Email from me to Anne-marie regarding PHI and Commission of Audit ideas…<\/p>\n
Thanks Anne-marie\u2026 last week was so busy, but at least it was a good busy, filled as it was with so many excellent events and conversations, quite often featuring you! Glad to hear that the club delivered on expectations\u2026 maybe Steve will be up for some insurrection? Or maybe not.<\/p>\n
[the following early morning rant is off-the-record on account of my current employment and it still being a bit rough, but am happy to explore it further with you as required J]<\/p>\n
On the modelling question, that\u2019s more on the economic modelling side \u2013 something we\u2019re tooling up for with Federico Girosi and Jane Hall, but haven\u2019t quite started on. Ian McAuley and John Menadue have been presenting solid thinking<\/a> about PHI for a while and would be worthwhile speaking with, particularly if you were looking to confirm your suspicions? Off the top of my head, I can\u2019t think of anyone who could actually back-in the COA\u2019s assumptions, as I\u2019ve never heard anyone credible (with the potential exception of Paul Gross \u2013 though unsure how credible he is) put forward that point of view, mainly because it is ideologically driven, rather than evidence based. Indeed, the closer I get to the PHI data, the PHI businesses and the people who run them, the more certain I am that PHI can only ever be inflationary \u2013 especially when positioned as a duplication of a public insurance scheme (as per that graph from the SMH that Jim Gillespie spoke to at the event last week), as it allows clinicians to select whichever system suits their interests best, making them the customer rather than the patient.<\/p>\n My back-of-envelope rationale:<\/p>\n PHIs market themselves as honest brokers in the health system, but in reality, benefit directly from health inflation, acting as hemi-bureaucracies which take a 13% clip of disbursements that pass through them. In Australia, this dynamic is emphasised by their mutual structure, as the lack of profit motive leads to a lack of interest in containing anyone\u2019s costs, especially when the Minister mandates premium increases based on demonstration of increased costs!!?? The smaller PHIs have no market power, so aim to please hospitals and doctors, thus making providers the customers, rather than their patients. This all has the effect of distancing patients from value the market generates, despite the fact they are the ones who fund it. I can\u2019t think of a more diabolical arrangement than the one we\u2019ve got. I\u2019m disappointed that conservatives are willing to trade this downside for the illusory benefits of choice (which don\u2019t actually exist because the basis on which we might choose are health service have nothing to do with the quality of that service). In reality, the choice argument is just a smoke screen for queue jumping, something conservatives aren\u2019t to keen on when it came to asylum seeker policy.<\/p>\n As a footnote, it\u2019s interesting to see the behaviour of the non-mutual PHIs \u2013 Medibank and NIB. They tend to be far more innovative and disruptive towards conventional health service models, mainly in an attempt to position themselves as the customers served by doctors and hospitals, while still being funded by their members. Unfortunately, their business model still ultimately relies on cost containment AND<\/strong> premium growth, and so also ends up also being inflationary \u2013 the main reason the US is the situation it\u2019s in.<\/p>\n Wrapping the diatribe up, ideally a health market should be singularly focused on improving the health of the population that funds it. I\u2019d estimate the current ranking of value captured by various actors looks something like this:<\/p>\n Under the previous administration, it probably looked more like this:<\/p>\n Ultimately, all forms of private health insurance make the providers the customers while the population carries the can. Interventions which position the population as customers should be the preference. Medicare was a big, necessary but not sufficient step in that direction.<\/p>\n I reckon some of this can inform some interesting health market design that could support a far more advanced and efficient health system. We\u2019ve previously discussed that we\u2019ve got 6 years to bring this to maturity, though if things keep tracking like they have been, it could be sooner.<\/p>\n Let me know your thoughts?<\/p>\n Cheers, Paul<\/p>\n <\/p>\n From:<\/strong> Anne-Marie Boxall [mailto:ABoxall@ahha.asn.au] No, not the fashion kind (although I am sure you would be great).<\/p>\n A curiosity question \u2013 are you and your people able to model something along the lines of the means-tested Medicare scheme proposed by the Commission of Audit? Not sure what data you have, or what is needed to model such a proposal, but it strikes me that the idea rests heavily on the assumption that a market for health insurance would drive down health costs (hospital and primary care and therefore premiums prices). Not quite sure what evidence underpins this assumption (other than economic theory) as Fraser era experiment suggests that it would not work. Just wondering\u2026.<\/p>\n Hope you made it to your many subsequent events last week. Dinner at the gentleman\u2019s club was interesting. I think they might also have an age criteria for membership there. 70 plus only.<\/p>\n Regards,<\/p>\n Am<\/p>\n <\/p>\n <\/p>\n Dr Anne-marie Boxall Australian Healthcare & Hospitals Association<\/strong> <\/em><\/strong>T<\/strong>: <\/strong>02 6162 0780 | <\/strong>F<\/strong>: <\/strong>02 6162 0779 <\/p>\n P Please consider the environment before printing this email<\/p>\n ***********************************************************<\/strong><\/p>\n IMPORTANT INFORMATION – PLEASE READ<\/strong><\/p>\n This email and any attachments are confidential. Please notify us if you have received this message in error, and remove both emails from your system. Any unauthorised use is expressly prohibited. AHHA collects personal information to provide and market our services (see our privacy policy at http:\/\/www.ahha.asn.au<\/a> for more information about use, disclosure and access). AHHA\u2019s liability in connection with transmitting, unauthorised access to, or viruses in this message and its attachments, is limited to re-supplying this message and its attachments.<\/p>\n ***********************************************************<\/strong><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Email from me to Anne-marie regarding PHI and Commission of Audit ideas… Thanks Anne-marie\u2026 last week was so busy, but at least it was a good busy, filled as it was with so many excellent events and conversations, quite often featuring you! Glad to hear that the club delivered on expectations\u2026 maybe Steve will be … Continue reading PHI dysfunction starting to gel…<\/span> \n
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\nSent:<\/strong> Monday, 5 May 2014 6:08 PM
\nTo:<\/strong> Paul Nicolarakis (paul.nicolarakis@outlook.com)
\nSubject:<\/strong> Modelling<\/p>\n
\nDirector, The Deeble Institute for Health Policy Research
\nManaging Editor, Australian Health Review<\/p>\n
\nthe voice of public healthcare<\/p>\n
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