards were replaced by network boards, largely of businesspeople, used to managing industry against production targets and related numbers. Public expenditure was rapidly reduced by a new minister for health, Rob Knowles (also later a member of the NHHRC). Use of this powerful tool, the culture of treating hospitals like manufacturing industry, spread across Australia.
The Wran Labor government in NSW had dismissed hospital boards, with their preoccupation with quality of care, and this was followed progressively in many other states, with government bureaucrats directly regulating expenditure in hospitals against metrics comparable to the Victorian DRG system. In recent times, further key performance indicators have been added, including waiting-list numbers and emergency-room waiting times.
The NHHRC strongly supports continuation of the present manufacturing industry culture, made even worse by the imposition on all education and training, including that for medical undergraduates, of the industrial system of competencies-based education and training derived from union leader Laurie Carmichael's Australia Reconstructed report of 1987.
He and then education minister John Dawkins had sought to impose this on universities between 1991 and 1993. After two years of heated controversy, in which I was the main adversary, higher education minister Peter Baldwin commissioned a study by academic Simon Marginson and ruled that CBT would not apply to universities.
It has a valued place in enhancing escalation from unskilled employment to trades in industry (the TAFE system) but hospitals delivering the best health care for sick people are not factories, despite their managers' preoccupation with numbers.
Imposing a new health workforce agency with its CBT between medical schools and their teaching hospitals, as is proposed, would be a further damaging blow to the whole system, with long-term consequences.
A recent study, reported in The Australian on October 8, showed a dramatic increase in expenditure on administrators and their support staff in the NSW public health system, now almost $3 billion out of $7bn.
Somehow the NHHRC believes all is well and the same system should continue, controlled by Canberra and various external regulatory bodies.
Yet at Figure 1.4 of the commission's report is an international comparison of six Western nations that shows the quality of our system in 2007 falling to a low level on crucial criteria. Best care in this scaling is rated one and the worst is six. For quality of care we rate poorly at four; for getting the "right care" we rate really badly at five; "safe care" rates only four.
How, apart from these telling figures, does our hospital system meet its primary purpose, the delivery of good health care to sick people in Australia? The Bundaberg disasters were in a hospital performing well on the bureaucrats' criteria of numbers and budgets.
The same was the case at the Royal North Shore Hospital in Sydney when in 2007 a pregnant woman attended its emergency room and had a miscarriage in a toilet.
In January last year at Royal North Shore 16-year-old Vanessa Anderson died due to appalling mismanagement. The coroner stated "almost every conceivable error or omission occurred and continued to build on top of another, leading to Vanessa's death".
The subsequent review by senior counsel Peter Garling of acute-care services in NSW reported: "During the course of this inquiry, I have identified one impediment to good, safe care which infects the whole public hospital system. I liken it to the Great Schism of 1054. It is the breakdown of good working relations between clinicians and management which is very detrimental to patients. It is alienating the most skilled in the medical workforce from service in the public system."
These are systemic problems, not confined to NSW. Last year, revelations about the road trauma unit at Melbourne's Alfred Hospital, in the Victorian ombudsman's report to parliament, indicated, among other flaws, gross miscarriage of professional care. While the unit was contributing well-funded patient numbers and money to the hospital, why bother with clinical governance? The chief executive and board had no system to monitor whether what was going on was appropriate.
Do other countries face similar problems? Sadly, the "tyranny of distance" prevented consideration of these by the reform commission. In its interim report, university hospitals were regarded as an old model.
Our National Health and Medical Research Council conducted an international strategic review last year. This strongly urged that the council support further growth in clinical and translational research within university teaching hospitals to ensure that advances in research led to improved health care.
This has long been the pattern in university hospitals in the US, Germany and Sweden and more recently has been associated with great advances in public hospital services in Finland, The Netherlands, Belgium and Singapore.
In Britain, substantial improvements were made in primary care and in rescuing the system from dependence on Bangladeshi, Pakistani, Middle Eastern and even West Indian doctors and nurses, through renovating professional education. These followed intervention over the health authorities by Gordon Brown as chancellor of the exchequer.
By 2005, however, public hospitals were judged to have fallen seriously behind international standards and were subject to trenchant media criticism.
Brown first appointed a director of research for the National Health Service. Clinical research was reinvigorated, with redirection of funds. However, performance of the cumbersome national system, controlled by endless administrative rules and protocols, continued to be vigorously criticised by academic leaders.
Brown then invited one of the most vocal critics, a brilliant professor of surgery, Ara Darzi, to meet him. Darzi was astonished to find himself invited to become a lord so that he could be appointed to the Health Ministry to review the entire NHS.
The Darzi final report emphasises two critical principles. One is to link the culture of testing with quality of services, inherent in the clinical research of the medical schools in their teaching hospitals. This culture is also vital for good medical education that safeguards the quality of future doctors.
The other principle is that all administration must be in partnership with clinical practitioners, so that resource allocation and management is guided towards achieving the best outcomes for sick people, not just satisfying the demands or rules of bureaucrats.
Britain's NHS hospitals are now grouped across the country with faculties of medicine in leadership roles, with clinical partnership at every level accompanying management. It has transformed, in just two to three years, the quality of services without additional cost. Indeed, the new system is reducing costs with better allocation of resources.
The NHHRC's table of international comparisons shows that, by 2007, the British system was ranked the best of the six nations, with quality of care ranked one, compared with Australia's four; choice of "right care" ranked two, compared with our five (nearly the worst possible); and "safe care" ranked two compared with our four. Surely we must learn from this rather than sticking with the failed prescriptions of the 1980s and 90s.
Rudd was commendably committed to seeking advice before making decisions on coming into government.
Even now he says he will give careful thought to the NHHRC recommendations and consult before advising the Council of Australian Governments in the first week of December.
In my view, the Rudd government performed brilliantly in decisive handling the international financial crisis in September last year following urgently gained economic advice. We need to make a bold decision to depart from the failed prescriptions of the health establishment, which includes an army of advisers committed to the status quo.
Just as Brown did in Britain, government must be willing to make real change rather than adjusting the system at the edges to keep it limping along.
With the support of a senior academic clinical leader from every mainland state in Australia, I have forwarded to Rudd a plan drawing on this international experience using, as Britain has, the outstanding resources of our medical schools to turn around the quality of Australian health care.
We would group hospitals and primary care (such as GP clinics, supported by neighbourhood pharmacies) together in a series of regional clusters linked with faculties of medicine and health sciences, in which quality of care will become a foremost commitment at every level, linked with preventive strategies, education and training and appropriate clinical research and evaluation.
It could all be done at minimal cost and ready to roll by July 1 next year.
In due course, aged care should also be integrated with the clusters.
As the Prime Minister recently stated, there is a need for public debate about issues relating to public hospitals.
David Penington is a senior fellow of the Grattan Institute and a former dean of medicine and vice-chancellor of the University of Melbourne. He led the Hawke government's AIDS task force.
Full details of the plan: www.grattaninstitute.edu.au/publications.html
