From Australia to England: the health care reform challenge

Blog post

Published: 30/08/2012

As the 2012 Olympics opened on a summer’s evening in London, I was taking part in a breakfast debate on a (warm) winter's morning at an international conference of primary health care organisations in Australia.

The first question posed was: 'would Australia have put its public Medicare system centre-stage in an Olympic opening ceremony?'

The answer was a resounding 'no' and we agreed that there is something unique about the British people's attachment to the NHS that is deeply woven into the fabric of society. Some of the reasons for this become apparent if you read the Nuffield Trust's new timeline of NHS policy development since the Second World War.

By contrast, Australian colleagues concluded that their health care system, although largely funded from public sources and a high performer in international terms, was regarded by the public as one of a number of important welfare services about which there was constant scrutiny, healthy debate and calls for improvement.

What unites the English NHS and the Australian health care system at present is the implementation of far-reaching reforms.

Activity-based funding for hospital care, new regulatory and performance management regimes, primary care-based planning and care integration are core elements of the reform programme of the Gillard Government – another administration that is feeling the political heat and has had to row back from some of the more radical of its health reform proposals.

International comparison of both the content and process of reform can yield useful and unexpected insights.

The Nuffield Trust’s new report on payment reform, following our European Summit supported by KPMG, points to the perils of an over-reliance on a single method of health care financing and the need to constantly refine a judicious mix of activity-based, quality-focused, and capitation payments.

The report reminds us of the importance of keeping a close eye on our near neighbours, such as the Germans with their innovative approach to paying doctors to undertake chronic disease management and Spanish experiments with using capitation funding to encourage more integrated care across hospital and community.

It is not just the content of health system reform where lessons can be learnt from overseas – the process can also be instructive.

In a recent reflection on the Trust’s annual joint health policy symposium with The Commonwealth FundRuth Thorlby observed that the UK Government seized with inertia in the face of a need to radically reform social care funding would do well to examine the experience of the Obama administration in steering through apparently impossible legislation to extend health care coverage.

Back to Australia. What were the insights I brought back with me?

Medicare Locals are new clinical commissioning group (CCG)-like entities in Australia, charged with developing better integrated primary and community health services, improving population health, and reducing inequalities.

Although not having the extensive budgets of their English cousins, I found the leaders of the 61 Medicare Locals very anxious to deliver quick service improvement wins.

This was motivated by a strong sense of three-way accountability: to local communities; to GPs who have mostly given up their former Divisions of General Practice to form these new population health organisations; and a federal government impatient for runs on the board before elections in 2013.

Our CCGs face an even greater challenge in terms of delivering quick wins for patients, professionals and politicians. They will hold the bulk of the local health budget in an ugly funding future, requiring tough rationing decisions.

They will also be at the vanguard of enacting a more competitive approach to commissioning than has been seen in the English NHS to date – the purchaser-provider split needs to really happen this time.

Perhaps the greatest challenge for CCGs is how to commission local services in a way that honours the very legitimate attachment of the British public to the NHS, yet enables a healthy dose of Aussie scrutiny and challenge, and avoids complacency about the nature and quality of existing local care.

I rather suspect that Robert Francis QC will be pondering this conundrum as he puts the finishing touches to his report this summer.

Suggested citation

Smith J (2012) ‘From Australia to England: the health care reform challenge’. Nuffield Trust comment, 30 August 2012.