Paul Smith, the political editor of Australian Doctor, writes:

“Despite the consultations and the garnering of expert opinion, Kevin Rudd’s plan for a structural overhaul of the health system still looks like it was knocked together at the last minute, like a schoolboy’s Sunday night homework.

We know that primary care would be funded by a single entity: the Federal Government. But there are few clues as to who or what will organise and manage primary healthcare — the bit of the system which, once reformed, is meant to save the nation from being crushed beneath ever-expanding hospital costs.

The PM’s answers to these questions are coming in “weeks and months”, apparently. But it suggests the government isn’t doing much in the way of holistic thinking.

The state leaders in Victoria and NSW are right. What kind of judgement can you make about the virtues of what has been put on the table so far without any idea of what is going to happen in aged care, community health, community mental health services, sub-acute services, general practice and allied health?

Logic, if that is a methodology relevant in health reform, seems to dictate that divisions of general practice, once derided as “GP dinner clubs” by their critics in the health department, will be one answer.

The guess is that the government will suggest a steroid-enhanced version of divisions mutating into so-called primary healthcare organisations.

Primary Health Care Organisations (PHCOs) — as pitched by the various reform taskforces — would take on responsibility for commissioning and co-ordinating primary care services on behalf of regions with populations of between 250,000 and 500,000 people.

They would help integrate services for those with chronic and complex conditions — particularly the stuff that results in recurrent hospital admissions.

The important bit for GPs is that the government has insisted fee-for-service funding under the MBS will continue, so PHCOs won’t be attempting a wholesale takeover of general practice.

But the rest of the primary care pot, including the $4.3 billion that states spend on community health services, would be managed in whole or in part by PHCOs.

The AGPN and the divisions are trying to retain control over the policy process by writing their own blueprints for the coming revolution. There is agreement among divisions on these ideas, except, that is, when they start getting down to the most basic of practicalities, such as deciding on the new geographic boundaries. Then the disagreements start.

Another issue is that for all the talk of the wonders of their future role, the divisions as a whole have not actually done much in the way of ensuring local health systems can provide comprehensive co-ordinated care for patients most vulnerable to hospitalisation.

Even the exceptions, such as GP Partners in north Brisbane, one of the go-ahead organisations that have been running these types of programs, are honest enough to admit they have found the going tough. They were guiding some patients with not just three or four comorbidities, but often 20 or more, through a health system ridden with silos.

The silos are meant to disappear, but if the government opts for PHCOs, they will have to be a very different beast from the divisions as they are now. It is for this reason that their number, their functions, their boundaries, their accountabilities, the sorts of people who sit on their boards and act as their managers are going to be imposed from above — irrespective of what the divisions themselves think.

Beyond that, one of the big unknowns is how Rudd will tackle the disconnects between primary and secondary care.

Health reformers have long preached the benefits of getting more hospital services into the community. An expansion of out-of-hospital care — whatever its form — is where the real health system revolution lies.

In the divisions’ vision of the future, the PHCOs would be involved in this transformation to shift, however slightly, the balance of power — particularly because they would take “increasing responsibility for reconfiguration of health services” to meet the needs of community.

But, reading through Mr Rudd’s 75-page plan (much of it looks like backfill), it remains unclear who has overall responsibility for planning and organising services at a local level. Community services will be funded by the Federal Government but in some instances still run by the states. Local Hospital Networks will get funding from the Federal Government, but have contracts for services with state health departments. They will be accountable for meeting agreed national standards but we don’t know what these will be. Exactly how much genuine planning power they will be be given is one important question – especially given there can be no guarantees that the management of at least one or two of these networks won’t turn bad and end up putting local hospital services at risk.

The other more fundamental question is how the interests of these hospital networks are going to be aligned with the interests of local health services as a whole. History shows how hospitals cannibalises primary care. What governance arrangements are being drawn up to ensure the system thinks with one brain?

Last week Rudd and Roxon set off on another national tour to sell the reform package direct to the masses. I wonder whether the masses see that huge chunks of it are still missing.”

• This article first appeared in the March 19 edition of Australian Doctor

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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