19/03/2014 - 11:28

Urgent need for healthcare reform

19/03/2014 - 11:28


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Australians need to have a positive discussion on how we are going to meet our future healthcare needs.

Urgent need for healthcare reform
QUICK JAB: There is a greater role for pharmacies in the provision of primary healthcare. Photo: iStockphoto

Australians need to have a positive discussion on how we are going to meet our future healthcare needs.

Primary healthcare is a hot-button political and social issue, with GP shortages, rising costs, PBS reforms and Medicare overhauls front-of-mind for many Australians, particularly considering our aging population.

Not only is the existing aging population an issue, but we are also living longer as a nation and this will require ongoing/increased healthcare solutions.

So where is the care going to come from and, more importantly, who is going to pay?

Before suggesting a solution, first consider a couple of examples that may give a clue as to this brave new world.

Britain is well known for its National Health Scheme, which works on the premise that you have a modest amount taken from your pay or income monthly for life by way of contribution. This would go towards a nationally funded scheme that looks after the health of you and your family forever. It provides for dentists, GPs and hospital treatment and assists with pharmaceutical purchase costs; however this system is becoming more limited and means-tested to a degree.

The reality is that although those payments come out, to achieve anything resembling a reasonable and speedy level of health care you need to have private health insurance. Doctors are in short demand and there are long waiting lists for both simple and complicated procedures – and this is with private cover.

Under Britain’s NHS, people can be waiting years for suitable treatment, sometimes with fatal results.

The bureaucracy has become so bad that Boots, one of Britain’s largest and most recognised pharmacy chains, decided it was no longer viable to rely solely on payments from the government. It also recognised that there was a pent-up demand for affordable primary healthcare solutions and services, and that Boots was well placed to provide it.

Boots embarked on a process of identifying certain primary healthcare services where the user paid a fee, and also expanded the front-of-shop retail and cosmetics ranges. Some of these services received rebates and payments from health insurers who recognised the value of the initiative as a way of meeting the needs of their customers in a market already stretched to breaking point.

Similarly, in America the term ‘user pays’ has almost become part of the local vernacular. Only recently with the introduction of ObamaCare has there been a medium by which people can gain different levels of health cover. Services are offered in clinics and some pharmacies, and the user may or may not receive a rebate or reimbursement from their insurer.

The benefit of the user pays system is that it should produce an environment where suppliers and service providers must provide a cost-effective solution, tailored to their customer or patient, that meets all of their needs. If they don’t, then they are unable to justify the cost – simple supply-and-demand economics.

I have long argued that businesses built solely on the basis that their services are free or heavily subsidised are unlikely to focus on justifying their service or product.     

I also believe the user pays model works towards a real solution in which government payments are no longer relied upon, and growth and innovation can be planned and executed within the norms of sound business management principles.

So where does that leave Australia?

I believe there are two key areas that need to be addressed as a matter of urgency.

Firstly, let’s examine the availability of primary healthcare and the funding model required to achieve our needs into the future.

While I understand the long-term planning and cost required to establish a hospital, I believe there are other ways to ease the pressure on our health providers while maintaining Australia’s enviable record of quality healthcare.

Pharmacists are highly trained and experienced primary healthcare providers and located conveniently throughout regional and metro Australia. They have a massive capacity to provide additional health services required within the community, and many already provide some of these services. Hearing checks, repeat prescriptions, cholesterol testing, blood pressure monitoring, vaccinations, medication reviews, weight loss, diabetes management etc, should all be available in pharmacies.

It is all about wellbeing and preventative medicine, not simply providing cures or relieving symptoms of an existing disease or condition. By encouraging further expansion of the services offered by pharmacy it will free up the time of the overstretched GPs and allow them to complete higher-level consultations.

It may even allow more procedures to be completed in a doctor’s surgery rather than requiring a visit to hospital.

Secondly, in relation to funding, I believe we need a thorough review of the current Medicare system in line with a review of the medical insurers. As with PBS reform, we need to continue to drive innovation while fine-tuning the quality and availability of all healthcare solutions. The current tax incentives may not go far enough and the lines of communication between organisations such as Medicare, private health insurers, pharmacists, GPs and the like are blurred.

We must start to adopt a more divergent approach in regard to the cost and provision of this essential resource. The one-size-fits-all system doesn’t work in Britain and the US version is similarly flawed.

We need to think further outside the box.

Paul Rowe is managing director of The Business Squad. He specialised in pharmacy and healthcare for 18 years, founding national consulting firm (to pharmacy in particular) NetFin in 1999. He wrote the inaugural business management course for (masters in pharmacy), and is a senior lecturer at, the UWA School of Medicine.


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