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Govt adviser calls for public hospitals to be ‘contestable’

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Mortality rates and treatment outcomes for individual hospitals and medical practitioners could be made publicly available and patients given a choice of hospital and specialist under Productivity Commission proposals to improve the quality and accessibility of health services.

In the preliminary findings of a review initiated by Treasurer Scott Morrison into options for increased competition and consumer choice in the $300 billion human services sector, the Commission has proposed increased information disclosure by hospitals and practitioners and greater contestability between services.

“Greater competition, contestability and informed user choice could improve outcomes in many human services,” the PC said. “Well-designed reform, underpinned by strong government stewardship, could improve the quality of services, increase access…and help people have a greater say over the services they use and who provides them.”

Mr Morrison said he had ordered the review to improve the efficiency and cost effectiveness of human services.

But Opposition leader Bill Shorten, reprising Labor’s scare campaign during the Federal election on the privatisation of Medicare, said he feared it would be used to justify the wholesale handover of human services to the private sector.

“We’ve all seen this move before,” Mr Shorten said. “When Malcolm Turnbull and the Liberal Party start talking about changing human services it means that poor people get it in the neck.”

The Commission said that not all human services were amenable to increased competition, contestability and choice, but identified public hospitals and palliative care services among six priority areas targeted for reform.

While Australian public hospitals performed well by international standards, “there is scope to improve”, the PC said, including by matching domestic best practice and publicly disclosing more information.

“Public patients are often given little or no choice over who treats them or where. Overseas experience indicates that, when hospital patients are able to plan services in advance and access useful information to compare providers (doctors and hospitals), user choice can lead to improved service quality and efficiency,” the PC said.

It said that any reforms to boost user choice would have to be supported by “user-oriented information”, and suggested the English model in which increased choice is offered at the point where GPs refer patients to a specialist.

The Commission said experience in England had shown that patients given a choice of hospital and consultant-led team sought out better performing providers, and hospitals in locations where competition was most intense recorded the biggest improvements in service quality.

In order to exercise their choice, patients had access to web-based information enabling them to compare providers according to waiting times and mortality rates, and could use an online booking service.

The enormous variety of Australia’s public hospitals, including big differences in the populations they serve, workforce arrangements and characteristics and the complexity of their links to the rest of the health system, militate against like-for-like competition – something the Commission admitted.

If such issues or political considerations made fostering direct competition unfeasible, the Commission instead suggested exerting pressure for improved performance by making the position of senior hospital managers more precarious.

“There have been difficulties in the past commissioning non-government providers, and lessons from these attempts should not be forgotten,” it said. “As a result, it may be more feasible to implement contestability as a more transparent mechanism to replace an underperforming public hospital’s management team (or board of the local health network) rather than switch to a non-government provider.”

The Commission said State and Territory governments could also take a more contestable approach to commissioning services when renegotiating service agreements with local health networks.

On palliative care, the PC lamented that a dearth of comprehensive, publicly available national data hampered accountability and helped drive big differences in the quality and range of services available.

It said there was little evidence that low quality providers were being held to account.

The PC acknowledged that the “emotionally taxing and psychologically distressing” environment in which a person was approaching the end of their life militated against making choices about palliative care.

“Taboos about discussing death can prevent this from happening,” the Commission said. “Patients often rely on medical professionals to initiate conversations about palliative care, many of whom are inadequately trained about, and intimidated by, holding such conversations.”

Notwithstanding such challenges, the PC argued that introducing greater competition, contestability and user choice in palliative care would improve outcomes and reduce current substantial variation in the quality of, and access to, services in different areas of the country.

To achieve this, though, “would require careful design to ensure that the interests of patients and their families are well served. Special measures for consumer protection may be needed”.

Indeed, even where reform ushered in greater competition and contestability, the PC said the unique nature of human services meant the Government would need to maintain strong oversight.

“Government stewardship is critical,” the agency said. “This includes ensuring human services meet standards of quality, suitability and accessibility, giving people the support they need to make choices, ensuring the appropriate consumer safeguards are in place, and encouraging and adopting ongoing improvements to service provision.”

Other priority areas of human services nominated by the Commission for increased competition and contestability included public dental services, social housing, services in remote Indigenous communities and grant-based family and community services.

Among those areas assessed for reform but not identified as a priority by the PC at this stage were general practice, primary health networks (PHNs), mental health services, community health services and child and family health services.

The preliminary report is open for submissions until 27 October, and the Commission is due to deliver its final report by October 2017.

 Adrian Rollins