CONSUMER CENTRAL? CANBERRA, THE CAPITAL
(Originally published at EisenhowersLastSmoke.com on 8/7/2013)
My last stop in Melbourne before I had gone to the airport for Canberra had been at Cabrini Hospital, where Dr. Simon Woods shared a quote from a British actor whose name I didn’t capture. The quote went roughly like this: “Australia is the most civilized place in the world. In all other nations, they allow politicians to roam amidst the population. In Australia, they quarantine them all in one place. It’s like a free range zoo for politicians.” (I learned here that disdain for elected officials, even in a place that generally accepts government intervention, is universal.)
At the airport, which I spent about 6 hours in just to travel 1 (faulty radio, waiting for part, etc), I met a resident of Canberra who called it "the most boring city in the world" which I think is a common saying, not just his opinion. He also told me that Canberra itself represents Australian pragmatism. When Sydney and Melbourne squabbled about which would be the capital city, they decided instead to split the difference and create a capital roughly in between.
I had travelled to the capital because there's no way around that some of the people you want to meet need to be in the capital. For example, I met with the people who oversee operations of Medicare, the government insurance program. The division I met is responsible for the service centers (remember all Australian health care is retail), billing, data analysis, utilization management, and ultimately, the results of the program. They do not set policy, but they have to make the policy work.
They outlined the history of Medicare as more than just a safety net, as many people see it today, but an actual universal coverage system. Though Medicare began with no real sense of limitations on services, there had always been small gaps between what many general practitioners charged and the portion that Medicare picked up. Those gaps are growing – in some cases dramatically – causing some to wonder, “What has happened to our universal system.” Like virtually every other nation, Australia is recognizing they can’t, or won’t be able to continue to afford their health care system at current growth rates. And people are feeling it.
The upside of the increasing consumer cost sharing is some amount of market power for consumers. Consumers can choose not to go to a GP who charges above and beyond what Medicare covers. They can also negotiate are protected by their ability to vote with their feet (sounds like a market to me). My host here described consumer empowerment in terms her father, who, upon hearing of what he felt to be an outrageous price of a procedure, argued, “Fred down the road charged my golf buddy less, so maybe I’ll go see Fred instead.” And wouldn’t you know, he got a reduced fee.
Australia’s Medicare is also meeting consumers naturally evolving behaviors. For example, patients have had the option to submit claims right in the doctors’ office for almost a decade, and as of last year, the government eliminated cash payments and now offers direct deposit and electronic funds transfers. They’re even working on a system where people can snap a photo of their bills or other documents about which they have questions, upload them, and get help over the phone.
The Medicare retail centers are also evolving with the times. The government has realized it’s inefficient to have different retail arms side by side, run independently from one another all with taxpayer money. Moreover, fewer people are visiting Medicare branches in person since they can do more transactions online. So the new Centerlink sites combine a range of government services. However, Centrelink has a primary focus on lower-income residents who qualify for assistance programs, whereas Medicare had been a broadly middle class program; there is some concern that middle class people won’t seek services in a Centrelink branch. It’ll be interesting to see how Australian stated values of egalitarianism play out in this arena.
After Medicare, I met the CEO of Consumers Health Forum (CHF), Carol Bennett. Consumers Health Forum is known as a “peak body” for Australian health care consumer advocacy. I knew about CHF from my research and it was the reason I had booked time in Canberra. I couldn’t think of a more fitting person to meet given my focus area.
I found Carol to be more than up for the task of representing consumers in the Australian health care policy world. She is clearly media savvy and strategic about how to get issues on the public policy radar screen. Among CHF’s top issues is the rising out-of-pocket costs hitting consumers, particularly vulnerable ones, and on the huge variability in doctors’ fees (sounds familiar). Of course consumers have no idea why prices vary, and Carol argues that for price signals to work, there should be some rationale for the differences. Thus, you could argue that Australia in fact has a market failure in this regard. “We should have access to comparison data to make informed decisions.” (If I knew Carol better I’d say, ‘Amen Sister!’). CHF is also about to start a body of work on informed financial consent, wrapping financial disclosures and consent into the existing clinical informed consent framework. Pretty genius. Hopefully it’ll work.
Carol had really interesting views on the need for more pay-for-performance and less fee-for-service in the Australian system. While this is the conventional wisdom in the U.S., I found it rather a rare view. One reason for less blind faith in incentive-based payments is that it would require a broader adoption of a medical home model, which would in turn require residents to sign up with a single provider and apparently, Australians don’t like to be locked in. Perhaps it’s a residual effect of arriving in Australia as convicts.
One of my favorite parts of my meeting with Carol was her explanation of how Australia fits sort of in between the U.S. and the U.K. (I had heard shades of this before and being in the country, it feels intuitive though I wouldn’t have been able to articulate it on my own). Australians are worried about turning into America, paying way too much for lower-quality outcomes with a sense that government should have no role. On the other extreme, the U.K. is seen as way over-regulated and providing insufficient choice to suit the Aussie independent streak.
Australians see a role for government in public health, in preventing market failures, and in protecting the public good. On the other hand, their acceptance of government programs is by no means “socialist” or particularly based on a “rights” framework. Rather, there’s a sense that “we’re taxpayers, so we’re paying for this system, and we use it when we need to.” In this way, Australians are every bit consumers in the way I have been arguing Americans need to be. They understand that they pay for their health care one way or another. They expect good information, good results, and to be part of the process. Australians expect government to operate responsibly and transparently, and to fix it if the system fails. They hold the government accountable because, after all, they are paying the bill. “We are active participants not passive recipients.” And thus, I had gotten what I came for and the capital seemed worth the long journey.
On my flight from Auckland to Brisbane later the following week, I caught the first half of “Canberra Confidential,” a show done by my fellow Eisenhower Fellow Annabel Crabb (@annabelcrabb) who I’d gotten to meet in Sydney. Her show was a sort of satirical expose looking for clues into the scandalous history of this very boring capital city. Though I didn’t catch the conclusion, and though I am every bit the Annabel Crabb fan (as was everyone I met), I am not sure I’m convinced that the place itself is at all interesting. But for me, Medicare, Consumers Health Forum, and several others that I met sure were.