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Tackling health waste is about more than ‘a few bad apples’

Dr Tony Webber, a GP who until recently headed the Medicare watchdog, the Professional Services Review, has kick-started a long overdue debate, about waste in health spending.

In an article in The Medical Journal of Australia, Webber estimates that $2-3 billion dollars are wasted annually through misuse of the Medicare Benefits Schedule, Pharmaceutical Benefits Scheme and the Medicare Safety Net. For this he blames poor public policy (for example, he calls the Medicare Safety Net “one of the most poorly thought-through pieces of health legislation”) and the practices of a “minority of unscrupulous and greedy practitioners”.

General practice management plans, team care arrangements, obstetricians, ophthalmologists, gastroenterologists and cardiologists receive particular mention as being involved in inappropriate use of public funds.

There is also a jab at the health bureaucracies. Webber says his efforts to tell the Department of Health and Ageing (DOHA) about cost shifting between the states and federal government fell on deaf ears, despite it being against provisions in the Council of Australian Governments National Health Care Agreement. “When this was pointed out to officers in the DoHA, I was told not to say anything,” Webber writes.

Predictably enough, the AMA and federal government have been pouring buckets of cold water on to the media fire ignited by Webber’s article.

Rather than being dampened, however, this is a conversation that deserves to be made far more wide-ranging. Some media reports have focused on concerns about a few “bad apples”. This focus is too narrow, for a few reasons.

First, what some might call “rorts”, others might call a rational business response to policy-driven incentives. As the adage goes, every system is perfectly designed to produce the results that it does.

Too often we seem to forget in debates about our mythical “health system” that much healthcare is provided by private interests, whether private practitioners or companies. Indeed, one of DoHA’s goals, as reported in its annual reports, is to support “affordable quality private health care”. It should not be at all surprising that financial imperatives influence how services are delivered as well as professional practice.

Another reason for broadening the discussion beyond “bad apples” is that waste takes many forms. One area deserving systematic attention is the use of unnecessary or inappropriate tests and treatments.

For those who doubt the extent of these problems, see this new Croakey project, Naked Doctor, which is a measure of the growing interest internationally in over-diagnosis and over-treatment. It is a project of Dr Justin Coleman, a GP who works in Aboriginal and Torres Strait Islander health in Brisbane and is president of the Australasian Medical Writers Association.

Webber highlights a lack of systematic policy efforts to tackle inappropriate spending. I have previously suggested at Crikey that a far-sighted minister or government might set up The Less is More Institute to identify and advocate for initiatives to reduce the use of health services that are unnecessary, harmful or not good value. This is not simply about the bottom line, but also is important for equity and patient safety (the Institute of Medicine in the US has identified overuse as one of three critical dimensions to patient safety, the others being underuse and misuse).

It is also about maximising population health. Indeed, a senior health service manager, Dr Patrick Bolton, a national councillor of the Australian Healthcare and Hospitals Association, recently asked whether we might get better health returns from disinvesting in healthcare in order to be able to invest more in areas such as tackling global warming or in promoting greater equity.

Then there is the waste caused by overly onerous red tape, a particular problem for indigenous health services, as highlighted by Judith Dwyer and colleagues in The Overburden Report: Contracting for Indigenous Health Services report.

There is the waste caused by inflexible work practices and resistance to workplace reforms, as is so well illustrated by our seeming incapacity to make effective use of the physician assistant role.

There is the waste of a system that too often burns out those well-intentioned professionals, managers and others trying to do the right thing in the face of complex, inflexible systems.

There is no one party or “bad apple” to blame for waste. Adelaide surgeon professor Guy Maddern has also described waste caused by no-show patients at outpatient clinics and says, “worse still, failure to attend for elective surgical procedures is a scandal which receives little publicity”.

When I see how the digital revolution is creating greater productivity, innovation and transparency in my own industry (while also damaging business models and creating uncertainty and insecurity), I wonder how much longer the health industry can avoid the crunch that surely is heading its way.

If the digital revolution can fell a dictator such as Hosni Mubarak, then surely it also has the potential to bring some much-needed changes in the health sector.

45
  • 1
    Suzanne Blake
    Posted Tuesday, 17 January 2012 at 1:19 pm | Permalink

    Does the medicare waste exceed the Swan / Gillard waste?

  • 2
    Stiofan
    Posted Tuesday, 17 January 2012 at 1:24 pm | Permalink

    A few weeks ago my wife had to attend outpatients at our local capital city hospital (Hospital A), with a painful but not life-threatening condition (out of hours).

    She provided samples, was examined, was prescribed antibiotics and was sent on her way.

    Two weeks later, on holiday, the condition recurred. We went to the local hospital (Hospital B). The examining doctor rang Hospital A to find out the results of the tests on the samples she had provided at Hospital A.

    Hospital A had no record of the tests, or even of my wife having attended there.

    Two weeks later, at home the condition flares up again. Back to Hospital A for another examination and more samples. The results are to be sent to the wife’s GP.

    A week or so later, my wife gets to see her GP. The GP claims not to have received the results from the second visit to Hospital A.

    I know it’s just one small anecdote, but it severely dented our faith in basic competence of the health system. On both occasions when we went to Hospital A, outpatients was practically deserted, so it’s not as though the staff there were being run off their feet.

  • 3
    Filth Dimension
    Posted Tuesday, 17 January 2012 at 1:29 pm | Permalink

    FFS! piss off SB.

  • 4
    outside left
    Posted Tuesday, 17 January 2012 at 1:43 pm | Permalink

    second that

  • 5
    Jimmy
    Posted Tuesday, 17 January 2012 at 1:54 pm | Permalink

    Stiofan - It is one of the big problems, my 2 year old recently got referred down to the RCH for a biopsy, the registrar rang us that night with the results (about 6.30) but when my wife went to the paediatrician who referred us 3 weeks later he had not received the results and relied on my wife to relay the info.

    Hopefully moving to a e health system will fix both our problems.

    As a rural resident I also hope we can move towards morevideo consultation with specialists from a GP’s office which would save hours of driving just to discuss results of previous surgery or tests.

    Also I vote in favour of Filth’s motion.

  • 6
    Jimmy
    Posted Tuesday, 17 January 2012 at 1:55 pm | Permalink

    Stiofan - It is one of the big problems, my 2 year old recently got referred down to the RCH for a biopsy, the registrar rang us that night with the results (about 6.30) but when my wife went to the paediatrician who referred us 3 weeks later he had not received the results and relied on my wife to relay the info.

    Hopefully moving to a e health system will fix both our problems.

    As a rural resident I also hope we can move towards morevideo consultation with specialists from a GP’s office which would save hours of driving just to discuss results of previous surgery or tests.

  • 7
    Bultaco Metrella
    Posted Tuesday, 17 January 2012 at 2:39 pm | Permalink

    third

  • 8
    Joanna
    Posted Tuesday, 17 January 2012 at 3:04 pm | Permalink

    I think you have to take care with the ‘over diagnosis’ argument, which is a bit simplistic. It would be better to mount a case for improving diagnostic skills, and encouraging medical staff, especially in emergency, to proceed without prejudice.
    Last May my daughter presented at hospital emergency with what appeared to be (according to the doctor who treated her) symptoms for the onset of schizophrenia. Because we (her family) were adamant that there was no psychiatric history, nor any chance of drug use, the hospital investigated physical causes. Our concern was finally recognised as legitimate when she had a seizure in the emergency room. After days of exhaustive tests (all proving negative), and with her physical condition deteriorating, one of the specialists suggested investigating the possibility of an extremely rare and only recently identified disease – Anti-NMDA Receptor Encephalitis, which is terrible but curable. The test came back positive. She was appropriately treated and is now recovered. Maybe if we had accepted the wisdom of the first diagnosis and had not insisted on every possible test until her disease was identified, they would have eventually made the correct diagnosis. But all the available literature on this (and longitudinal studies are only now being published for the first time) indicates that the best chance of avoiding long term cognitive loss is swift diagnosis and treatment. Patients with this who are misdiagnosed and sent to psychiatric hospitals for some months don’t fare so well: some die, some have permanent brain damage, others have long term cognitive loss.

  • 9
    ggm
    Posted Tuesday, 17 January 2012 at 3:12 pm | Permalink

    If only we had unified patient records and some kind of smart card…

  • 10
    David Allen
    Posted Tuesday, 17 January 2012 at 3:14 pm | Permalink

    Yes, I was rather hoping Suzanne would get a new record for Christmas. Alas, the whine continues.

  • 11
    michael
    Posted Tuesday, 17 January 2012 at 3:22 pm | Permalink

    Dr Webber’s claims of Medicare overclaiming, waste and abuse of care plans are derived from his own interpretations of anecdotal reports. How about some analysis of Medicare service use/misuse based on good evidence?
    And is the waste of healthcare dollars from alleged overuse of GP care plans any worse than the waste of funding allocated to unproven phone advice lines, Early Intervention centres and Super Clinics in overserviced suburbs?
    Australia could use a NICE-style agency to evaluate the cost effectiveness of ALL medical programs and Medicare items in the same way that the PBAC evaluates new drugs for the PBS.

  • 12
    john2066
    Posted Tuesday, 17 January 2012 at 3:30 pm | Permalink

    Get rid of the specialists cartel - where the specialists control the numbers coming through the colleges, to keep their own outrageous incomes high. All so a obstetrician or dermatologist can continue banking 500k plus a year.

    Its really amusing the number of coalition supporters who hate unions, but love the AMA and the surgeons - australia’s most greedy and powerful union.

  • 13
    john2066
    Posted Tuesday, 17 January 2012 at 3:35 pm | Permalink

    Just let universities offer specialist training, instead of this sham run by the closed shop. Conservative voters/thinktanks - where are you? A union runs a closed shop and is taking millions out of the health budget - where’s the outrage guys?

  • 14
    Scott
    Posted Tuesday, 17 January 2012 at 3:46 pm | Permalink

    the Institute of Medicine in the US has identified overuse as one of three critical dimensions to patient safety, the others being underuse and misuse”

    Since that pretty much covers all uses, surely that is one for Captain obvious.

    As for waste, well it’s the public system. When you don’t put a price on something, people don’t value it, hence there is waste. Increase the gap payments, especially in the pathology world and you might get some better results in regards to outcomes for your buck.

    But then again, is it all about the economics? Is waste of 2-3 billion a year (on a health budget of $50 billion, so around 4-6%) worth the improved patient outcomes of early diagnosis and quality care in hospitals? Will the government get it back in increased tax receipts as people are able to live longer and increase their workplace participation? I think so.

  • 15
    Stiofan
    Posted Tuesday, 17 January 2012 at 4:06 pm | Permalink

    @Scott
    I doubt that increasing the gap would reduce much waste, since there’d inevitably be an exception for “low-income earners”.

    BTW One obvious rort is the “referral to a specialist”. I’ve been seeing the same specialist for 25 years, at three-yearly intervals. That means that I have to go to my GP every three years to get a referral which is, in practical terms, useless.

  • 16
    Scott
    Posted Tuesday, 17 January 2012 at 4:33 pm | Permalink

    @Jimmy
    While I am sympathetic to your run ins with the health system, one of my real bugbears is the fact that people seem to just want to rely on the government/health system to look after their own families health.

    My Rule of thumb when dealing with Health Practitioners of all kinds, especially in the public system. “No one cares about you or your families health more than you do”.

    That means you don’t assume the system works. You double check, confirm, agitate, charm, plead, beg, bully, what ever it takes to ensure that the health system is looking after you and yours.

    E-records aren’t going to help. You don’t think that these records will get lost, delayed, deleted accidently, corrupted due to system crashes etc? I used to work in Database administration for a large corporate and I can tell you, it’s not fool proof.

    The only answer is to take responsibility and stay on it.

  • 17
    Jimmy
    Posted Tuesday, 17 January 2012 at 4:56 pm | Permalink

    Stofan - I got a referral to a specialist that by the time I could get an appointment with the specialist had expired, fortunately the spacialist was gracious enough to make an exception so I did n’t have to go back to the GP closer to the spcialist appointment.

  • 18
    Kez
    Posted Tuesday, 17 January 2012 at 5:02 pm | Permalink

    John2066 you might be right that there’s something of a closed shop among some medical specialties. But it’s rare if not impossible for most of them to bank anything like 500k a year. Perhaps some earn that amount gross (although I doubt it), but then they have at least 100k in insurance to pay, and heaps of other costs.

    It’s funny how we value ‘liberty’ more than health and are prepared to have some lawyers running around on two MILLION plus a year while whingeing about doctors’ incomes.

  • 19
    john2066
    Posted Tuesday, 17 January 2012 at 5:11 pm | Permalink

    Kez, if anything 500k is a bit low. There were reports of the average obstetrician taking 2 million out from medicare alone yearly. And this hoary old myth about ‘doctors overheads’ needs to be put out of its misery - mostly operate on facilities provided by others.

    There is no other word for it, the multimillionaire specialists are bilking us, pure and simple. Where is the right wing outrage against this closed shop union?

  • 20
    sparky
    Posted Tuesday, 17 January 2012 at 5:22 pm | Permalink

    Biggest rort in my world are care plans, some practices I know of employ nurses to go out to the patients, write the care-plan and the GP signs off. Biggest over diagnosis- depression.

  • 21
    Hugh (Charlie) McColl
    Posted Tuesday, 17 January 2012 at 6:29 pm | Permalink

    Sparky, if you are an actual GP it might be reasonable for you to “know” that practice nurses diagnose depression and the GP signs off back at the office and therefore it’s a ‘rort’. But if you are simply an opinionista with your own ‘facts’ what is your evidence? Or doesn’t that matter?

  • 22
    JMNO
    Posted Tuesday, 17 January 2012 at 6:31 pm | Permalink

    When we lived in the UK quite a number of years ago, local medical practices were funded for the costs of servicing a particular number of patients, can’t remember whether it was patients on the books or local demographics. Wouldn’t this be a better approach than fee for service, which encourages doctors to give more services than may be necessary?

  • 23
    Melissa Sweet
    Posted Tuesday, 17 January 2012 at 7:33 pm | Permalink

    PostScript to the story: I had asked Naked Doctor’s author, Dr Justin Coleman, for comment for this piece, but his response arrived after I had filed it to Crikey. Here it is now:

    Dr Justin Coleman:

    Departing boss of the US Medicare and Medicaid system, Dr Donald Berwick, lists ‘overtreatment’ as the first of five reasons for the very high 20-30 percent of US health spending he calls waste that yields no benefit to patients.

    The most relevant quote from this hyperlinked New York Times article is

    The official in charge of Medicare and Medicaid for the last 17 months says that 20 percent to 30 percent of health spending is “waste” that yields no benefit to patients, and that some of the needless spending is a result of onerous, archaic regulations enforced by his agency.

    “Much is done that does not help patients at all,” Dr. Berwick said, “and many physicians know it.”

  • 24
    Lord Barry Bonkton
    Posted Tuesday, 17 January 2012 at 7:41 pm | Permalink

    Filth , another vote for your motion. S.b , its getting tiring listening to the same tripe over and over again. Just repeating Liberal Lies don’t make it true, might work in the Daily terror or the Hun punters , by us Crikey readers are a bit smarter and don’t just swallow your crap. GO BACK TO WHERE YOU BELONG, under your rock.

  • 25
    sparky
    Posted Tuesday, 17 January 2012 at 8:28 pm | Permalink

    @ Hugh, the GP is responsible (for the creation of) the care plan, that’s why it’s a billable. My evidence would be the RACGP & Medicare. Or should I accuse you of opinionista leanings?

  • 26
    chazzai
    Posted Tuesday, 17 January 2012 at 8:30 pm | Permalink

    When I see how the digital revolution is creating greater productivity, innovation and transparency in my own industry (while also damaging business models and creating uncertainty and insecurity), I wonder how much longer the health industry can avoid the crunch that surely is heading its way.”

    Yup. And when it hits, there’s gonna be fireworks.

  • 27
    AR
    Posted Tuesday, 17 January 2012 at 8:34 pm | Permalink

    The iatrogenic rate is STB 30% which is probably an underestimate.

  • 28
    ZA
    Posted Tuesday, 17 January 2012 at 11:10 pm | Permalink

    @Stiofan, Jimmy and Scott

    I would suggest you always keep your copy of *any* health documents, like test results, summaries, notes, referrals, information, xrays, etc. Also, its more handy if you scan it into a electronic copy you can keep anywhere, e.g. PC, Thumb Drive, Smart phone, even in the ‘Cloud’/hosted service if you feel its secure enough, yet want it accessible. Plus it can be easily backed up multiple times.

  • 29
    Joanna
    Posted Tuesday, 17 January 2012 at 11:37 pm | Permalink

    @Stiofan, Jimmy, Scott and ZA
    When in hospital it’s also vital to have friends/relatives stay with acutely ill patients around the clock. Except in intensive care or high dependency units, most hospitals just don’t have the resources to make sure that patients eat, or notice when their blood pressure/temperature suddenly goes through the roof , or they are massively dehydrated.

  • 30
    john2066
    Posted Wednesday, 18 January 2012 at 12:09 am | Permalink

    Greedy medical specialists who restrict numbers to keep their disgusting incomes high are living proof that not all medical parasites exist at the microscopic level.

  • 31
    Jimmy
    Posted Wednesday, 18 January 2012 at 9:00 am | Permalink

    Scott - “While I am sympathetic to your run ins with the health system, one of my real bugbears is the fact that people seem to just want to rely on the government/health system to look after their own families health.” I have private health insurance but in the regional town I live in the private hospital does not perform many of the functions necessary hence having to use the public system.

    And as for the sentiment that you and others have expressed that we can not rely on the system and therefore need to take matters into our own hands that may well be true but is it really what we have to settle for, should we not be wanting/demanding something better?

    And e records may not “solve” the problem but they have to be a step forward from the system we have now, especially as it is increasomgly difficult to attend the same GP practice as (at least here in rural victoria) often get told there is a two week wait to see a doctor and therefore have to “shop around” to get into a GP.

  • 32
    William
    Posted Wednesday, 18 January 2012 at 9:08 am | Permalink

    This discussion (particularly those of John2066) has become pretty offensive but anyway…

    Melissa, I would like to share your optimism that this article in the MJA would ultimately actually lead to a meaningful reduction in waste in the health service but I sincerely doubt that it will.

    I have read, and reread, Webber’s piece and frankly it is poorly written and lacks direction. What evidence he offers is unsubstantiated; for example, where exactly does his estimate of $2-3bn actually come from? Finally, and perhaps most disappointingly, despite all of this he offers not one grain of a suggestion as to a solution.

    I don’t think anyone really believes that the Medicare system is perfect but it is the system that we have been given to operate within. As many others have been quick to point out, sitting in the chair of the committee that investigates the worst abuses of the system is perhaps not the best vantage point to make an objective assessment of it as a whole.

    Although I am sure that Dr Webber chaired the PSR for such a long time for all the right reasons (some might question the motive though) it seems that this piece will ultimately be seen for what it is; the last twitches of a disillusioned public servant as he slides off back into the obscurity of general practice. Frankly, I’m a bit surprised that the MJA even published it.

    Conflicts of interest: Too many to mention, but fundamentally I am a cardiologist. And John2066 I’d love to respond to your equally unsubstantiated comments but I just have to go off and count all my money.

  • 33
    GocomSys
    Posted Wednesday, 18 January 2012 at 10:57 am | Permalink

    Sixth - SB - Go away!

  • 34
    Jimmy
    Posted Wednesday, 18 January 2012 at 11:51 am | Permalink

    Scott - “While I am sympathetic to your run ins with the health system, one of my real bugbears is the fact that people seem to just want to rely on the government/health system to look after their own families health.” I have private health insurance but in the regional town I live in the private hospital does not perform many of the functions necessary hence having to use the public system.

    And as for the sentiment that you and others have expressed that we can not trust on the system and therefore need to take matters into our own hands that may well be true but is it really what we have to settle for, should we not be wanting/demanding something better?

    And e records may not “solve” the problem but they have to be a step forward from the system we have now, especially as it is increasomgly difficult to attend the same GP practice as (at least here in rural victoria) often get told there is a two week wait to see a doctor and therefore have to “shop around” to get into a GP.

  • 35
    john2066
    Posted Wednesday, 18 January 2012 at 12:07 pm | Permalink

    William, do or do not medical specialists control the number of trainees entering their fields?

  • 36
    The Pav
    Posted Wednesday, 18 January 2012 at 12:35 pm | Permalink

    Dear Suzanne Blake,

    Sigh………….A New Year but you remain as obstinately stupid and partisan as ever.

    If you accept the report then you must accept the statement” he calls the Medicare Safety Net “one of the most poorly thought-through pieces of health legislation”)”

    From memory the Health Minister……………Tony Abbott
    the Prime Minister ………….. John Howard
    the Treasurer …………….Peter Costello

    Yet another nail in the coffin that the previous Liberal Govt was competent.

    Thank you for giving me an opportunity to highlight this

  • 37
    Suzanne Blake
    Posted Wednesday, 18 January 2012 at 12:48 pm | Permalink

    @ The Pav

    Except Medicare was setup by Labor Governments?

  • 38
    Jimmy
    Posted Wednesday, 18 January 2012 at 1:08 pm | Permalink

    SB - Is your argument that Medicare itself is a bad thing?

    And are you also arguing that as an ALP govt introduced medicare any subsequent changes or adaptation rest with the ALP? And if would you then argue that the party that introduced income tax way back in 1915 is responsible for any cuts, increases or changes in general since?

  • 39
    Suzanne Blake
    Posted Wednesday, 18 January 2012 at 1:26 pm | Permalink

    @ Jimmy

    Medicare is a good thing, would be lost without it.

  • 40
    Filth Dimension
    Posted Wednesday, 18 January 2012 at 1:28 pm | Permalink

    troll.

  • 41
    Jimmy
    Posted Wednesday, 18 January 2012 at 1:33 pm | Permalink

    SB - “Medicare is a good thing, would be lost without it.” So what was your point with this;

    ”@ The Pav
    Except Medicare was setup by Labor Governments?”

    You really should stay on your medication.

  • 42
    Suzanne Blake
    Posted Wednesday, 18 January 2012 at 2:01 pm | Permalink

    @ Jimmy

    I was wondering of the waste at Medicare was worse than incompetent Swans or ly ing Gillards waste.

    Also interesting that Crik ey has dont done a piece on ly ing Gillards Pokie backflip, what a fool Wilkie was to believe her word and handshake and agreement.

  • 43
    William
    Posted Wednesday, 18 January 2012 at 2:07 pm | Permalink

    John2066…

    William, do or do not medical specialists control the number of trainees entering their fields?’

    No, not really. There has been no restriction on the growth in the number of cardiology trainees in Brisbane in the last 10 years. As a consequence the number has grown uncontrollably. Now they are all worried what they are going to be doing in 5 years time. At our hospital we’d dearly love to train a few more registrars each year but the constraint is th hospitals budget to appoint staff.

    So, frankly John you are just wrong.

    And in any case even if you were right would that justify…

    Greedy medical specialists who restrict numbers to keep their disgusting incomes high are living proof that not all medical parasites exist at the microscopic level’

    I think you should try and regain some balance here. A chip on your other shoulder might help…

  • 44
    Jimmy
    Posted Wednesday, 18 January 2012 at 2:18 pm | Permalink

    SB - ” was wondering of the waste at Medicare was worse than incompetent Swans or ly ing Gillards waste.” And pointing out that Medicare was set up by a Labor govt about 30 years ago demonstrates that point how?

  • 45
    The Pav
    Posted Wednesday, 18 January 2012 at 4:55 pm | Permalink

    Dear Suzanne Blake

    Your

    Re @ Jimmy

    I was wondering of the waste at Medicare was worse than incompetent Swans or ly ing Gillards waste.

    Also interesting that Crik ey has dont done a piece on ly ing Gillards Pokie backflip, what a fool Wilkie was to believe her word and handshake and agreement.”

    I see the Abbott, Costello & Howard stuff things up but somehow in your twisted world it is Swan & Gillard’s fault. Your delusional stance just validates all those who regard you as something less than sane

    You said you would be lost without Medicare………Hmmmmmmmmmm……….I think you irrationality is a clear sign that the treatment you’re getting isn’t working. I can on;y hope that the new mental health initiatives help you.

    As to the pokies . iam sure that Crikey will get to it in a timely fashion

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