Issue 16 / 12 May 2014

THE federal government should use a scalpel on the health system and not the sledgehammer suggested by the National Commission of Audit when they bring down tomorrow’s Budget, says a health policy expert. (1)

Adjunct Associate Professor Lesley Russell, from the Menzies Centre for Health Policy at the University of Sydney, said consultation with relevant stakeholders, including patient advocacy groups, was the smart way to bring about health care reform.

Professor Russell said US research detailing the benefits in mortality rates and medication compliance associated with universal health care coverage and pharmaceutical copayment subsidies clearly illustrated the value of Australia’s current health system.

In one study, published in the Annals of Internal Medicine, mortality rates were compared before and after the introduction of the Massachusetts 2006 health care reforms, which were used as a model for the US Affordable Care Act. (2)

The authors reported an association between the reforms and a significant drop in all-cause mortality compared with a control group, an absolute decrease of 8.2 deaths per 100 000 adults. Deaths from “causes amenable to health care” also decreased (–4.5%).

“Changes were larger in counties with lower household incomes and higher pre-reform uninsured rates”, the authors wrote.

The second study, published in Health Affairs, used data from the Post-Myocardial Infarction Free Rx Event and Economic Evaluation (MY-FREEE) trial to evaluate the impact of eliminating cost sharing via copayments, such as compliance with preventive medications in patients following a myocardial infarction. (3)

“Providing full coverage without cost sharing for cardiovascular medications improved adherence for all patients”, the authors wrote.

The model used by the MY-FREEE trial was similar to that of the Quality Use of Medicines Maximised in Aboriginal and Torres Strait Islander Peoples Program currently operating in Australia to make medications free for disadvantaged Indigenous patients. (4)

Professor Russell said the two US research articles showed the value in making access to appropriate preventive care easier.

“The lesson from [the research] is that if you are willing to make the investment you will get results, even inside the 3–4-year political cycle”, she said. “And, if you do it the right way you will have the biggest impact on those with the worst health status.”

She said it was surprising how quickly results could be seen. “It’s generally understood that chronic disease can take some time [to turn around] but in fact in a surprisingly short time Massachusetts has seen returns on the investment.”

Professor Russell said access plus affordability as well as coverage were really important.

“The flipside of that is how quickly things can go bad. In Greece, for example, there has been a really serious impact on mortality from both non-communicable diseases and infectious diseases as the health care system and affordability have crumbled.”

Professor Russell said the Commission of Audit advice to the government had not given much regard to the consequences. “There was no recognition given to the national benefits that accrue from having a healthy and productive population”, she said.

“They used a sledgehammer when if you want to do things smartly you need to use a scalpel and evidence-based policies.”

She said anything of value in the Commission of Audit’s report had been “tarnished” by ideological bias.

“[As a result] suggestions about reform of the Pharmaceutical Benefits Scheme that makes some sense are lost in the outrage about copayments”, she said.

“In theory, governments should lead but to do it effectively they need to base their decisions on evidence and then bring the community along with them.”


1. National Commission of Audit 2014
2. Annals of Internal Medicine 2014; 160: 585-593
3. Health Affairs 2014; 33: 5


Should maintaining a universal health care scheme in Australia be a policy priority for the federal government?
  • Yes - it's the best system (51%, 79 Votes)
  • Yes - but some change is needed (44%, 68 Votes)
  • No - should be user-pays (5%, 7 Votes)

Total Voters: 154

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One thought on “Health budget needs a scalpel

  1. Lui Pisaniello says:

    In the 1950’s the USSR directed its best and brightest to study science and engineering while in the West this cohort chose to study law or medicine. The Russians got to space first but stalled after the the premature death of Sergei Korolev, the father of their space program. Maybe if he had not spent years in the gulag or recieved better health prevention and care things may have different. He died aged 59 after years of poor health. How many more Seigei’s are out there? No society can afford to loose any life prematurely, it acts as a misery multiplier, robbing families and societies of their dreams and wealth. Chronic diseases take their toll from the forties onward; the economic golden years. Australia has the best and cheapest health care system which can only deliver more (for the same spend) as medical knowledge expodes. What a time to bail out! How does that old saying about the penny and the pound go?

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