Australia Seminar

UNITED KINGDOM – AUSTRALIA SEMINAR

FEDERALISM, FINANCING AND PUBLIC HEALTH

SEMINAR PAPERS

14-16 September 2003

Old Parliament House, Canberra, Australia

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ISBN: 0 642 82401 0

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ii Table of Contents

Preface...... iv Seminar Summary ...... 1 Lynette Glendinning Policy Imperatives: United Kingdom...... 8 Simon Stevens Policy Imperatives: Australia ...... 13 Jane Halton Managing the Mixed Economy in Health Care: A New Role for Government? ...... 19 Ray Robinson Management of Diverse Health Economies...... 25 Philip Davies Decentralisation: Promise and Problems...... 37 Roger Wilkins and Scott Greer Investment in Prevention and the Contribution of Population Health Policy to Improving Health Outcomes...... 42 Peter D Donnelly Investing in Prevention and Public Health in Northern Australia...... 52 Robert Griew and Tarun Weeramanthri Evolution of the Private Finance Initiative: Squaring the Tax, Spending and Pensions Circle? ...... 61 Michael Davis and Barrie Dowdeswell The Role of Private Health Care in Australia: Where to From Here?...... 77 Helen Owens Participant and Biography Listing...... 88 Participant Listing Biography Listing Contact Listing...... 100 United Kingdom Australia Program ...... 105

iii Preface

In September 2003, the Nuffield Trust - how health systems can be designed (UK), the Health Foundation (UK) and the and managed to enable the private Australian Government Department of sector to play a greater role; Health and Ageing jointly co-hosted and chaired the United Kingdom-Australia - the capacity of federated or Seminar on Federalism, Financing and decentralised arrangements to enable Public Health in Canberra, Australia’s health systems to become more capital. democratic, efficient and responsive to local communities; The seminar brought together forty invited decision-makers and health experts from - designing appropriate incentives and both countries to discuss the design and professional skills to support an management of changing health integrated health prevention, economies for better health and quality promotion and restoration role; and health care. - diversification of financing Building on a successful trilateral seminar arrangements to facilitate private in 2001, involving the United Kingdom, sector involvement in the delivery Australia and New Zealand, the Seminar and financing of services. reiterated that there is valuable learning from a collaborative discussion of The Seminar provided an insider’s converging challenges, despite cultural, perspective on the workings of each institutional and structural differences in country’s health system, together with health systems. opportunities for questioning the economic, social, cultural and political Both countries will experience an conditions influencing the directions of emerging burden of chronic disease as the reform. This, combined with an population ages, rising costs driven by new atmosphere for informed and intellectual medical technologies and pharmaceuticals debate, is something that the Internet is not and a need to focus more on prevention yet able to offer. and primary health care. Against this background, current policy and political We wish to thank the speakers and imperatives for both countries require participants for sharing their expertise and governments to increase patient choice insights and for contributing to increased while maintaining equitable access, despite learning across and between the two increasing pressure on health budgets and countries and their health systems. rising expectations. John Wyn Owen CB Ensuring the sustainability of financing Secretary Nuffield Trust, United Kingdom will be a key challenge for governments if Mr Stephen Thornton they are to respond to current pressures Chief Executive and expectations and avoid unnecessarily The Health Foundation , United Kingdom burdening the next generation. Ms Jane Halton The United Kingdom-Australia Seminar Secretary explored these challenges focusing on: Australian Government Department of

Health and Ageing

iv Seminar Summary

Lynette Glendinning

Lynette Glendinning is Director of P.A.L.M Consulting Group

1. Background and Purpose involvement and a strong focus on prevention. The United Kingdom - Australia Seminar on Federalism, Financing and Public Mr Simon Stevens, Health Advisor to the Health was held at Old Parliament House, Prime Minister of the UK, outlined the Canberra on September 14-16, 2003. fundamental shift underway in the UK Jointly supported by the Nuffield Trust health system. The UK is increasing health (UK), The Health Foundation (UK) and spending to 9.4% of GDP by 2008, the Australian Government Department of retaining the benefits of a universal tax Health and Ageing, the seminar convened based model, free at the point of delivery. thirty five decision makers and health The challenge for the UK now is to experts from both countries to discuss the undertake major transformation of the design and management of changing supply side of health from a centralised to health economies for better health and a devolved service, able to offer wider quality health care. choice and greater diversity of provision but bound by common standards, tough 2. Policy Imperatives inspection and shared values.

The Australian Health Minister, Senator The policy imperatives for both countries Kay Patterson, opened the Seminar by require governments to increase patient identifying a number of challenges facing choice while maintaining equitable access, health systems. These challenges include despite increasing pressure on health the emerging burden of chronic disease as budgets and rising expectations. It will be the population ages, the rising costs of critical therefore to develop more rigorous medical technologies such as prostheses evidence to support decisions and provide and pharmaceuticals and the need to focus a basis for measuring the effectiveness of on prevention and primary health care. interventions. Equally, there must be a Ensuring sustainability of financing will be focus on the quality of delivery across both a key challenge for governments if public and private sectors through communities are to avoid unnecessarily enhanced prevention and involvement of burdening the next generation. consumers.

Ms Jane Halton, Secretary of the As Mr John Wyn Owen, Secretary of the Australian Government Department of Nuffield Trust noted, governments in a Health and Ageing, argued that Australia global economy will need to develop the must address the challenges of federalism competence to design and manage reform and geographic dispersion as it undertakes in health care so that it is both resilient and system reform. This will demand more sustainable. This will require a capacity to rigorous evidence to underpin decisions address the determinants of health as well and improved focus on service quality as the health system itself. through consumer and provider

1 3. Common Themes - setting direction by formulating health policy, defining vision and Managing the Mixed Economy in Health establishing clear performance Care indicators in conjunction with consumers and the wider public; Both Australia and the UK are developing health care systems in which both the - exerting influence through private and public sectors have a role to regulation and advocacy, play. These emerging systems must meet particularly as decreasing central multiple objectives including maximising control requires greater health gain, equitable distribution and independence; efficient use of resources, improvements in service quality as well as acceptable levels - collecting and using intelligence by of accountability. identifying and transferring innovation and good practice across Mr Philip Davies, Deputy Secretary of the the system. Australian Government Department of Health and Ageing, reminded the Seminar Leaders and managers will need to that increasing diversity was a exercise stewardship, in health, by characteristic of maturing health systems managing the health system; of health, by and that this diversity was manifest not oversighting strategy; and for health, by only in the changing balance between advocacy in trade, industry and other parts public and private financing but also in the of the socioeconomic system. Competent changing balance between acute and change management will be the critical chronic care, treatment and prevention, capability required of leaders. investment in capital rather than labour as well as in the increasing diversity in the Federalism and Health and Health Care health workforce. While providing choice and responsiveness, a diverse system also In a joint presentation, Mr Roger Wilkins risks confusing consumers and providers of the NSW Cabinet Office and Mr Scott and increasing costs. Greer of the Constitution Unit of University College London, argued that The World Health Organization’s World decentralised or federated systems were Health Report 2000 argues that health effective because they were more likely to policy and strategies need to cover the enhance democracy, policy effectiveness private financing and provision of services (the capacity to experiment) and efficiency as well as the state funding and provision. or fitness for local purpose. A federated Government must assume ultimate system, however, requires that local areas responsibility for the overall performance have real power, a formed constituency of the whole system. This demands a new and an independence of voice through role for government – that of overseer and local media. In addition there must be trustee rather then operational manager, sufficient coherence to avoid dysfunction. what the WHO calls ‘stewardship’. It was recognised that in Australia federalism was creating dysfunctionality Professor Ray Robinson of the London and that it had the potential to do the same School of Economics, cited the three in the UK. important ‘stewardship’ roles identified by WHO for government in ensuring In moving to a more federated system with coherence across all sectors as: semi-autonomous regions, the UK will need to avoid the risk of constant

2 restructuring and recentralisation and focus on clinical efficacy to issues of configure in ways that enable real human dignity and justice. In designing experimentation and the transfer of lessons the health systems of the future it will be learned. For Australia the challenge is to important to rebalance the ‘law of inverse move beyond adversarial negotiations need’, whereby the relatively advantaged involving cost and blame-shifting, in order consume the bulk of the health budget and to generate greater coherence across the to remove false dichotomies between acute continuum of care. care and public health. The system must be underpinned by appropriate public health The plenary discussion recognised law and policy as well as an evidence base federalism is built on trust and that this and clear performance measures. means investing in networks rather than institutions, while providing safe harbours Indigenous health will test the for experimentation. To avoid commitment of Australians to an dysfunctional federalism, health systems integrated approach to public health. The will need to more clearly align incentives UK will need to avoid the risk of and funding with objectives. This requires marginalising rather than integrating the development of meaningful metrics prevention, promotion and restoration. based on evidence as a basis for comparison. Financing and Delivering Services

Public Health Mr Michael Davis, Chief Executive of Catalyst Healthcare Management in the Professor Peter Donnelly, Director of UK, noted that the impact of Public Health in Scotland, defined public diversification on health financing has health as multi-professional, cross agency seen innovative and entrepreneurial and focused on protection, promotion and approaches emerge. The UK Private restoration. Public health is most effective Finance Initiative is a performance based when these elements are integrated and means of procuring property over an this integration requires a willingness to extended time scale. It replaces accept that return on investment may take conventional public works contracting ten to twelve years. Increasingly, with contestability between the stated, professionals will be the key deliverers of desired outcomes and differing approaches prevention and promotion and they will to design logistics, financing and need to be provided with appropriate construction of appropriate facilities. incentives and skills in order to undertake an integrated health prevention, promotion The success of this initiative will only be and restoration role. sustainable if the public sector can better define and plan service capability across Mr Robert Griew, in conjunction with multi sectoral systems. Sustainability also Dr Tarun Weeramanthi, respectively Chief depends on the capacity of the private Executive and Principal Medical Advisor sector to make a dynamic contribution and of the Northern Territory Department of to find its security in portfolio investment Health and Community Services, outlined strategies that are larger in scale, lower in the needs of aboriginal communities in the risk and higher in mutual gain. Northern Territory whose median age of death is fifty years. The co-morbidities In a presentation from Mrs Helen Owens, and co-occurrences of illness in indigenous a Commissioner of the Australian communities demand an integrated and Productivity Commission, it was noted pragmatic approach that moves beyond a that Australia has had a strong

3 involvement of the private sector in the 4.1 The Vision for Future Health delivery of health care and to a lesser Systems extent in its financing. However the role of the private sector is somewhat The effective health care system of ambiguous, given that governments at all the future in both the UK and levels in Australia have pursued diverse Australia will be more: policies to promote the public-private sector mix. The role of the private sector is • focussed on healthy people and viewed variously as supplementing public prevention; services, providing alternative services or supplementing public funding eg through • capable of providing patient private health insurance. This ambiguity is choice; exacerbated by the difficulty of providing a reliable assessment of the relative • able to address inequity; performance of the public and private health sectors. • resilient, adaptive and ultimately sustainable. For Australia, the challenges into the future will require dealing with the This health system will be disjunction between public and private characterised by: sector funding and service provision. The vulnerabilities faced by the private sector • a mix of both private and public due to changes in government policy, sector finance and delivery; structural changes in the health insurance market, technological advances and • diversity and complexity that changing public perceptions will also need enables local responsiveness and to be addressed. innovation;

The plenary discussion agreed that • integration of the prevention governments will need to provide better promotion, and delivery of policy and regulatory frameworks, identify health services; how risk will be addressed and become more sophisticated in procurement, asset • a robust evidence base to support and infrastructure management, while decisions and to transfer what working with the private sector to develop works intelligently. innovative and effective ways to both finance and deliver more diverse health care. 4.2 The Operating Environment for Health

4. Strategic Direction for Future In planning the health system of the Health Systems future, decision makers will need to take account of emerging trends The following summary statement outlines impacting on the design and the shared strategic directions for both effectiveness of the health system. Australia and the UK as well as the These factors represent both bilateral implications arising from the challenges and opportunities and Seminar. include:

4 • increase in costs and innovative and genuine local opportunities through advances participation. in technology;

• neither country manages the • escalating burden of chronic anxiety and uncertainty of disease as the population in both consumers and providers countries ages; through the transition process and governments consequently • higher levels of consumer find it difficult to sustain reform. demand and expectations;

To address the risks, it is therefore • continuing pressure on health critical to the success of the desired budgets; vision that both the UK and Australia focus on the four key • ‘globalisation’ of health factors of success. requiring adaptation to global factors while also forging local 4.4 Key Factors of Success responses; Change • challenges to the numbers, skill and adaptive capacity of the Both countries must competently health workforce; manage the transition from the current system to a more diverse yet integrated system. This will require • pressure to demonstrate action a particular focus on the within electoral time frames management of community and while recognising that return on provider perceptions and investment in public health is expectations. often about ten to twelve years.

4.3 Strategic Risks Diversity

Risks The UK and Australia will both need to design and steer more Given the challenges in the future diverse, complex systems by operating environment, the major building networks of cooperation as risks to achieving the desired vision well as developing robust evidence for health are that: and measurement to underpin decisions. • Australia fails to move to a more functional form of Federalism and therefore lacks a coherent Integration system of primary care focussed on the patient. Both countries face the challenge of better integrating prevention, promotion and delivery so that the • the U.K. fails to decentralise patient journey is the focus of the appropriately and does not system. develop a capacity for

5 now need to develop coherent public health strategy based on evidence and

subject to rigorous analysis and UK – Focus on Capacity accountability.

In addition to the above factors of Exert Influence success, the UK needs to build an architecture and capacity in its health Having set clear direction, the system that will facilitate constructive governments of both Australia and diversity and avoid recentralisation or the UK will need to ensure they have constant restructuring. the capacity to influence and shape the system. This requires the Australia – Focus on Coherence development of regulatory frameworks designed to ensure Australia will need to develop a appropriate independence and to deal more coherent approach to with a mixed system. Governments federalism if it is to deal with the will need to ensure that incentives are burden of chronic disease and ensure aligned with objectives so as to shape the sustainability of its health the behaviour of individuals and system. agencies towards the desired directions. They will also need to 4.5 Strategic Responses for ensure that new models for Government identifying and sharing risk are developed and vehicles for ensuring In meeting these challenges, the necessary capital and governments have an important and infrastructure are available. changing role as stewards of the whole health system that goes beyond Gather and Disseminate Intelligence the management of publicly funded at all levels and publicly delivered elements. The key tasks for the governments of both To secure appropriate intelligence Australia and the UK in steering their and disseminate it at all levels will respective health systems towards the require the engagement of consumers, desired future are to: the health workforce and Provide Direction communities to clarify what they value. It will also be necessary to Both governments need to formulate build a robust evidence base and policy, set strategy and then clearly metrics for fields such as health articulate the vision, rationale and key prevention, resource management, indicators of effective performance and relative private/ public sector that ensure that all constituencies performance. In undertaking this task, have shared expectations. In governments will need to ensure that undertaking this task they need to there are ‘safe harbours’ in which involve consumers, providers and innovation can be nurtured and citizens in order to shape the public disseminated. discourse to focus on the burden of disease for future generations. 4.6 The Way Forward for Australia

As part of their direction setting role, governments in Australia and the UK

6 • Focus the health system and debate • Determine the role for regions in to address the burden of chronic governance and ensure that local disease: government and other organisations are aligned with the - commission an Intergenerational directions for the whole system. Report Mark II to quantify the costs and benefits of chronic disease in • Radically reconfigure public health economic terms and focus on including funding, responsibilities, investment now and for the future. roles and educational requirements.

- develop pathways, protocols, • Undertake a detailed analysis of incentives and support tools to trends in PFI, especially the address chronic disease including apportionment of risk to ensure targeting a robust evidence base and their long-term place in the UK IT/HR tools. system.

4.8 The Way Forward – - set directions by ensuring the delivery of consistent shared the Bi-Lateral Agenda

messages to the community across The following issues were deemed jurisdictions. useful by each country for future

bilateral discussions and • Reform primary care through a more collaboration. Whatever the content comprehensive and coordinated of the discussion, the development of approach to care appropriate metrics to underpin such

discussion is crucial.

• Assess the use of private capital for infrastructure, and sustainable From Australia’s perspective, useful payment models including requisite collaboration might focus on safety nets. quantifying the burden of disease, models of primary care, variable 4.7 The Way Forward for the financing models, workforce issues, United Kingdom effectiveness measures for IT and Electronic Decision Support and • Exert influence in multiple ways, systems of aged care. including through regulation based on intelligence. Determine what For the UK, consideration of public data, especially in a mixed system, health and primary care would benefit is needed to underpin this from further bilateral discussion as intelligence and examine current would further exploration of the regulation and other levers of differential models and outcomes in a influence to determine their more devolved UK system. appropriateness.

• Secure intelligence based on timely, rigorous health services research and sound data collection systems in order to finesse management processes.

7 Policy Imperatives: United Kingdom

Simon Stevens

Simon Stevens is Health Policy Adviser to Prime Minister Tony Blair

Summary of points covered by Simon Stevens • hospital payment reform 1. Context • patient choice • UK health underinvestment – funding system, or funding quantum? • labour market and pay reform – GPs, hospital specialists, nurses et al • 2003 tax increases; health spend from 7.5% to 9.5% GDP in 5 years • interface with social care

• switch of debate from financing to 4. Some key debates supply side: how to ensure output, responsiveness and quality not input • funding/regulation/ownership – price inflation (see Annex) relative value-added of each

• the end of British exceptionalism re the • pluralism v localism (and democratic NHS? accountability)

• caveat: focus discussion on England; • choice v voice (and impact on equity) healthcare not public health • integration v contestability, ‘make’ v 2. New NHS anatomy ‘buy’ (Kaiser v United)

• capacity growth – health professionals; • chronic disease v elective care infrastructure incl PFI&IT • how to animate PCTs – contestable • new national architecture – NICE/Nat networks? Service Frameworks/Commission for Healthcare Audit and Inspection/the • nature of regulation Modernisation Agency • the changing division of labour • new local architecture – Primary Care Trusts, foundation trusts, private • rights and responsibilities providers

3. New NHS physiology

• the 3 dimensions of UK health reform

• capitated PCT unified budgets

8 ANNEX

Annex: The Current NHS Reform will be underpinned by support for staff – Programmme with more staff, greater flexibility, increased freedom to do their job even Delivery the NHS Plan Executive summary better. The aim: shorter waits, better (full document at cancer and heart treatment, modern but www.doh.gov.uk/deliveringthenhsplan ) compassionate care.

“1. There are two arguments that matter on 4. So we believe in the traditional method the health service. One, how is it funded? of funding, but a completely new way of Two, how is it run? running the service. It is this reform of the supply side system design which this 2. On the first question, more investment document focuses on. has to be paid for. Either through taxation, social insurance, or private insurance or 5. Chapter 2 outlines some of the key individual charges. No system is free. benefits that this extra health spending will Many systems are not only more bring. Waiting times for operations will expensive than taxation but leave millions fall from a maximum of 15 months now uninsured, without any cover at all. We to 6 months by 2005, and 3 months by believe that the benefit of a universal tax 2008. Waits in A&Es and primary care based model is that it is an insurance will fall too. And extra investment in policy with no “ifs” or “buts”: whatever major conditions will cut cancer and your illness, however long it lasts, you get cardiac death rates, and improve services cover as long as you need it. We made our such as mental health and for older people. choice in the Budget stating plainly that for the NHS to improve faster and tackle 6. Chapter 3 summarises some of the key years of underfunding, more money is building blocks to growing capacity. needed. The Budget now demonstrates Compared with latest available headcount how, within our tough public finance rules, figures, there are by 2008 likely to be net we will through general taxation be able increases of at least 15,000 more GPs and to fund a ‘catch-up’ period to get us to consultants, 30,000 more therapists and health spending of 9.4% of GDP by scientists, and 35,000 more nurses, 2008 – easily on a par with European midwives and health visitors. Primary levels of health spending. care services will be expanded. More elective surgery will take place in new 3. On the second question, we believe that freestanding surgical units or ‘diagnostic any system for delivering health care must and treatment centres’. Hospital capacity is uphold the founding principle of the NHS likely to grow by at least 10,000 more – that it is free at the point of use based on general and acute beds. need, not ability to pay. But Chapter 1 describes how the 1948 model is simply 7. To help ensure that the large extra inadequate for today’s needs. We are on investment the NHS is now getting a journey – begun with the NHS Plan – translates into capacity growth not which represents nothing less than the inflation, a greater share of the new replacement of an outdated system. We funding will be used on training new believe it is time to move beyond the health professionals for the future, and 1940s monolithic topdown centralised on capital infrastructure and NHS towards a devolved health service, modernised information technology offering wider choice and greater diversity rather than current spending. bound together by common standards, tough inspection and NHS values. This

9 ANNEX

8. Chapter 4 explains that we are confident patient. This might include NHS hospitals that the new national architecture we put in locally or elsewhere, diagnostic and place in our first term is right. There is treatment centres, private hospitals or now broad support for a national body like hospitals overseas. NICE to ensure growing NHS spending is targeted on the most cost-effective 11. Chapter 6 explains that as NHS treatments. There is wide support for capacity grows organically, we will National Service Frameworks covering continue to use private providers where cardiac, cancer, mental health services and they can genuinely supplement the other major conditions. There is consensus capacity of the NHS – and provide value on the need for an external independent for money. This will also expand choice inspectorate to assure the quality of and promote diversity in supply, hospitals and primary care on behalf of particularly for elective surgery. New PFI patients. On the need to spread best mechanisms, joint venture companies, and practice through the NHS Modernisation international providers will all be Agency. And whereas the 1990s were developed. spent debating internal NHS structures, there is now almost complete agreement 12. Devolution to the frontline will be that Primary Care Trusts are the right stepped up, as Chapter 7 describes. The approach. So in just five years, this new Department of Health will be slimmed architecture has radically changed the down as, for example, in future way the NHS operates. negotiations over national employment contracts will be undertaken by NHS 9. But having got the structures right, employers collectively rather than by the Chapter 4 goes on to argue that we now Department of Health. Instead of all public need to introduce stronger incentives to capital being allocated by the Department ensure the extra cash produces improved of Health from Whitehall, we will consider performance. Primary Care Trusts will be establishing an arms-length Bank, free to purchase care from the most controlled by the NHS itself, which appropriate provider – be they public, would invest capital from the Budget private or voluntary. The hospital payment settlement for long term and innovative system will switch to payment by results capacity growth and redesign. It will using a regional tariff system of the sort particularly focus on strategic shifts in used in many other countries. To configuration to more community and incentivise expansion of elective surgery primary care based services. As regards so that waiting times fall, hospitals or revenue funding, locally run Primary DTC/surgical units that do more will gain Care Trusts will hold over 75% of the more cash; those that do not, will not. growing NHS budget.

10. Chapter 5 underpins the new incentives 13. The first NHS foundation hospitals with the introduction of explicit patient will be identified later this year, with choice. Over the next four years, starting freedom and flexibility within the new this year, the Scandinavian system will be NHS pay systems to reward staff progressively introduced across the NHS appropriately, and with full control over all in which patients are given information on assets and retention of land sales. We will alternative providers, and are able to explore options to increase freedoms to switch to hospitals that have shorter waits. access finance for capital investment under By 2005 all patients and their GPs will be a prudential borrowing regime modelled able to book appointments at both a time on similar principles to those being and a place that is convenient to the developed for local government.

10 ANNEX

14. Chapter 8 makes the case for a England over the next five years. Higher radically different relationship between than that would be unlikely to expand health and social services, particularly to healthcare capacity any faster. Lower than improve care for older people. As the that would mean an excessive and growing Wanless Report suggests, we will legislate gap between supply and demand. But the to make local authorities responsible for Government is determined to ensure the costs of hospital bed blocking. Rather that additional funding is backed by than imposing structural reorganisation or independent oversight of how the nationally ringfenced budgets, this scheme resources are being used, to ensure they means that social services departments will deliver the intended results. beincentivised to use some of their large 6% real annual increases to stabilise the 17. Chapter 10 therefore describes how at care home market and fund home care a local level, PCTs will be required to services for older people. There will be publish prospectuses, accounting to their matching incentive changes on NHS local residents for their spending hospitals to make them responsible for the decisions, the range and quality of costs of emergency readmissions, so as to services, and explaining the increasing ensure patients are not discharged choices that patients will have. prematurely. 18. At a national level, legislation will be 15. As well as growing the numbers of introduced to establish a new tough health professionals, there need to be independent healthcare fundamental changes in job design and regulator/inspectorate covering both the work organisation. Chapter 9 sets out NHS and the private sector, with a new how this requires new contracts for GPs, Chief Inspector of Healthcare – not consultants, nurses and other staff. The appointed by Ministers and reporting new NHS pay system will allow greater annually to Parliament. An equivalent allowance for regional cost of living body will be created for social services. differences, and free local employers to design new jobs breaking down traditional 19. In summary the NHS is now on a occupational demarcations. In seeking to stable financial footing and can face the expand the size of the healthcare future with confidence: with the NHS Plan workforce, a careful balance will be struck in place; investment and reforms between the need to pay staff competitive beginning to show results; power shifting rates in tight labour markets, and the need to the NHS frontline. The changes will to ensure productivity gains on a par with take time. But with investment to reform, the wider economy. Staff will be supported the best days of the NHS are ahead of us, to continue life long learning. not behind.”

16 Given UK health capacity constraints, there are difficult judgements on the speed of funding increases. Too slow, and we miss the opportunity to improve the nation’s healthcare, with the risk that people simply give up on the NHS. Too fast, and investment might produce input price inflation, rather than improved output and responsiveness. On best advice the Government has decided that 7.5% is the optimal level of real NHS growth in

The New NHS

1948 NHS model New model NHS

Values: free at point of need Values: free at point of need

Spending: annual lottery Spending: planned for 5 years

National standards: none National Standards: NICE, National Service Frameworks and single independent healthcare inspectorate/regulator

Providers: Monopoly Providers: Plurality – state/private/voluntary

Staff: rigid professional demarcations Staff: modernised flexible professions benefiting patients

Patients: handed down treatment Patients: choice of where and when get treatment

System: top down System: led by frontline – devolved to primary care

Appointments: long waits Appointments: short waits, booked appointments

Policy Imperatives: Australia

Jane Halton

Jane Halton is Secretary of the Australian Government Department of Health and Ageing

Introduction that the expenditure growth will create major fiscal pressures. • The Australian health system has enjoyed a long period of stability for • As part of the 2002-2003 Budget, the the last twenty years. Reforms have Australian Government released an been incremental, designed to “fine Intergenerational Report that assessed tune” pressing issues. the long term fiscal impact of current policies over the next forty years. The • The Australian community values Report identified an emerging gap Medicare very highly, and the between government revenue and government is committed to ensuring expenditure, with increased health and its strength and sustainability over the aged care expenditure accounting for a longer term. Sustainability of the large part of the projected gap. health system appears, however, to be coming under challenge. This has • Projections indicated, for example, that become a major concern for both the Federal Government expenditure on government and the community. health as a proportion of GDP could double by 2041-42. • A sustainable health system is one that will continue to operate in a viable and • The rapid escalation of health and aged affordable fashion for the foreseeable care costs was attributed to two main future and beyond. factors: − a doubling of people aged over 65 • In the UK it has been recognised that a years during the next four decades; low level of investment in the health and system could cause it to falter, so more − rapid technological advancements, has been spent and widespread reforms combined with community have been introduced. In Australia, the expectations of access to the latest challenge is different. Expenditure health treatments. growth has been accelerating. • The Intergenerational Report created a • Australia now spends 9% of GDP on context of concern and scrutiny, health. This is still in the mid-range of focusing the attention of policy-makers OECD countries, a positive situation and the community on the long-term given our very high healthy life costs of our health and aged care expectancy. Given our expectations of system. It brought to our attention the an ageing population, contracting importance of ensuring that our system workforce and rapid technological meets the changing needs of the developments, there is now concern Australian population without prohibitive cost.

• This brought into focus two key PBAC and MSAC questions – how do we decide what government should pay for, and how • Australia’s Pharmaceutical Benefits do we contain burgeoning demand? Advisory Committee (PBAC) has been a leading international example of • These questions sometimes occupy the evidence-based processes for making public agenda more than other decisions about public funding. Our important issues, such as how we Medical Services Advisory Committee effectively manage the system, and (MSAC) has been introduced more more importantly, what outcomes can recently to undertake a similar function we achieve? for medical services.

• But “behind the scenes”, policy- • Now we are moving to apply these makers know that all these questions methods more widely, not just to are linked, and that they would all pharmaceuticals and medical services benefit from structured solutions to but to prostheses funded by private these issues. insurance and to preventive health measures. • Responses to the sustainability challenge in Australia include: Evidence requirements for prevention − more evidence-based decision making; • Australia is committed to establishing − better quality in health care a strong evidence base for our delivery; and decisions about preventive health − a well-balanced public/private mix. measures.

More evidence-based decision making • We must ensure that decisions to put resources into more prevention are • Public expectations of access to new based on solid epidemiological and technologies is a huge component of cost effectiveness evidence. This health expenditure growth. This applies at both the whole-of-system applies across pharmaceuticals, level, where emphasis is shifting from diagnostic services and medical curative to preventive measures, and at procedures. the level of funding for specific individual interventions. • For example, expenditure on the Pharmaceutical Benefits Scheme has • In November 2001, we published a grown by 60% in the last four years report titled ‘Returns on Investment in and is projected to be more than Public Health: an Epidemiological and federal expenditure on public hospitals Economic Analysis.’ The report in 40 years. quantified the benefits of previous public health measures, demonstrating • Clearly we can’t “have everything”. excellent results. We will soon face difficult decisions about where our resources should be • In addition to the immunisation allocated. To make those decisions success story (eg measles programs soundly, we need to emphasise the use saved an estimated $155 for every of rigorous evidence about health $1 expenditure from 1970-2000), the outcomes and relative costs. report found that:

− Programs to reduce smoking have • In re-negotiating the Australian Health saved the Australian Government $344 Care Agreements, we have required million, or $2 for every $1 spent on that the States and Territories publicly anti smoking programs over the last commit to a specified level of funding three decades. for the upcoming five-year Agreement period. They will need to report on − Australia’s HIV/AIDS transmission progress against that funding rate would have been 25 per cent commitment each year. They will also higher if we had not invested so be required to commit to a new heavily in education and prevention performance reporting framework. programs. • These requirements will help improve • Through the OECD health project we federal decision-making and national are supporting international research policy outcomes. They are also into the impact on health systems of intended to reverse the trend of State new technologies, particularly medical funding for health decreasing when technologies and bio-pharmaceuticals. Commonwealth funding increases.

− A number of OECD countries are Balancing the public/private mix concerned about the impact of new technologies on long term health • Our focus has been to provide a broad- outcomes and health expenditures based investment platform for the and are looking for more equitable health sector, including both public ways to manage their adoption and and private sector financing. Ensuring diffusion into the future. a balance of public and private financing helps secure the long-term − There has been considerable sustainability of our system, by sharing interest in Australia’s technology the costs between individuals and assessment mechanisms with a governments. number of countries wanting to learn more about our achievements. • Australia maintains a strong equity While already at the forefront of focus through our universal public work in this area Australia is system, while ensuring choice through looking to further refine our voluntary private insurance. There has assessment mechanisms, also been a strong commitment to particularly by developing more equity in the private system through sophisticated economic modelling the maintenance of community rating techniques. so that the elderly or sick do not attract higher fees. Accountability • In order to achieve increased private • At a system-wide level, information is investment and maintain the fairness of also important for sound decision- community rating in the private system making. Australia’s federal structure our approach was to offer a mix of makes it particularly important to have both financial incentives for all and adequate and consistent information benefits for taking out private health about the expenditure of federal funds insurance early in life. This mix of by the States. incentives has been very successful in encouraging younger people back into voluntary private health insurance.

• In the context of re-negotiating the • The whole health sector benefits from Australian Health Care Agreements, a a strong private system. It takes Reform Agenda was developed by the pressure off the public hospital system, Australian Government and the States provides choice for consumers and and Territories that addresses many of importantly provides increased these difficult interface areas. For investment in health care without example: increasing taxes. − The Pathways Home initiative will • Australia’s particular system of help people leaving hospital, parallel public and private insurance particularly the elderly, to make a has drawn attention internationally, smooth and easy transition home and is the subject of an OECD Health using step-down and rehabilitation Project case study. The case study services. focuses on the interdependence of the public and private schemes and will − A Draft Framework for the Care of form part of a wider study on the Older Australians has been private health industry in OECD developed by representatives of the countries. State and federal governments to guide improvements at the Better quality interface of aged care, hospital and community services. • Another important way to improve sustainability is to increase the quality • The split funding responsibility of health services – to secure better between federal and state governments value for our expenditure. does place a constraint on reform in the Australian system, making consistent • There are opportunities to improve reform at a national level very safety and quality at all levels of the challenging. health system. The Australian Government has responded with a • For example, we have an initiative to number of initiatives to provide supply pharmaceuticals to patients direction at a national level. being discharged from hospital through the federally funded Pharmaceutical In partnership with States and Territories Benefits Scheme. The arrangement avoids patients being discharged with • The interface between Australian limited supplies of medication and Government and State or Territory having to attend a GP then a services can be an area of difficulty pharmacist to receive follow-up within our federal structure. For prescriptions shortly after leaving example, general practice and aged hospital. care are funded by the federal government but public hospitals are • Several years after the reform was funded and managed by State introduced, only three of the eight governments. This can create State/Territory jurisdictions have frustrations for service providers and signed up. This contrasts somewhat consumers when a person needs to with the system of Chief Executive move between systems and it is not as Circulars in the UK. seamless as we would like.

• Nevertheless, the jurisdictional split Scheme, and how to use it responsibly can create a “dynamic tension” that to ensure its long term viability. The requires more patience, encourages campaign includes a national stability and makes top-down policy advertising program and information less tenable. It encourages innovation tools including a campaign booklet, and diversity at a local level and free telephone information service, ensures that different States can website and community information provide services to meet local needs. booths.

In General Practice • This is an important example of managing consumer expectations by • Primary care is a different situation, drawing to their attention the where the Australian government is the ramifications of irresponsible only public funder. Even so, reform uninformed access, including over use. can be just as challenging because services are delivered by private • In other cases, information overload practitioners, leaving the government can be almost as much of a problem. with limited policy levers and no direct Increasingly patients are coming to control. doctors’ surgeries armed with bundles of information from the internet – • The fee for service system also acts as some of it accurate and helpful, some a constraint to quality-based policy of it misleading or alarmist. initiatives. • This creates new expectations of our • In response we have encouraged the workforce: that they will also be development of a more mixed familiar with the new information in remuneration system, using Enhanced order to help patients discern the Primary Care (EPC) MBS items and quality from the dross; that they will Practice Incentive Payments. These provide access to every new cure; and measures are designed to increase the that they will communicate with focus on service quality not volume. patients on a basis of shared The shift has created some tensions information and decision-making, not with parts of the profession, but they traditionally a feature of the doctor- are being managed constructively. patient relationship.

With Consumers Quality health outcomes through prevention • Consumers can also be encouraged to take more responsibility for safety and • Prevention is taking an increasingly quality issues. higher profile position in our health policy debates. • For example, we recently released a 10-point guide for consumers on what • The Minister has identified that to look for and ask about, in order to focusing more on prevention is improve the quality and safety of important for improving health health services they receive. outcomes and enhancing sustainability, and she is committed to achieving that • We have also launched a campaign to result. educate members of the community about the Pharmaceutical Benefits

• Increasing the role of prevention in the • The Australian Government mainstream health system will help Department of Health and Ageing has sustainability by reducing the a reputation for leading the way on unnecessary financial burden of healthy lifestyle change in Australia. avoidable illness and by increasing the This was demonstrated by the productivity of our workforce. Department’s pioneering ban on smoking in the workplace. • This will be particularly important as the proportion of our workforce in the • In that tradition, we are now leading “mature” age categories increases. the way on physical activity, with the Older workers have tended to be more introduction of a “10k a day” program susceptible to leaving the workforce to encourage healthy levels of physical due to health problems. activity (10,000 steps each day) among department employees. This is the sort • The real challenge is turning of direct way in which policy makers knowledge about the potential benefits can provide leadership to the of prevention into real life community. improvements. This requires both sound policy solutions, and the more Conclusion difficult challenge of persuading and motivating individuals to change their • From this quick run down of own behaviour. Australian policy imperatives we can see that the Australian health policy • In its most recent Budget the context is very different to the UK’s, Government announced a ‘Focus on but that there are many common Prevention’ package of several issues. measures to improve the health and productivity of our ageing workforce • Both countries for example, are likely and ease cost pressures on the health to face confronting decisions in the system. One of the initiatives receiving near future about how to maintain funding will encourage the use of equitable access to high quality care in “lifestyle prescriptions” in an effort to the face of rising costs, fiscal pressures increase behaviour modification before and apparently limitless technological turning to medication. advances.

• A significant recent achievement has • Demographic shifts will further been the establishment of a National increase the demands on both our Obesity Taskforce. The Taskforce was systems – challenging their financing established in November 2002 under mechanisms and demanding new the auspices of the Australian Health service delivery arrangements. Ministers’ Advisory Council. The work of the Taskforce has highlighted It is interesting to note that in many ways – the need for consistent, action-oriented such as emphasising evidence and quality information to be delivered to the outcomes, and seeking a balance between community on the importance of public and private – we are moving in increasing levels of physical activity similar directions to solve related and encouraging healthy eating problems, despite our very different patterns in children and families. starting points.

Managing the Mixed Economy in Health Care: A New Role for Government?

Ray Robinson

Ray Robinson is Professor of Health Policy at the London School of Economics and Political Science

Preamble currently accounts for over 80% of funding in the case of major NHS capital This paper has been prepared as a projects and its role is set to grow even background document for the second more in the future, including expansion plenary session ‘Changing health into the primary care sector. Since 2000 – economies – design and management’. It when the Secretary of State signed an focuses on two trends noticeable in the historic concordat with the Independent UK, Australia and many other health Healthcare Association - government economies; namely, (i) the changing policy has sought to encourage public- public-private mix and (ii) private partnerships in provision through decentralisation of decision making NHS funding of privately provided involving both the public and private services in a variety of areas. The sectors. The paper considers the role of provision of private intermediate care beds government in the light of these trends. It and private sector involvement with new does not seek to present a comprehensive forms of diagnostic and treatment centre or definitive account of the subject. Rather are just two examples of this trend. The it sets out to provide an overview and to possible franchising of the management of raise a number of issues for discussion at failing NHS hospitals to the private sector the conference. has also been discussed by ministers.

1. Background. Clearly both Australia and the UK are developing health care systems in which In both Australia and the United Kingdom the private sector is expected to play a far the roles of the public and private sectors larger role. A number of factors can be in health care are changing. In Australia, identified as contributing towards this there has been a dramatic increase in trend. private health insurance, increasing use of private finance initiatives in funding At the macro-economic level there has capital projects, greater pluralism in the been a growing acceptance of the limits to supply of services though co-location and growth in public expenditure. This is often similar initiatives, and a variety of expressed in terms of the adverse schemes involving the private consequences of public spending on management of public hospitals. In the overall economic growth (ie. crowding UK, private health insurance remains out) and taxpayers’ unwillingness to pay fairly static with around 12% of the additional taxes to fund higher levels of population with private cover. But on the public expenditure. In the light of these supply side, greater involvement of the constraints, and because health care is private sector is taking place on a number overwhelmingly publicly financed in most of fronts. The private finance initiative advanced economies, attention has turned

to ways in which private finance can be the new role of government if greater used to supplement public finance. At the devolution of decision making and political level, this movement has been pluralism in the supply of publicly funded reinforced by the (originally) new-Right services takes place? emphasis on individual responsibility and a preference for private sector solutions. 2. A new role for government.

At the micro-economic level, the case for a In its World Health Report 2000, WHO larger role for the private sector has been argues that health policy and strategies based on alleged public sector failings. need to cover the private provision of Public sector bureaucracies have been services and private financing as well as criticised as being inherently inefficient state funding and state provision. Only in and unresponsiveness to user needs. This this way, it maintains, can health systems was a constant theme of UK government as a whole (italics added) be orientated policy from the 1980s onwards. It gave towards achieving goals that are in the rise to a succession of privatisation public interest. If this approach is adopted, schemes and, eventually, the 1991 NHS WHO argues that government has a crucial internal market reforms. The private sector role of stewardship. is currently seen as a source of management expertise, entrepreneurial As a steward of the health care system, skill and additional capacity that can all be government must assume ultimate used to improve health care services. responsibility for the overall performance of the system. It will need to ensure A closely related development has been coherence and consistency across the growth of private sector-style departments and sectors. But in doing so, management methods within the public its role is one of oversight and trusteeship. sector. This has been dubbed the ‘new Put another way: it needs to row less and public sector management’ with its steer more. emphasis on financial devolution, explicit standards of measuring performance, clear In its report, WHO identifies three key identification of the relationship between tasks of stewardship: namely, inputs and outputs, increased accountability, belief in the superior • formulating health policy – efficiency of private sector management defining the vision and direction, methods and the use of contracting-out and competition in the production process • exerting influence – through (Jackson and Price, 1994). regulation and advocacy,

Both the macro and micro-economic cases • collecting and using intelligence. for greater private sector involvement have been holy debated. The UK experience Given the space constraints of this paper, with the private finance initiative provides most of the remaining discussion focuses a good example of this type of debate on the regulatory role of government, (Sussex, 2001). But it is not the aim of this although some brief consideration is given paper to rehearse these arguments. Rather to the other two tasks. it starts from the position that changes are underway, and discusses the role of Formulating health policy government in relation to these changes. Most of the discussion centres on the As governments relinquish hierarchical, micro-economic question; namely, what is command and control approaches, and

devolve increasing responsibility for the that it once expected to leave to the provision of services to local providers discretion of local management. (both public and private), so the need for a The dilemma is that without national health policy framework becomes substantial operating freedom, even stronger. This framework will need to trust management cannot be set out the general values that the health expected to produce better care system is expected to embody and to performance...but that with such specify national objectives. The NHS Plan freedom there is bound to be and the subsequent paper Delivering the diversity of behaviours and NHS Plan are examples of documents that performance. The existence of seek to fulfil these functions in the case of outliers is then seen - by press, the UK. In the context of our discussion, it auditors and politicians - as a is relevant to note that the NHS Plan cause for central regulation’. expresses a commitment to pluralism in (Smee, 1995, p.190). the supply of services and also devotes considerable attention to the desired The dilemma surrounding political balance between local autonomy and imperatives is likely to intensify as public national standards. With greater emphasis finance is increasingly used to fund on devolution of decision-making, the privately provided services. national level is also the place where important population based objectives - Exerting influence – regulation. such as reducing inequalities in health and pursuing public health programmes – need It is generally accepted that market failures to be specified (Robinson and Dixon, within private health care markets will 2002). prevent them from achieving an efficient allocation of resources. Asymmetry of Of course, the history of health policy is information between patients and littered with national planning documents providers (leading to supplier-induced that have failed to bring about intended demand) and the existence of spatial changes, most notably because of failures monopoly in hospital provision are two of local implementation. This poses a widely cited market failures. In addition, a dilemma for governments in their quest to private market system is unlikely to row less and steer more, especially when achieve the equity objectives (eg. in terms the ultimate responsibility for performance of access to health care) that most of the system is centralised. The dilemma governments accept as desirable. Thus for was summarised by Clive Smee, when reasons of both efficiency and equity, Chief Economic Adviser at the English governments around the world have Department of Health, in the following subjected the health care system to tight terms: regulation. Indeed, in many countries, government intervention has gone even ‘ministers and the centre are further and replaced both private finance finding it difficult to reconcile and provision with state finance and devolved accountability with the provision. demand for detailed monitoring created by parliamentary interest However, as was pointed out earlier, in operational issues. In increased emphasis on government consequence, the centre is drawn failures, particularly on the supply-side, into a whole range of issues, from has given rise to waves of privatisation, hospital catering standards to the introduction of greater contestability or freedom of speech of hospital staff, competition through sub-contracting to the

private sector and decentralisation of involves the adoption of centrally decision-making through the creation of determined prices based upon diagnostic quasi-markets within the public sector. related groups (DRGs). This system was What implications do these trends have for first introduced in the United States during health sector regulatory activities in the the 1980s as part of a Medicare three main areas in which they take place: prospective payment system designed to namely, the regulation of capacity, price control costs. Since then a number of and quality? countries have adopted this general approach, with the Australian system Regulation of capacity is traditionally seen about to be adopted in Germany. In the as necessary to avoid supplier-induced UK the move to nationally specified prices over-supply. Countries such as the United based on health related groups (ie. a States (with for-profit private providers) variant of DRGs) is meant to avoid the and the Netherlands (with not-for-profit protracted negotiations over prices (costs) private providers) both have extensive which characterised the internal market of experience of legislation designed to the 1990s and to focus competition among restrict private sector expansion in cases providers on quality. where it is dependent on public funding. For the most part, however, such The adoption of centrally specified, DRG- regulation has been rather ineffective. based prices means that all providers face uniform prices. The theory is that this Avoidance of controls seems to have been provides them with incentives to reduce widespread. In the light of this experience, costs as any excess of price over cost it would seem unwise to rely on this accrues to the provider as a surplus. mechanism to control the growth of Ultimately, as in a market system, those capacity within a more mixed economy. providers that are able meet the yardstick price will flourish whereas less efficient There is, however, one area in which this ones will be under the threat of form of regulation is currently important. bankruptcy. In those systems where there This concerns health technology is substantial unit cost variation prior to assessment agencies (as found in, for the introduction of yardstick competition – example, France, Sweden, the Netherlands as in the UK – the ordered transition to the and the UK) and the ways in which they new system will obviously take time, if seek to influence the take-up of health care politically unacceptable hospital closures technologies among providers. Given the are to be avoided. In short there needs to rate of technological advance in health be a balance between the competitive spur care, and its cost implications, this would for greater efficiency and the maintenance seem to be an area where continued efforts of a socially and politically acceptable will be made to regulate supplier-induced configuration of hospital facilities. The expansion. In this connection, the Australian experience with this trade-off Australian experience with the ‘fourth- should be of great interest to a UK hurdle’ for public reimbursement of audience. pharmaceutical expenditures is being watched with interest in many other In the United States, the DRG-based countries. payment system has been applied to private hospitals as part of the prospective On the question of price regulation, both payment system and also as part of the Australia and the UK have recently move towards managed care. Whether introduced, or are moving towards, a form these hospitals can be incorporated within of yardstick price competition. This the same system as public hospitals in

those health care systems where public How will these tasks be carried out in a hospitals dominate is unclear. On the one more pluralist system? Can common hand, the case for a level playing field systems of monitoring and audit apply between the public and private sectors is across sectors? How will clinical clear. On the other hand, different case governance develop in the private sector? mixes and cost structures between the two sectors could pose problems. Collecting and using intelligence

The regulation of quality probably poses Markets generate information. It is no the most important and, at the same time, coincidence that the US health care the most difficult regulatory challenge. system has more advanced information Quality has a number of dimensions systems than any other health care system relating to structure, process and in the world. On these grounds, there is no outcomes. In the UK, the newly formed reason to fear the growth of pluralism. On Commission for Health Care Audit and the contrary, it can be expected to enhance Inspection (CHAI) will play a central role the information that patients, in particular, in the drive to monitor and improve quality have at their disposal. standards at hospital and primary care trusts. However, current measures of But there are some aspects of information performance are overwhelmingly focused and intelligence that have a more ‘public upon structure and process rather than the good’ quality and which therefore ultimately more important measure of individual provider organisations cannot outcome. A key challenge facing policy- be expected to generate and disseminate. makers in this area will be to bring Government, in its stewardship role, will together the work of the more micro, need to take responsibility for collecting research-based health outcomes movement and using this information and with the institutional structures (such as intelligence. Within this category, WHO CHAI) being developed to improve quality includes information on priority setting, in every day service provision. patients’ rights and broad population- based measures of health system On a more operational level, agencies variations. such as CHAI need to reconcile their monitoring and audit function with the 3. Concluding comment. need to motivate and actually improve performance This raises the thorny issue It is well known that health systems need of whether regulators can both police to meet multiple objectives. The provider organisations and discharge a underlying objective for most systems is developmental role. The question also usually taken to be the maximisation of encompasses the major challenge of health gain. But others include: efficiency improving the quality of clinical practice in the use of resources; equity in the through clinical governance. As we move utilisation and finance of health care; from a world in which professional self- maintenance and improvement of service regulation played a major role into one in quality; responsiveness to user needs; and which clinical professionals are expected acceptable systems of accountability. to be more accountable to external bodies Meeting these objectives is a complex for their actions, a host of issues task. There are often trade-offs between surrounding professional acceptance, them which mean that questions of balance morale and, crucially, implementation in need to be addressed. There is no reason in practice, arise. theory or practice to suppose that individual actors or organisations (public

or private) will reach an acceptable balance if they act completely autonomously. A laisser faire system will not deliver. Recognition of this fact has established the long standing case for government regulation of the health sector. With the growth of more pluralist systems, this case remains valid, but the ways in which regulation is carried out need to be reappraised.

References

P. Jackson, C. Price (eds) (1994) Privatisation and regulation: a review of the issues. London: Longman.

R. Robinson, A. Dixon (2002) Completing the course. Health to 2010. London: The Fabian Society.

C. Smee (1995) ‘Self governing trusts and GP fundholders: the British experience’ in R. Saltman, C. von Otter (eds) Implementing planned markets in health care. Buckingham: Open University Press.

J. Sussex (2001) The economics of the private finance initiative in the NHS. London: Office of Health Economics.

World Health Organisation (2000). The world health report, 2000. Health systems: improving performance. Geneva: World Health Organisation.

Management of Diverse Health Economies

Philip Davies

Philip Davies is Deputy Secretary of the Australian Government Department of Health and Ageing

This year’s Australia/UK Bilateral significant developments in the health care Meeting focuses on the design and arena: the growing technological management of changing health sophistication of service delivery; and the economies. A key consequence of change formal collectivisation of health financing. in the two countries’ health economies is greater diversity, both within each The first of these, growing technological country’s system and between the two sophistication, meant that many aspects of systems. health care could no longer be essentially a ‘one-to-one’ activity. The equipment that This introductory paper seeks first to was necessary to deliver modern explore some of the reasons for, and diagnostic and treatment services was manifestations of, diversity in modern costly and thus access to it had to be health economies. It then explores some shared among communities. Furthermore, of the challenges that diversity presents for the emergence of those new technologies those who use, deliver and manage health led to increasing specialisation of services. knowledge and hence of labour. It was no longer possible for a single practitioner to The emergence of health systems gain mastery of all available techniques and as a result individuals needed to access Organised health systems, as we would multiple service providers during an recognise them today, are a relatively episode of care. New technologies also recent phenomenon. Mankind has sought created new risks, and so the need for to alleviate the pain and suffering formal regulation of health services and associated with ill-health, and indeed to those who delivered them also increased. prolong life itself, since time immemorial; and a vast array of treatment and As health care grew in technological preventive approaches have emerged with sophistication it also became more that aim in mind. However, it is only expensive and individuals and families within past 100 years or so that the many were exposed to greater levels of financial different components that contribute to risk. As a result, new approaches evolved protecting and improving health have been to enable those risks to be spread among brought together into organised systems. larger population groups. The result was The organisations, regulations, and the now commonplace pattern of insurance established ways of working (collectively, arrangements based on taxation, social the institutions) that we now regard as insurance and private insurance which are making up our health systems are thus present, to some degree, in all quite young. industrialised countries’ health systems1.

The emergence of formal health systems 1 th In 2000 the share of health funding that was during the 20 century parallels two collectively controlled (by government or insurers) ranged from less than 20% in Georgia, Myanmar

Instead of being based solely on (with the establishment of Area Health transactions between individual consumers Boards in the late 1980’s), Hong Kong and individual service providers, a great (which set up a separate Hospital deal of health care now involves third Authority in 1992) and the Australian party funders in some guise. States and Territories (through the development of models such as New South The emergence of systems to organise Wales’s Area Health Services) have funding and delivery of services can thus sought to distinguish the policymaking and be viewed as a natural consequence of regulatory roles of government from its these and other, broader, social changes. role in delivering health services.

Growing diversity Alongside such developments, most health systems have also retained a degree of In countries that adopted ‘Beveridge’ style diversity in service delivery roles. For health systems, with taxation meeting the example:- majority of health costs, governments played a dominant role in funding, • GPs have retained their private, self- regulating and delivering services. employed status in both the UK and Independent insurers and service providers Australia; retained, at most, a limited role. • charitable and religious bodies have In former British colonies, for example, a traditionally played a significant role central health department typically stood in delivering services for elderly atop a sizeable hierarchy of directly- people and people with disabilities; employed staff who worked in state-owned and facilities to deliver wholly publicly-funded services. Individual hospitals and clinics • private (for-profit or not-for-profit) might have had their own identity, but health insurance has continued to co- reporting lines were often to heads of exist alongside publicly funded cover professional services at regional or in most countries. national level with limited scope for direct local-level control of resources. During the past 20 – 25 years, however, health systems in many Western While such models remain in some less- democracies have undergone a further developed countries they are now evolutionary step with non-governmental increasingly rare. Recent years have seen and private sector service providers a growing recognition of the importance of emerging to play a greater role in both the local autonomy within the context of more funding and delivery of services. Figure 1 sophisticated national or regional illustrates, in the case of Australia, how the accountability frameworks. The founding ‘source and application of funds’ in health of the British NHS in 1948 was, arguably, was shared between the public and private among the earliest examples of such a sectors in 2000. ‘loosely coupled’ health system. More recently, countries such as New Zealand

and India to almost 99% in the small Pacific nations of Kiribati and Nauru. The proportions of collectively controlled health funding in Australia and the UK were 83% and 89% respectively. (Source: World Health Organisation. World Health Report 2002. WHO, Geneva)

• a changing mix between treatment and Figure 1: Funding and delivery of prevention – due in part to the need to health – Australia, reduce chronic disease, but also in an effort to contain future health care costs, systems now complement traditional curative services with efforts to prevent ill-health and/or to Private intervene early to minimise the (33%) severity of disease; Private (27%) • a new balance between institutional and ambulatory services – as new Delivery Public treatment and diagnostic technologies (36%) (including new pharmaceuticals) mean Public that more conditions can be treated in primary care settings; Public Private

(69%) (31%) • a continuing readjustment between Funding capital and labour – with sophisticated analytical equipment, computerised record keeping and, in the near future, There are many reasons for such robotics and nanotechnology, developments. They include a desire on changing the demand for specialist the part of governments to refocus skills in health; and resources away from direct delivery of services and onto core strategic and • shifting professional boundaries – direction-setting roles (“steering instead of which reflect factors such as rowing”); and a commonly-held (but increasing clinical sub-specialisation, frequently disputed) view that there are technologically driven de-skilling of many aspects of health service delivery some professional activities and where governments hold no natural higher levels of training for nurses and advantages over other providers. other allied health professionals.

The changing balance between public and Figure 2 summarises how such changes private sector involvement is just one are leading to more diverse health systems. example of increasing diversity within health systems. Others include:-

• a movement from acute to chronic disease – systems can now no longer concentrate just on addressing ‘one- off’ health problems and need also to be able to assist patients who may live with a chronic condition for many years2;

2 It has been estimated that 80% of the burden of disease in Australia is now attributable to chronic conditions.

Figure 2: Diversification in health

System ‘Traditional’ orientation Emerging diversity characteristic Î

Financing Public financing of services and capital Mixed public/private financing

Consumers’ needs Acute care dominates Balance between acute and chronic care

Service orientation Treatment focused Treatment and prevention

Service settings Hospitals and long-stay institutions Hospitals and ambulatory settings

Service inputs Weighted towards labour Labour and capital

Workforce Rigid and static demarcation of professional Multi-skilled and versatile boundaries

Furthermore such changes can in some Positive impacts might include:- cases have a synergistic impact. For example, in Australia, technologically- • access to a wider range of services and driven growth in (privately-provided) out- service providers – through the of-hospital services over the past 20 years involvement of more and varied has led to an increase in patient charges players in the sector; and, as a result, a change in the balance between public and private funding of • better health outcomes – as systems health. develop new capabilities and new services to respond more effectively to Taken together, changes such as these are actual and potential health problems; adding to the complexity of modern health systems. Indeed, at the risk of semantic • increased responsiveness – with new over-interpretation, the use of the term providers, new forms of professional “health economies” in preference to the practice and new service delivery more familiar “health systems” in the title modalities underpinning innovation; of the Australia/UK Bilateral Meeting could be seen to suggest that the level of • greater choice – by using private funds complexity in health has now reached a to purchase more timely and higher point where at least some of the (perceived) quality services. characteristics of an organised system are absent. On the negative side, possible adverse effects of increasing diversity could be:- What challenges does this growing diversity present for those who use, deliver • disorientation and uncertainty – as and manage our health services? familiar institutions and patterns of service delivery change; Users • a lack of coordination and increased Diversity in health systems can have both fragmentation (the flipside to access to favourable and less favourable an increased range of services and implications for service users. providers)

• quality failures – as a result of General practice is a case in point. inadequate communications, lack of Diversity in general practice might include standardisation, poorly managed allowing patients the freedom to consult interfaces and potential conflicts different GPs at will. That is currently a between different providers; and characteristic of general practice in Australia and, with the advent of walk-in • increased costs – as a consequence of clinics, is also increasingly the case in the new providers and new forms of UK. Such diversity no doubt supports the service falling outside the scope of goals of choice and responsiveness. It established funding arrangements. could, however, also be considered to be detrimental to prevention, early A key responsibility of governments is to intervention and management of chronic help the population to understand the diseases since different GPs might have impacts of increased diversity, to manage inadequate knowledge of and access to effectively the changes it brings, and to patients’ medical histories (an example of pursue actively strategies to overcome any poorly managed interfaces - as detailed adverse consequences. above). In fact, the development of electronic patient records offers the A current case in point from Australia prospect of reconciling choice and stems from the movement of high-tech diversity, on the one hand, with assured diagnostic and treatment services from the access to patients’ histories on the other. public (hospital) sector to (private) Figure 3 illustrates this possible IT-led ambulatory settings over the past 20 years. ‘middle way’. While that change has clearly benefited patients in many ways it has also exposed Figure 3: IT helping to manage the some of them to significant financial risk. risks and realise the benefits of diversity For example, total patient payments for CT services have grown by 250% in real terms over that period, with equivalent increases High ‘Traditional’ Potential IT- of more than 300% in both radiotherapy Aus general led ‘middle practice way’ and ultrasound costs. As a result of such spending, in 2002 more than 30,000 Degree of patient families faced out-of-pocket costs in choice excess of A$1,000 in respect of charges UK general levied above the Medicare subsidy level practice for GP, specialist, imaging and/or pathology services. Low Low High Level of knowledge of As part of its proposed Fairer Medicare patients’ medical histories package, the Australian Government is seeking to introduce new safety nets to The above examples suggest that, if protect people against such excessive out- changes are well managed, and there is of-pocket costs. good communication and consultation, it should be possible to minimise the In other areas, it may well be that the same negative impacts of increased diversity on technological innovations that are driving service users. diversity in so many aspects of today’s health systems can also be used to moderate its adverse effects in other areas.

Service providers large numbers of new providers emerged including many that set out specifically to To the extent that diversity in its numerous offer services tailored to meet the needs of guises leads to choice, competition and, that country’s indigenous Māori ultimately, to changes in patterns of population. Figures suggesting a more service it is likely to create both ‘winners’ than ten-fold increase in the numbers of and ‘losers’ among health care provider such providers are often quoted. Those organisations and within the health new providers were able to extend the workforce. range of services delivered by the publicly-funded health system, as well as Most people find the prospect of change offering new employment opportunities to uncomfortable, and health professionals health professionals and others, at least are no exception. Increasing diversity is some of whom may previously have had thus likely to create the same risks of little or no scope to practice in their disorientation and uncertainty among the specific areas of specialism. service provider community as among service users. There are plentiful So, from the service providers’ examples of individual providers and/or perspective, diverse health systems can be lobby groups organising to oppose changes both threatening and liberating. in the funding, organisation or focus of health systems when such changes are In contrasting the UK and Australian perceived to be prejudicial to their health systems it is also interesting to particular interests. question whether the greater diversity found in the latter (specifically in terms of Furthermore, diversity by its very nature organisational arrangements) can be linked challenges monopolies. Thus, in cases to differences in attitudes within the health where service providers have historically workforce. exploited monopoly positions to extract economic rents increasing diversity may It is clear, to an outside observer, that the lead to significant income reductions. British NHS is a very strong and visible Again, the end result might be significant ‘brand’ from an employment perspective. disquiet among those affected. Historically, it also provided a framework for standard national terms of employment As health systems become more diverse and for industrial relations, as well as they can also create opportunities, both for facilitating staff movement and new service providers to emerge and for redeployment. Even among those such as existing service providers to adopt new GPs who are not directly employed by the roles, or to extend their existing roles. NHS (but rather are contractors to it) the sense of ‘belonging’ to an organisation of A notable example arose as a result of far- such size and iconic status is no doubt reaching changes to health funding often a source, if not of pride, then at least arrangements made in New Zealand in the of feelings of community. early 1990s. Those changes meant that government subsidies, which had In Australia and other countries with previously been ‘tied’ either to specific similar but more diverse systems, there is publicly owned providers or to specific no single national health ‘service’ that is professional groups (such as GPs), were akin to the NHS. The country’s federal replaced by contract-based payments. structure, which assigns responsibility for Such payments could be made to any managing public hospitals to States and appropriate service provider. As a result, Territories while requiring the

Commonwealth to pay subsidies for diversity means that leaders need to work privately provided primary care, means more through informal and often loosely that NHS-like solidarity could never exist. structured processes of networking, Even within a single State or Territory negotiation and influencing rather than hospital doctors and GPs look to different being able to rely on the ability to issue governments in many aspects of their instructions and have them obeyed. That, professional life; and the fact that many in turn means that today’s health leaders aspects of professional regulation (eg need new skills and competencies. medical and nursing registration, regulation of pharmacy practice) are WHO coined the term ‘stewardship’ to primarily State and Territory describe the expanded role of today’s responsibilities gives still more health leaders. Although it is a term that opportunities for diversity in has gained currency in the health policy professionals’ attitudes and practices. vocabulary, it is not one which is yet well, or even uniformly, defined. While it is difficult to provide evidence of how such diversity plays out in practice it The World Health Report 2000, where the is likely that the multiplicity of concept first gained prominence, states employment arrangements in Australia that stewardship encompasses:- means that there is no (near-) monopsonist purchaser of labour as might be • formulating health policy which encountered in other systems. It is defines the vision and direction for certainly the case that employment health; conditions for health professionals employed by one jurisdiction are cited in • exerting influence through regulation negotiations with others. and other means; and

It is also interesting to speculate whether • collecting and using intelligence greater diversity in employment relations Another definition1 suggests that might also give rise to subtle differences in stewardship comprises the following the balance between the ‘professional’ and activities:- ‘organisational’ loyalties of staff. Does the absence of a strong, national health • overall system design; ‘service’ (akin to the NHS) in countries • performance assessment; such as Australia leave an ‘allegiance gap’ • priority setting; which is filled by professional bodies and trade unions becoming more prominent? • intersectoral advocacy; • regulation; and Leaders • consumer protection.

The keys to success as a leader (politician, An even broader characterisation is bureaucrat or manager) in today’s more provided by the report of a WHO diverse health systems are doubtless consultative meeting held in 20012 which different from those that existed under previous models. 1 Murray CJL Frenk J. A framework for assessing Today’s health systems have little in the performance of health systems. Bulletin of the World Health Organization, 2000, 78 (6): 717 - common with the former ‘command and 731 control’ systems, which were typically characterised by rigid hierarchies and rule- 2 WHO Global consultation on stewardship, Geneva, based approaches to management. Greater 10/11 September 2001

identified a total of 19 stewardship activities as detailed in Figure 4. Figure 4: Stewardship activities

• Establishing and institutionalising • Monitoring and evaluation of public transparency in management health

• Policy analysis • Policy formulation

• Development and promulgation of an • Defining and promoting a vision for over-arching national health plan health

• High-level investment and resource • Advocating for healthy public policies allocation decisions in other sectors

• Consensus building inside and outside • Encouraging dialogue between the health sector communities and the health system

• Strategic institution building • Regulation and enforcement

• Creating incentives • Synchronisation of health players

• Communication • Consumer education

• Intelligence gathering • Establishing, promoting and strengthening shared values and the • Policy evaluation and correction ethical base for health action

What seems to be clear from the foregoing is that stewardship involves taking a much broader view of health than is perhaps implicit in more traditional approaches to Figure 5: Leadership roles health system leadership. That breadth can be discerned in much current thinking on the roles, competencies and critical success factors for health sector leaders. Monitor Manage

In light of the above, we can consider the nature of the leader’s role in a diverse health system in relation to each of the three key areas of planning, managing and monitoring (Figure 5). Plan

attitudes to work, to family and to how we live as a society?

Perhaps the answer, in terms of how we plan our medical workforce, lies less in Planning developing more and better planning models and more in ensuring that the Individual service providers must, and do, health workforce of the future is better continue to prepare detailed operational able (and better supported) to adapt to plans for their specific areas of activity. change whenever and however it At the national level, however, planning in eventuates. contemporary health systems is more about setting out strategic directions and Likewise for other key aspects of our defining the ‘rules of the game’ than it is health systems; the leader’s role now is about developing detailed specifications less one of drawing and following a map for future patterns of service delivery. The and more one of defining the destination focus is more about establishing an and ensuring that the travellers have all environment in which the right things will they need to find their way towards it. happen rather than attempting to determine how, when, where and by whom those Managing things will be done. Managing a diverse health system also Increasing complexity, in health and in requires new skills. Service providers who broader society, is also changing the nature are not directly controlled are less likely to of the planning task from charting a path respond to direct commands. Rather, their for a health system to building robustness actions will be shaped by a more complex and resilience into that system. array of incentives, regulations and (professional and other) obligations. The medical workforce, for example, is an Accordingly, the contemporary leader’s area where traditional planning approaches management role is increasingly one of have clearly been found lacking. Despite shaping incentives, defining regulations many years of workforce planning effort and enforcing obligations rather than and the development of increasingly issuing instructions. A particular skill that sophisticated analytical approaches for is now required of many health care forecasting supply and demand, most leaders is that of specifying, in contractual western countries now find themselves or quasi-contractual (‘service agreement’) confronted with serious, if not critical, terms, what it is that they require a shortages of appropriately skilled medical particular provider to deliver. staff. But perhaps such an outcome is inevitable given the disparity between the It is, however, possible to overstate the time it takes to produce a qualified doctor ‘arms length’ nature of management in a and the pace of change both in treatment modern, diverse health system. Regardless technologies and in social attitudes. Can a of the extent to which decision-making ‘long-cycle’ process such as conventional (and responsibility for its outcomes) is medical training ever be expected delegated the public will typically continue accurately to track the impacts of the to hold their government responsible for increasingly ‘short-cycle’ processes that the performance both of the system as a underpin not only the ways in which we whole and of individual components seek and receive health care but also our within it.

This point is again exemplified by symptomatic of the hunger for experience in New Zealand, which has so comparative performance information. often been the laboratory for health system experimentation in recent years. There, Increasing diversity has had an impact moves were made to distance government both on the ‘how’ and the ‘what’ of from decisions both on what services performance monitoring in health. should be provided (by establishing What was once often a straightforward (if separate ‘purchasers’ at arm’s length from somewhat cumbersome) process of government) and on what part the public hierarchical reporting in most health sector should play in delivering them (by systems has now become one of agreeing setting up public hospitals as stand-alone appropriate performance expectations for state-owned companies). It was assumed different aspects of the system and then that the role of government would reduce developing information systems that can to one of broad goal definition, provide accurate and timely data on performance monitoring and regulation; achievements against those expectations. and consequently its engagement with the Once again, new skills are needed to public would primarily focus on such specify, collect and interpret performance broad, strategic issues. In the event, data. however, the public obstinately (but understandably) insisted on continuing to Likewise, in terms of the data themselves, hold the government to account for all changes in approaches to service delivery aspects of the system’s performance, both are forcing health leaders to rethink how micro- and macro-. they measure achievement and success. To cite just one simple example, perennial While it may be appealing to subscribe to measures of resourcing such as hospital the view that governments’ role in health beds per capita and doctor/population system management is now one of steering ratios are becoming increasingly irrelevant rather than rowing it seems clear that, in as, respectively, more services are the minds of the public at least, delivered on an ambulatory basis and, in government should continue to have at some systems at least, tasks that once least a light touch on the oars. required the involvement of a doctor are now safely and effectively assigned to Monitoring nurses or paramedical staff.

Monitoring health system performance can Greater diversity has undoubtedly brought be seen as completing the feedback cycle with it greater sophistication in approaches of management (with the results of to monitoring the performance of health monitoring being used to shape plans for systems and their component parts. That the future). is due, in part at least, to the fact that the decoupling that now exists between The task of monitoring in diverse health players within health systems means that systems presents particular challenges. information requirements and reporting Typically, there are more players and a arrangements have to be specified in broader range of services to be monitored; greater detail. Health leaders are no longer and there are higher expectations of masters of all they survey, with access to openness and accountability. The any and all information produced with the emergence of initiatives such as the systems they oversee. Rather they are performance assessments carried out by obliged to specify what they will monitor the Dr Foster organisation in the UK are and how they will do so.

Modern, diverse and decentralised health commiserate with such a country on the systems are often contrasted with the grounds that its health system is starved of original and highly centralised design of a vital resource? the NHS in which, according to Aneurin Bevan, the sound of a dropped bedpan in Indeed, it is issues such as the above that Tredegar Hospital would reverberate underlay the moves by WHO to develop around the Palace of Westminster. But the approach to health system performance diversity does not equate to disinterest and, assessment outlined in the World Health in reality, contemporary monitoring Report 2000. By focusing on five arrangements would probably ensure that ‘universal’ goals, it was claimed, the data on dropped bedpans were routinely WHO approach offered a more sound collected, stored in a powerful basis for inter-country comparisons. At management information system and, if the same time, however, it generated not routinely reported to Westminster, considerable controversy because it meant could at least be accessed if and when the that WHO was taking a position on what need arose. health systems should be trying to achieve; a normative role that is rarely adopted by Of course, monitoring does not just UN agencies. The WHO approach was involve looking at what is achieved within notable also for its use of an analytical a health system, but it can also extend to technique known as frontier analysis to encompass comparisons of what is ensure that health systems were compared achieved among different health systems. on a like-with-like basis, making Increasing diversity means that the allowance for differences in countries’ countries of the world now provide us with GDP and level of development. numerous models of how health systems can be designed and operated. Indeed, the Ultimately, WHO’s work on health system past 25 years of health reform can be performance assessment aimed to establish viewed as a large-scale natural experiment an evidence base on what works best in in which various approaches have been health system design and operation. In tested. The fact that there is still no clear essence it sought to formalise the natural consensus on what works best is experiment of health reform by using the undoubtedly testimony both to the diversity of health systems to develop and underlying complexity of health policy and test hypotheses on the relationship to the relative lack of sophistication in between how the key functions of a health evaluation methods. system are undertaken and how well that system performs. Whether such a goal Traditionally, comparisons of health could ever be achieved, given the vast systems have focussed on a few key array of ways in which health systems can measures of resource inputs and service and do differ, is questionable. outputs. In the case of the OECD countries, for example, such data have Conclusion been systematically collected and disseminated on an annual basis for many Organised health systems are a relatively years. In light of the observations above, recent phenomenon and, during their however, it is questionable whether such existence, they have become steadily more comparisons are still of value. Should we diverse. Today, most health systems congratulate a country that has a lower encompass a broader range of providers, than average ratio of hospital beds to head delivering a greater mix of services and of population for moving away from costly drawing on a wider variety of funding institutional services? Or should we sources than ever before.

Diversity adds complexity, which in turn may present challenges to those who use, deliver and manage our health systems. At the same time, however, diversity can enhance choice, offer opportunities for innovation and provide a fertile test bed for developing and comparing new ways to organise and deliver health care.

Perhaps the greatest risk of growing diversity is its potential to create disorientation and uncertainty among those who use and deliver health services. Accordingly, one of the main challenges for those who set health policy and are responsible for its successful implementation, is to act as effective change managers: to explain the rationale for new ways of organising and delivering health care; to demonstrate their benefits; and to address any fears that they might generate.

Decentralisation: Promise and Problems

Roger Wilkins and Scott Greer

Roger Wilkins is Director –General of the New South Wales Cabinet Office Scott Greer is a Research Fellow at the Constitution Unit of the University College London

I.Promise run concurrently. More jurisdictions also means that it is more likely somebody Why is decentralisation a good thing in somewhere is experimenting. Finally, it politics and policy? It certainly seems to can be hazardous to experiment with be such; a majority of countries around the policies across the whole country, runs the world from Britain to Peru are creating or argument; instead, ideas can be tested in strengthening regional levels of particular jurisdictions and adopted if they government while across broad swathes of prove good. public policy in many countries the centre is promising to devolve power and take a The third argument is from efficiency. The step back to let the local level work with logic of economists also suggests that less constraint. There are three tested decentralised provision of public services arguments suggesting that this can be good: they argue that providing the regionalising trend is happening for good same service everywhere, according to the reasons and that it can produce desirable same rules, is likely to underprovide in effects. some areas, overprovide in others, and sometimes miss the point. The UK’s major The first argument is from democracy. The hospital building programme of the 1960s, argument is simply that some jurisdictions for example, was designed to provide the have different preferences. Scotland and same health services across the whole Wales would never have elected Margaret country (so that, for example, local areas Thatcher, and her policies had less would all have the same ratio of hospital resonance and less popularity there than beds to population). It found that areas they had in England. The experience of with poor health were underprovided and having their preferences routinely some areas almost overprovided—equal overruled by London, by a government provision did not mean equity. Had seen as English, convinced the political hospital resources been allocated locally classes of Scotland and Wales that they they would have better suited the needs of would like autonomy. It is not hard to the population. argue that communities such as the Scots have different preferences and good II.Problems political institutions allow them to express them. Nevertheless, decentralisation can go wrong and there are specific mechanisms The second argument is from policy. This that lead to recentralisation. What can go argument makes states and other wrong when we try to gain the advantages decentralised governments what the of decentralisation? What kinds of American justice Louis Brandeis called the institutional and political problems can “laboratories of democracy.” More emerge? jurisdictions means more experiments can

The United Kingdom has a short history of the best outcome for citizens, including the constitutional devolution and a poor advantages of federalism we have referred history of devolution to local government. to? Northern Ireland, Scotland, and Wales have only had their governments for five a. Australia years (and Northern Ireland’s self- government has been intermittent and A key issue in Australian federalism as it overshadowed by the peace process). The relates to health policy is not only the history of local government and local self- degree of dominance of the government within the health services has Commonwealth, or the level of autonomy largely been a story of increasing of the States, it is also the dysfunctional centralisation. Governments arrive in split in responsibility for health between power intending to devolve health services the Commonwealth and the States. to the local level and leave the health system more centralised than before. The The Commonwealth has broad concentration of power and accountability responsibilities for medical benefits, in the government explains this pattern— pharmaceutical benefits (except in public the Prime Minister is routinely blamed for hospitals), general practitioners, university bad cancer treatment in Birmingham or an education of health professionals and aged unethical doctor in Liverpool, and the care funding. The States have broad centre correspondingly tends to intervene responsibilities for public hospitals, at the local level. Neither the public nor accreditation of private hospitals and aged the political class focuses on the local or care facilities, and health professional regional boards and managers, and the registration. This split of responsibilities managers lack the democratic or leaves the Commonwealth and the States professional legitimacy to stand up against open to ‘cost-shifting’ from one centralisation. Therefore, the problem for jurisdiction to the other. Given the size of the UK is creeping recentralisation. It is health budgets, cost-shifting, and its an open question whether the new prevention, dominates health policy devolved governments of Northern interaction between the Commonwealth Ireland, Scotland, and Wales are capable and the States. of resisting the temptation of voters and politicians alike to concentrate on the The following is a list of instructive executive in London. It is an even more examples of how this problem manifests: open question whether local government or new local units of the health service can • First point of contact’ services ever be more than rubber-stamps for provided by emergency departments Whitehall—no matter how convinced and by general practitioners are the Whitehall might be that they should be responsibility of State governments otherwise. and the Commonwealth government respectively. State governments argue In Australia there has also been a process that Commonwealth government cost- of centralisation of power since federation containment policies which affect the in 1901. But the central issue confronting number and availability of general Australia now is how to share practitioners have an effect on demand responsibility in key areas of policy and for emergency department services service delivery, not whether to share with many patients presenting at power. How do you configure roles and emergency departments with ailments responsibilities for health, education, better dealt with by general security, the environment, etc, to provide practitioners. This shifts the costs of

primary care onto State government as as part of a patient’s public hospital well as shifting political pressure onto treatment but under the the States. Commonwealth Pharmaceutical Benefits Scheme patients are required • States also argue that the to make a co-contribution. Cost- Commonwealth is not providing shifting occurs at the transition points sufficient primary health care funding as patients with ongoing (for general practitioners and pharmaceutical needs move in and out community health care) to adequately of public hospitals. meet the needs of patients with chronic conditions like cancer and mental • Workforce issues lie across the health conditions. This increases dysfunctional split of responsibility demand for hospital services and shifts also with the Commonwealth funding costs and political pressures onto the education of health professionals States. through the university system and the States being responsible for • The transition between acute care and professional registration and generally aged care is also problematic. States being the larger employer of health argue that there are a large number of professionals. In effect, the aged people in acute (hospital) care Commonwealth controls the number of when they should more appropriately nurses, doctors and other professionals be in aged care facilities. This means available to the system and thus the that the costs of the care of these aged capacity of the system. However, the people have been shifted onto the political pressure resulting from States with the additional problem of workforce shortages falls the people tying up resources and disproportionally on the States. artificially inflating demand for hospital services. The Commonwealth is responsible for regulating private health care and private • Access to elective surgery in public health insurance. The States argue that hospitals is another area of dispute. Commonwealth policies in this area The Commonwealth is responsible for undermine health system cost-containment paying medical benefits to cover part strategies by increasing resources available of the costs of surgery in private to the private health system. This hospitals and day care facilities (with increases wage demands from health the remainder borne by the patient). professionals in the public hospital system, The Commonwealth argues that long a cost borne by the States. waiting times for elective surgery in public hospitals drive up demand for b. UK private surgery of this type, consequently driving up the The problem of decentralisation in the UK Commonwealth’s costs for medical is simple: the key political institutions benefits. exert a powerful centripetal force. The executive dominates Parliament and both • Funding for pharmaceuticals is also dominate press coverage; the result is dysfunctionally split as the States fund tough party discipline and a powerful pharmaceuticals in public hospitals political focus on the activities of those with the Commonwealth funding the few who inhabit the “Westminster remainder of pharmaceuticals. village.” Meanwhile, the doctrine of Pharmaceuticals are provided for free parliamentary sovereignty has teeth: local

government is financially dependent on gives great autonomy to three of its Westminster and can be reorganised by subunits (especially Scotland) and none at legislation, while the English NHS is all to England, which has 85% of the largely composed of organisations that can population. Scotland, for example, has be merged, abolished, reformed or powers over almost every aspect of health otherwise altered at low political cost and policy; there is effectively no regulatory that are on a daily basis subject to central framework constraining it. Furthermore, intervention. the three devolved countries are all funded by an overall block grant set by a What explains this inability to sustain a population-based formula. So long as the vital local or regional level of politics and UK Treasury is bounded by this formula policy? The problem is twofold. First, there is little discretion for central there are problems of resources. Neither government intervention in devolved local units of the health service nor local affairs by means of finance. Scotland, and government have the resources to vary to a lesser extent Northern Ireland and significantly; their responsibilities as Wales, are sealed off from formal defined by the centre and their obligations influence, and all three have already made to fund existing programmes mean that decisions known to be unpopular with the they have very little autonomy. Second, central government. They have also, there is the problem of local democratic however, also centralised their health legitimacy. Governments have always had systems yet more. problems endowing the health services’ local organisations with democratic This suggests that the UK has found a legitimacy, and the commitment of UK model that is capable of resisting governments to local democracy in the centripetal tendencies in its politics (it NHS has usually been half-hearted at best. does not follow that the Scottish or Welsh Local autonomy threatens national policies are necessarily better). That model standards and bad headlines that will is of a large, ideally national government attach themselves not to a largely with an identifiable political arena of press unknown regional health board or district and politicians and a range of policies so health authority but to the government. As that it can attract talent and attention and a result, the tendency has been to replace develop priorities out of its various local, geographic units with various competencies. The extent to which such a agencies that take over local government model could be replicated within England functions and to deprive the local units of can be questioned, since England is the health service of all but the most economically and socially centralised in minimal autonomy to tailor services to London, and the extent to which the local needs. Put simply, the government extreme autonomy of Scotland could be a writes the rules, holds the purse strings— model for a thoroughgoing and is under constant political pressure to decentralisation of the UK state is also use its power to standardise the local level questionable. rather than let it experiment. III. Conclusions and questions What, then, of “formal devolution,” ie. the creation of strong legislative or quasi- There are two challenges to any effort to legislative governments for Scotland, gain the benefits of decentralisation in Wales, and Northern Ireland? These public policy. The first is governments are in essence very recentralisation—that the central autonomous. The UK has adopted a very government, blessed with greater funds unusual form of devolved government that and autonomy, and sometimes legal

superiority, can effectively void the power and autonomy of the local levels. The second is cost- and blame-shifting behaviour when there are multiple players in health services. This means that if we are to reap the benefits of decentralisation while also providing quality services and sustaining citizenship rights, we must develop answers to some key questions:

• What forms of intergovernmental relations and finance mitigate problems of cost-shifting and blame avoidance?

• What degree of divergence in policy and performance will the public tolerate? To what extent should the central government police this?

• Does the very high degree of autonomy given to Scotland represent a generalisable model, or should the UK look to the more multilateral and negotiated order seen in Australia and other Commonwealth federations?

• Do the experiences of devolution to Scotland and Wales and Australian federalism suggest that England’s health service would work better if it were regionalised and run by democratically elected assemblies or boards?

Investment in Prevention and the Contribution of Population Health Policy to Improving Health Outcomes

Peter D Donnelly

Peter D Donnelly is Director of Public Health and Health Policy at the Lothian NHS Board holds an honorary Chair in Public Health at the University of Edinburgh.

Introduction the single most important thing that I am going to convey to the session is that Public Health can be defined in the Public Health is at its most effective and following way: influential when these three domains of health protection, health promotion and ‘Public Health is one of the efforts health restoration are integrated. In an organised by society to protect, attempt to illustrate and hopefully support promote and restore the people’s this argument I wish to deal sequentially health. It is a combination of with the following issues: sciences, skills and beliefs that is directed to the maintenance and • Investing in prevention improvement of the health of all the people through collective or social • The Public Health role of actions. The programmes, healthcare professionals services, and institutions involved emphasise the prevention of • The thoughtful design, regulation disease and the health needs of the and commissioning of health population as a whole. Public systems to promote health Health activities change with changing technology and social • Public Health Law values, but the goals remain the same: to reduce the amount of The first of these issues involves us in disease, premature death, and directly addressing the question of why we disease produced discomfort and should consider investing hard pressed disability in the population. Public healthcare resources in prevention. I Health is thus a social institution, a would argue that it is no longer good discipline and a practice’ enough simply to rely upon trite statements such as “prevention is better A Dictionary of Epidemiology edited by than cure” or to make unsubstantiated John M Last, published by The assertions around the long-term benefits of International Epidemiological Association, primary prevention in the absence of 1988 supporting evidence. Rather we have to bring increasingly to the field of Public Health is thus by definition multi- prevention the disciplines of evidence professional, cross-agency and equally based practice and health economic concerned with the three domains of health analysis that have come to bear recently protection, health promotion and health upon the introduction of new restoration (or health service provision, if pharmaceutical and technological agents you prefer). My first message and perhaps into healthcare practice. Nor is it good

enough simply to argue that investment in cigarette smoking will be reflected in a prevention must be made as a statement of decrease in the incidents of lung cancer. faith or to rely on rather woolly evidence Indeed some have argued that wholesale of capacity building and raised awareness reduction in smoking prevalence may (at as proof of likely future beneficial impact. least in theory) lead to an initial increase in To be blunt about it, we need to bring to lung cancer as those who would have bear the same rigour that governs the use succumbed in the interim to myocardial of new entry pharmaceuticals and infarction live long enough to contract and technology and the same robustness that die from lung cancer. I hesitate even to would apply to the way that we manage note this, as I have no desire to be down an unacceptably long waiting list for misreported as the first Director of Public elective surgical procedures. Health to suggest that giving up cigarette smoking increases your risk of lung cancer We also must escape the idea that and that of course is not, I repeat not, the prevention is somehow different, distinct case but the example is salutary in terms of and divorced from that which occurs in the the complexity that one can get into in provision of healthcare services. In fact articulating the case for prevention. much of that which clinicians perform as part of their day-to-day jobs is best One of the American president’s, I think described as secondary and tertiary Eisenhower, is reported to have said that prevention. So the clinician who picks up politicians focus on the next election a middle age women’s osteoporosis as a whereas statesmen focus upon the next result of dealing with her fractured wrist generation. When I perhaps unwisely put and as a result ensures that future fractures this to the Scottish Deputy Health Minister are prevented or at least delayed is as he quite fairly made the point that unless involved in prevention as the community he focussed on the next election and got based worker encouraging elderly groups himself re-elected there was not much to maintain their calcium and vitamin D prospect of him ever becoming a intake and to undertake weight bearing statesman! Interestingly his political boss exercise as a way of reducing the risk of the health minister later went on to use the fractures. I shall return to this theme when same original quote when launching a I address the public health role of government white paper on the challenge healthcare professionals but perhaps of improving Scotland’s Health and suffice here to argue that prevention and tackling our marked health inequalities care are part of a spectrum of community (Scottish Executive 2003). But the serious and clinical activity rather than separate point remains and the challenge to us endeavours. involved in Public Health is how we help our politicians become statesman and to The Investment – Prevention Time Lag focus beyond the next election and rather on the next generation and therefore be It is important now to address specifically understanding and supporting of the need the single most obvious barrier to for a balanced programme which invests in investing in prevention in a mixed prevention as well as cure. economy system working within the liberal democratic tradition. I refer to the The argument for prevention can be long lead-time that exists between further complicated by the cross-agency investment and return. If we start with one and multi-sector nature of the investment of the better known and quantified that is required. Yet there is creditable examples it takes somewhere between 12 evidence that investment in anti-natal care, and 15 years before any decrease in early nutrition, parenting and early years

nutrition all have an important role to play permitting entry into parliament of parties in the establishment of health promoting who would not otherwise be represented in lifestyles in middle and later years a purely first past the post system. (Scottish Executive 2003). Undoubtedly the committee system that In this regard traditional political and civil operates in Wales and Scotland also service systems as arranged in ministerial appears to give rise to thoughtful and silos can be unhelpful. What are required considered debate and my experiences in are the sort of crosscutting initiatives that giving evidence to committees of elected explicitly acknowledge how decent representatives in England, Scotland and housing and environment, educational Wales is that the devolved bodies certainly attainment and employment opportunities appear to operate in a less overtly party have profound and fundamental effects partisan way at least in terms of evidence upon the attainment of good health. If you gathering. I appreciate these observations wish corroboration of this I would point are hardly scientific but the difference in you towards the health inequalities that the quality of experience was so marked continue to persist in our most affluent that I think it worth mentioning. democratic countries and which almost invariable mirror inequalities in terms of The Public Health Role of Health Care income, housing quality, education Professionals attainment and employment status (Leon et al 2003). I now should move on to my second topic, which is the Public Health role of Devolution and Federalism Healthcare Professionals. I wish to strongly argue that healthcare In terms of the theme of this conference it professionals are in a unique and would be interesting to explore whether privileged position in terms of their public federalism in the case of Australia or health capacity. The tragedy is they devolution in the case of the United probably to do not in a large part realise Kingdom helps or hinders the process of this. Let me give you two examples one encouraging such cross-cutting public from Australia and then one from the health promoting initiatives. My United Kingdom. If I can start with the impression from working in Wales and Australian example many of you will be Scotland, either side of devolution, aware of the legislation that now requires suggests that devolution has helped in this back yard swimming pools to be fenced in. regard. I am less clear whether this is a This legislation really arose in part result of; the more local nature of because of the campaign led by Australian democracy, the greater participation in paramedics who were becoming democracy that flows from a large number increasingly distressed at being called to of elected Assembly members in Wales or attempt to resuscitate drowned toddlers. I members of the Scottish Parliament north am in no doubt that the fact that the of the border, or perhaps most likely from advocacy came from these respected front the more consensual politics that has line health care professionals made their flowed in both counties because of the representations that much more effective. differing electoral systems from The results of their legislation fully justify Westminster. In the case of Wales and their actions. (Thomson & Rivera 2003). Scotland, the assembly and parliament respectively are at least to some extent My UK example is drawn from the field of proportionate with top up members in both oral maxillo facial surgery, a highly cases allowing a representation more specialised hybrid discipline encompassing reflective of the popular vote and qualification in medicine and dentistry and

higher specialist training in the field of with alcohol abuse rates, drug misuse and surgery to the face, mouth, jaws etc. A suicide rates amongst the medical large part of the emergency work in this profession being rivalled only by publicans specialty is as a result of trauma some of it and journalists. Unfortunately such abuse related to road traffic accidents but much appears prevalent amongst even recently of it related to violence. A UK colleague qualified doctors (Birch et al 1998) Never from Cardiff became increasingly aware the less my general point I think is that much of that violence was alcohol sustainable namely that healthcare related and indeed occurred on Friday and professionals are in a unique and Saturday night. Young people, largely privileged position to provide timely and young men, drinking too much alcohol focussed health promoting messages. with often the assailant and the victim They generally are regarded as a respected being equally inebriated. He also was source of information. They have the astute enough to observe that the capacity to lead by example and here lies a individuals returned to accident and further reason for not separating health emergency or out-patients OMFS clinic for promotion from healthcare provision. follow-up or to have stitches removed. During this procedure there was what he The Design, Regulation and has come to term a “teachable moment,” Commissioning of Health Systems when the now sober and reflective individual may be receptive to a skilfully Turning now to the third of my four given preventative measure aimed at subject areas, which is the need to avoiding repetition. However the really thoughtfully design, regulate and credit worthy aspect of this tale, is that he commission health systems in such way as then went on to demonstrate in a properly to promote health. The first rule that designed study that one could bring about medical students and junior doctors are a reduction in these individuals in problem encouraged to learn is first do no harm. drinking through such an appropriately We need to, I believe, apply that as timed carefully delivered intervention rigorously to the work of those of us who (Smith et al 2003). I think I as a Director design, regulate, commission and manage of Public Health could have spent many healthcare systems as we do to the work of fruitless years and unproductive hundreds individual clinicians. of thousands of pounds or dollars of tax payers money in less focused, less timely Let me explain; health inequalities and the interventions to reduce problem drinking disparity between health outcomes for rich with much less benefit. and poor in society may have their origins in unequal socio-economic and Finally in this section if I could return educational opportunity but they briefly to cigarette smoking. I do think it undoubtedly can be sustained and made is noteworthy that following the ground worse by the thoughtless design, breaking work of Doll and Hill (1951) in regulation and commissioning of health this area the medical profession did reduce systems. greatly their own smoking prevalence. This provision of example undoubtedly We know for example that there is almost catalysed change in the general population. always a “halo effect” around facilities of I am less clear that the same has happened highly specialised technical expertise with alcohol and the light-hearted remark which through so called provider drive that the definition of an alcoholic is means that access to healthcare can depend someone who drinks more than his doctor as much on geography as on need (Hull et has unfortunately some foundation in truth al 1997). Now of course geography is

relative and I still smile when I recall a up for the screening (Hurley et al 1994). discussion with an intensive care colleague This well known exception is a product of at the Sick Children’s Hospital in Perth, the presumed causality of the disease and Australia. I had just recounted the the effect of for example delayed child difficulties I was having in getting some bearing on hormonal mediators (Chie et al individuals in Swansea to accept that some 2000). of the highly specialist healthcare provision they needed may have to come Nevertheless as a general rule elective and from Cardiff 30 miles distant. He then preventative programmes are much more proceeded to draw the catchment area for likely to miss the mark in terms of his intensive care unit onto a map on his addressing need than programmes based wall and I recall the boundaries extending on an emergency response. If you don’t as far north of Papua New Guinea and in believe me I suggest you seek to spend all covering an area that must have time in a casualty department in a large approximated the size of Western Europe. urban area and then you will see all of life! I returned to South Wales – Old South Regardless of the specific presenting Wales that is – and used the comparison problem, those who attend include in shamelessly! disproportionate numbers the most needy in our society, those with socio-economic However the point that access can be and employment problems as well as based on geography rather than need I health problems, those most likely to be think has been demonstrated repeatedly. dependant on drugs and alcohol and those Interestingly the more you move away who otherwise find access to healthcare from emergency and acute services difficult. through elective services to preventative services then the more striking this inverse Yet lest I be misunderstood this is not an care law becomes. The inverse care law argument to move wholesale over towards you will recall was coined by a Welsh GP a reactive healthcare service although named Julian Tudor-Hart (1971) who undoubtedly the reactive capacity of the observed that access to healthcare services healthcare service can contribute to the appeared to be inversely related to need. previously mentioned opportunistic health That was not largely a product of promotion interventions. differential provision between rich and poor areas but rather the relative inability Rather it is an argument to think very of less socially adept individuals to carefully how we focus all our articulate their way successfully through improvements in healthcare. What I think the healthcare system. Examples of this we should do is apply what I would term a abound. The people who turn up for health inequality sieve to every substantial screening are often those least at risk of change in healthcare service provision. the disease. This certainly applies in terms of cervical cytology, health promoting Now this falls short of requiring a formal activities such as exercise, dieting regimes health impact analysis every time we want and smoking cessation initiatives to open a few more dialysis beds or argue (Goddard & Smith 2001). for some minor re-provision of elective surgical services. However if we were to Interestingly the one contrary example have the self discipline to consider what involves breast cancer where the the possible effects in terms of health epidemiology dictates that those most at inequalities might be every time such a risk of getting the disease ie. social classes changed was proposed much in the same 1 and 2 are in fact those most likely to turn way as some local government authorities

have for many years done this in terms of Rights in advance of its consideration by consequences, for racial and sexual Westminster. In addition, some years ago equality then I think we would at least I attended an excellent conference in avoid making the most obvious mistakes. Melbourne organised by the Australian Public Health Association which Public Health Law specifically focussed upon Public Health and Human Rights. Until that time it had That brings me to my final topic of the not been something that I had particularly four Public Health Law. I am not a lawyer considered and I was grateful to the and profess no great expertise in this area Australian Public Health Association for but I have given some thought not simply making me reflect on this matter. to what could be termed specifically Public Health Law but also to the legal I think there are two effects that I would framework within which much of public like to try and tease out. The first is the health is practiced. Of course Public direct rights based effect of such Health has a long-standing association legislative provision which for example with legal sanction. Historically often of will increasingly mean that the resource a rather punitive and authoritarian nature. allocation decisions of authorities I am thinking for example of laws and commissioning health services will be held regulations around quarantine and up to scrutiny and challenged if they are restriction of liberties (WHO 2002). found to be discriminatory in any way. I Vaccination or certification proving that think the inevitability of this is you have had the vaccination may in some increasingly understood and accepted and parts of the world prohibit you from is becoming seen as legitimate and attending school or even entering the positive. country. In some parts of the world carriage of a particular disease may debar However I think there is a less well your entry and often such legislative understood but perhaps in the longer term restrictions owe more to ill informed fear more profound effect of a progressive and prejudice than they do to any objective move towards a rights based culture as a defensible appraisal of true levels of risk framework for Public Health practice. To (Flahault & Valleron 1990). In many demonstrate this I would like to discuss countries these laws need rewriting and briefly the example of immunisation. some important work in this regard has recently been completed (Monaghan et al In particular the difficulties we have been 2003). having in the United Kingdom around measles mumps and rubella (MMR) However it is not that particular aspect of vaccination. Over the last five years or so Public Health legislation that concerns me there has been a well articulated but I but arguably perhaps the opposite end of believe scientifically unfounded concern the legal spectrum namely the growing that childhood immunisation with MMR concern with human rights legislation. maybe be linked to a number of diseases The Scottish Parliament as many of you including autism (Wakefield et al 1998; will know is a primary legislative body Taylor et al 2002; Black et al 2002). As a like Westminster rather than a body result MMR vaccination has fallen off and concerned with secondary legislation and for the first time in many years we are regulation like the Welsh Assembly. It is beginning to see sporadic cases of measles interesting to note that the Scottish (McBrien et al 2003). There is now a Parliament enshrined within Scottish Law genuine fear that a full-blown outbreak of the European Convention of Human measles could occur if immunisation rates

continue to fall. The response of the UK exposure to a small amount of industrial Department of Health has been to pollutant or naturally occurring carcinogen repeatedly assert that the scientific such as radon gas. evidence does not support any cause or link between MMR and any disease of The difference I think comes down to the childhood and whilst they have not banned unacceptability of imposed risk. Even if the import of single dosed vaccines of you were to accept the assertions made by measles, mumps and rubella they certainly the opponents of MMR that there is a have not facilitated any increased causal link between MMR and autism, (an provision of these agents in the way that assertion which I incidentally don’t proponents of split, rather than combined, accept,) then the absolute risk of vaccinations would request. developing autism as a result of MMR immunisation would be extremely small. There are interesting arguments on both sides. One depending upon the rights of I therefore think it is likely that part of the parents to choose to immunise their objection that many people have to children with single vaccines if they wish combined MMR immunisation is because and one on the government’s side around they place it in the mental box that is the worry that this would provide a period labelled ‘imposed risk’ and not in that of greater exposure to measles whilst which is labelled ‘voluntary risk’. Also in vaccination was incomplete (Ramsay et al part they are less prepared to accept risks 2002). My purpose is not to rehearse these on behalf of their children than they would arguments which could justify a session, in when deciding for themselves. and of, themselves. Rather it is to suggest that this whole debate is not unrelated to Where does this lead us in a policy sense? the growing rights based culture within What I think it means is that we have to which Public Health professionals have to give renewed consideration to how we act. To understand this I think we have to communicate risk and how we take and consider why it is that people are prepared implement policy decisions. People need to accept considerable risk when they feel to come to see immunisation as something it is entered into voluntarily and if they that they enter into voluntarily on an feel they have some degree of control informed basis as our partners rather than whereas they are absolutely not prepared our subjects. This is much harder of to accept any significant risk if they feel it course than just telling people to trust us. is imposed. As an example, cigarette But I think in a rights based culture where smoking over the course of a lifetime kills increasingly people have access to at least every second person who does it. An as good information as those who are average member of the public might not making decisions on their behalf then we understand the statistics to be as stark as have to seek to genuinely involve the that but they certainly know that it is a public as co-deciders and if you like co- highly risky thing to do and yet they investors in their own health. continue to it. Thus, whilst we must not underestimate the powerful confounding Now this does not of course mean that effect of nicotine addiction, many smokers there is no legislative component to Public would seem to regard smoking as Health. On the contrary there are many something over which they exercise good examples of legislation enabling or at discretion, control and choice. Yet that least reinforcing important Public Health very same member of the public may be initiatives. I mentioned earlier on in my utterly unwilling to accept a very low risk talk the fencing in of back yard pools. I consequent to for example an environment could have equally mentioned seatbelt

legislation or motor cycle helmet about what they eat and drink. We see legislation. In some cases the legislation is sugary carbonated drinks and fatty snacks absolutely required to drive changes in as a matter of choice rather than a matter population behaviour. In others it is of ill informed unintentional self harm. I largely a reinforcing measure which comes think the Public Health community can along after a population has started to and should be more demanding of local comply and of course there is a whole authority school boards or health political art of determining at what point authorities in the role they can play to take legislation which is restrictive of seriously their responsibilities in this individual freedoms is publicly acceptable regard. Similarly I think we need to look and therefore politically viable. The at planning legislation carefully. Another current debate in the UK includes that of a colleague recently remarked on how sad it possible ban of smoking in public places. was that the last fresh fruit and vegetables The fact that the Chief Medical Officer shop in one of Scotland’s major cities, called for such a ban whilst launching his Dundee, was about to be turned into 2003 report (Department of Health 2003) another amusement arcade. is itself suggestive of a changing climate of opinion. He was trying to think of loopholes in the planning legislation that might allow him However, there is a much wider field of to stop it. My questions is simply why legislative and political action, which we should he have to look for loopholes? need to consider in the context of public Surely there should be a presumption in health. If we return to my example of planning legislation in favour of the public Friday and Saturday night alcohol related good in public health terms. Hopefully a pub and night club injuries then new power of community wellbeing may undoubtedly legislation around licensing, facilitate this. opening hours, and availability of alcohol all contribute. As could specific Finally perhaps I can share with you one legislation around the type of glass used in amusing anecdote that a council colleague beer glasses and similar potential weapons. of mine told me about one of the poorer The fluoridation of public water supply is areas where we both work. We have been another effective and safe although running a joint initiative around improving admittedly controversial measure, which children’s diets specifically the provision could be adopted. Many would accept the of fresh fruit on a daily basis to local argument for the supplementation of bread schools. He declared at a recent meeting with folic acid and of salt with potassium that we were definitely making progress chloride. because the children in his area have stopped breaking into the local shops to More interestingly I think we need to buy sweets and were now breaking into the begin to tackle issues of public policy local shop to steal apples and bananas. which fall short of statutory legislation but which could never the less have a major Summary impact. I have covered the arguments for, and So for example a colleague of mine, Phil difficulties in, investing in prevention. I Hanlon, has pointed out that we don’t have stressed the crucial opportunistic expect primary school aged children to be public health role of healthcare competent to make major decisions around professionals. I have discussed the need their safety in terms of crossing busy roads for thoughtful design, regulation and yet we are content that they take decisions commissioning of health systems so that at

the very least we don’t inadvertently Flahault A & Valleron AJ. HIV and travel, no increase pre-existing inequalities in health rationale for restrictions. [Letter] Lancet. and finally I have briefly discussed not just 336(8724):1197-8. the role of the specific public health law but also the wider contribution that legal Monaghan S, Huws D & Na M (2003), “The Case For a New UK Health of The People and public policy initiatives can have in Act”. The Nuffield Trust, London.. improving health. Goddard M & Smith P (2001), “Equity of Throughout I have tried to reinforce the access to health care services: Theory and message that separating out health evidence from the UK.” Social Science and protection, health promotion and Medicine (53) 1149-1162. healthcare provision is unhelpful. Public Health is indeed at its most effective when Hull SA, Jones IR & Moser K (1997), it operates simultaneously in these three “Factors influencing the attendance rate at domains, when it is less precious about its accident and emergency departments in East function and is more focussed on London: the contributions of practice organization, population characteristics and outcomes and when it is prepared to cede distance.” Journal of Health Services & to others the credit when things go well Research Policy. 2 (1):6-13. and accept responsibility when more needs to be done. Such an approach is I think Hurley SF, Huggins RM, Jolley DJ & Reading essential if we are to turn our healthcare D. (1994). “Recruitment activities and professionals into health promoters, our sociodemographic factors that predict sweet thieves into apple thieves and our attendance at a mammographic screening politicians into statesman. program.” American Journal of Public Health 84 (110): 1655-8. References Leon, DA, Walt G, Gilson L (2001), “International perspectives on health Birch D, Ashton H & Kamali F (1998), inequalities and policy.” BMJ. 322:591-594. “Alcohol, drinking, illicit drug use, and stress in junior house officers in North-East McBrien J, Murphy J , Gill, D et al (2003), England.” The Lancet. Vol 352. “Measles outbreak in Dublin, 2000.” Pediatric

Infectious Disease Journal. 22(7):580-584. Black C, Kaye JA & Jick H (2002). Relation of childhood gastrointestinal disorders to Ramsay MR et al. (2002). Parental confidence autism: nested case-control study using data in measles, mumps and rubella vaccine: from the UK General Practice Research evidence from vaccine coverage and Database. British Medical Journal 325:419-. attitudinal surveys. British Journal of General

Practice 52:912-16. Department of Health (2003), “Health Check

- On the State of the Public Health.” Annual Scottish Executive (2003) ‘Partnership For Report of the Chief Medical Officer”, London. Care’: Scotland’s Health White Paper

Edinburgh, Stationery Office. Doll R & Hill AB (1950), ‘Smoking and Scottish Executive (2003) ‘Integrated Strategy carcinoma of the lung. Preliminary report.’ for the Early Years: Consultation Paper’ BMJ; ii: 739-748. Edinburgh, Stationery Office.

Chie et al (2000), “Age at Any Full-term Smith AJ, Hodgson RJ, Bridgeman K & Pregnancy and Breast Cancer Risk”. American Shepherd JP (2003).’A randomized controlled Journal of Epidemiology. 151(7):715-722. trial of a brief intervention after alcohol-

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Investing in Prevention and Public Health in Northern Australia

Robert Griew and Tarun Weeramanthri

Robert Griew is Chief Executive of the Northern Territory Department of Health and Community Services Tarun Weeramanthri is Principal Medical Adviser of the Northern Territory Department of Health and Community Services

We start agreeing strongly with Professor a small number of people with antibiotics Donnelly that we need to move away from to see definite benefits. platitudes. In this talk we will provide examples of where prevention is clearly However, public health is directed at the not better than cure. Then to argue instead health of often asymptomatic populations, that preventive and curative options must and the NNT is high though the cost of be seen as part of a continuum, and subject treating each individual is low. to the same evaluative calculus that asks, Immunisation is the archetypal low cost ‘What kind of intervention is proposed, public health intervention though many targeted at whom, in what fashion, for hundreds have to be treated to prevent one what benefit and at what cost?’ We will go adverse event. Muir Gray points out that on to present a number of other false forms of managed care represent a dichotomies where preconceived notions potential mid-point on the spectrum. can interfere with clear thinking– namely whole population versus high risk Whole population or high risk strategy? strategies for prevention, lifestyle versus drug strategies, and social versus medical So, then, if we accept the continuum determinants. We will also consider how a concept - how do we allocate resources range of such interventions can be across it? No one knows the precise combined in the environment of northern answer, but the decision must be informed Australia where we work, and then explore by good data where possible, rather than the politics of such an investment within made on purely historic grounds or on Australia’s federal system. wishful assumptions. To give one example: the 1999 National Health Priority Number needed to treat – the link across Areas Report on Cardiovascular Disease the care continuum estimated the percentage of coronary deaths that could be avoided in the Muir Gray in his textbook on Evidence- Australian population aged 35-79 years by based Healthcare posits clinical care and either the improved management of heart public health as two ends of a spectrum, attacks or by interventions targeted at three joined by the epidemiological concept of population groups – those with no history number needed to treat or NNT.1 Clinical of hypertension, hypercholesterolemia or care is for individuals who generally feel heart disease (Group 1 constituting 72% of ill, and the treatments offered are relatively population), those with a history of high cost but with a low number needed to hypertension or hypercholesterolemia but treat. One would hope that for pneumonia, no history of heart disease (Group 2 or for example, you would only have to treat 23% of population), or those with a history

of heart disease (Group 3 or 5% of population).2 Lifestyle or drugs?

Most public health practitioners would be If we now turn to the US Diabetes aware of Geoffrey Rose’s prevention Prevention Program data from last year to theorems, one of which says that ’a large illustrate the care with which we need to number of people at a small risk may give contextualise and interpret data. Over 3000 rise to more cases of disease than the small patients with impaired glucose tolerance number who are at high risk’.3 They would were randomised into three groups: then assume that since group 1 is the standard lifestyle advice (the control largest group (72% of the population), group), intensive lifestyle program or the even though the absolute risk is low, a drug metformin.4 The intensive lifestyle small decrease in risk would make the program aimed to reduce each patient’s most difference to the whole population. weight by 7% and to have them engage in However Rose’s theorems were 150 minutes of moderate physical activity formulated when we knew less about the per week. The trial was stopped after 3 co-occurrence and clustering of risk years follow up. The incidence of diabetes factors, and they need to be subjected to was 11, 8 and 5 cases per 100 person years empirical testing. in the three groups. The lifestyle program reduced the incidence of diabetes by 60% The authors of the NHPA report have and the metformin group reduced it by modelled, using data available to them, 30%, compared to the control group. what could plausibly be achieved with risk These are dramatic reductions and show factor modification in all the groups, and the potential for disease prevention, and through evidence based care in Group 3 the relative effectiveness of lifestyle with known heart disease, over and above change. However, when one looks at the what is being currently achieved. It turns intensity of the lifestyle program which out that the greatest gains are achievable in was taught in 16 one-to-one lessons Group 3, with a potential reduction of 17% followed by individual and group sessions, of all coronary deaths. Another 13% could one wonders whether most people would be prevented by focusing on Group 2, and prefer to take the drug and avoid the only 7% by focusing on Group 1. So, the education? The point here is that patient data here supports a high risk strategy preferences and their assessment of rather than a whole population strategy. acceptability need to be factored in to Interestingly, only 4% of all coronary policy decisions, and one cannot assume deaths can be prevented by improving the that the whole population is as enthusiastic acute treatment of heart attacks. 59% of about lifestyle change, and as antagonistic coronary deaths were not considered to be to medications, as trained public health preventable. One could argue with the practitioners! assumptions and the methods, but the point we are making is that, where Underlying or proximal (social or possible, it is good to have some data as a biomedical) determinants? starting point for decisions. In the Aboriginal context, our chronic disease We are used to seeing complex data suggests that the majority of the representations of the causal webs leading population are at moderate to high risk, so to ill-health, especially in the Indigenous that the very boundaries between high risk health and social determinants literature. and whole population strategies become And we do need to better understand the blurred. determinants and mechanisms of disease. But Leon Robertson, writing in Social

Science and Medicine some years ago, people. Standardised mortality rates are reminded us of the importance of about four times the national average, but employing preventive brooms of known the median age of death of around 50 years effectiveness that can be deployed against is the more salient figure that captures the often proximal determinants.5 Putting child human tragedy of premature death in the resistant caps on medicine bottles does not young and middle-aged. alter underlying child behaviour one bit, but saves lives. In fact the injury So what are the goals of health services in prevention literature is replete with such such a region? If we consider the examples (seatbelts, bicycle helmets etc). cumulative impact of the size of the This is likely due to the influence of Aboriginal population in the NT, the William Haddon, the founding father of incidence and prevalence of disease and injury epidemiology, who stressed that the diseconomies of scale faced by our though injury prevention seeks to identify health system, we do not have any room a sequence of events (or causal chain) for waste. Let me assure you – having leading up to an injury, it is ‘ideologically worked in a number of jurisdictions – if blind’ as to whether an intervention should one considers the humanity and ill-health be targeted at proximal, intermediary or of the Indigenous 28% of the NT underlying factors. It assesses all population seriously, the NT health system interventions on their effectiveness, is in a completely different boat to the rest. acceptability and population benefit. 6 In Aboriginal health, instead of using the There are two propositions that anchor our terms underlying and proximal, more often response. First, we cannot afford the false we use such terms as social and dichotomies referred to previously. Our biomedical, and much has been made in clinical responses must have an eye to the past of the inherent superiority of one population efficacy because of the very or other approach, usually argued on concrete realities of the disease burden we ideological lines. Perhaps we in the face, and equally our population Aboriginal health field have something to interventions have to deal with the learn from the ideologically neutral injury numbers of currently sick people in the prevention field. wider population.

The challenge of prevention in Second, to borrow from Nobel Prize Aboriginal and Northern Australia winning economist, Amartya Sen, we have to attend not only to efficacy in clinical Let me turn now to the area where we and population health terms, but to issues work. The Northern Territory is the most of human dignity and freedom. Sen has sparsely populated region in Australia, one argued that basic freedoms are interlinked sixth of the Australian continent, 1.3 and reinforce each other – access to health million square kilometres and 200,000 and education services can be seen as a people, 28% of whom are Aboriginal (with type of freedom and linked to political 40% of Aboriginal people being under 15 freedoms and economic and social years of age). Across Australia as a whole, opportunities.7 This set of freedoms is not the Aboriginal population comprise only just the goal of development, but also are just over 2% of the total population. So instrumental as a means of development. Aboriginal health is a mainstream issue, The same point has been made in many daily discussed in the NT, rather than a different ways by Aboriginal people in minority and sometimes peripheral issue as Australia, usually reflecting negatively on it can be elsewhere. Particularly so since their historic loss of dignity when health outcomes are so poor for Aboriginal confronted by health screening without

follow up, or a model of care that was myth of research exhaustion. And, more intrinsically paternalistic. seriously still, there is a tendency to a research timidity that can actually produce Let me give a local example – Menzies fairly large amounts of research that is not School of Health Research in Darwin, in of high quality and does not generate the conjunction with our department, is environment of rigour and intellectual currently carrying out a large scale challenge that the worst health problems in diabetes screening study for the Aboriginal the country deserve. people of Greater Darwin area. Remarkably this will be the first accurate Peter Morris, again from the Menzies estimate of diabetes prevalence in any School of Health Research, published a urban Aboriginal population. But it is paper in 1999 highlighting the remarkably much more than that. The project is low number of randomised controlled controlled by an Aboriginal Steering trials conducted in Aboriginal Australia.8 Committee, there are large numbers of He identified only 9 randomised controlled Aboriginal people employed and the trials, and 4 other non-randomised but screening is linked to improved clinical controlled trials. Only one trial had been follow up. Recruitment will take place conducted in adults, all the rest were in primarily by word of mouth through local children. I am told there are about 5 more family groups and be open to all 5000 or recent trials started since the paper was so Aboriginal adults in the area. written, but that does not change the overall conclusion. Morris writes, and we Interestingly it is also seen by local urban agree with him, that Aboriginal people are living Aboriginal people as a chance to be being doubly disadvantaged, first by visible. One of the problems of the poverty, and then by poorly evidenced Territory is that it is too remote, too health care. It is an example of the inverse frontier, and Aboriginal people are care law referred to by Professor Donnelly. mythologised as exotic and ‘other’, living A similar argument could be made that the (as 2/3 of NT Aboriginal people do) in quality of social scholarship in Aboriginal small discrete communities outside the health does not often enough get beyond major towns. But this same factor prevents ideologically constrained or constructed recognition that the largest Aboriginal statements of orthodoxy. As health community is within the sprawling urban research funders make more funds setting of Darwin, where they have available quality becomes more of a remained up until now largely invisible, challenge. especially to researchers and public health professionals. Balancing investment in Aboriginal health Thus an example of research that simultaneously promotes visibility and There is other strong evidence for the dignity. Research is indeed a bit of a hot inverse care law in Australia. We are topic in Aboriginal health, here as in the systematically underinvesting in other settler colonial nations of the West. Aboriginal health, and within Indigenous It is arguable that a lack of health research health we are failing to balance our is not the primary threat facing Aboriginal investment across the continuum from health – in fact that is undeniable. prevention to cure. John Deeble and others However, the story is more complex. have analysed health expenditures for Many, especially urban Aboriginal Indigenous people across all jurisdictions, communities feel their invisibility and State, Territory and Commonwealth.9 Per actively seek involvement, contrary to the capital total spending was only 8% higher

than for other Australians despite the and investment since. Although we are still almost four fold higher mortality rate. But in the process of implementation, the most of this expenditure (55%) was thinking in the strategy is one of the strong through mainstream hospital services, with points in the story to date and exemplifies under 25% invested in community health the important role of specialist leadership care. With respect to the two largest working with primary care providers. Commonwealth programs, Medicare benefits to Indigenous people per capita Many of the specialists in the NT practise averaged only 27% of the payment for in northern Australia because of their non-Indigenous people and Pharmaceutical commitment to improving access to Benefits Scheme payments averaged only services, and a high proportion take on 22%. This and other data have helped outreach roles direct to remote drive some systems changes since to communities, many hundreds of lesson this inequity, and increase kilometres away from their hospital bases Aboriginal access to mainstream in Darwin and Alice Springs. This has programs. It has also strengthened the case given them a deep respect for, and good for maintaining the 30 year history of understanding of, the workings of primary direct Commonwealth funding of care clinics, most of ours staffed by nurses Aboriginal primary care services, as a top and Aboriginal health workers, working in up for the poor performance of mainstream very modest circumstances, and supported primary care funding systems, although by visiting departmental medical officers. our federal system raises some issues here to which we will return. The personnel involved include a significant number of physicians, as one Flexibility in roles across the continuum might expect, and surgeons prepared to of care undertake visiting lists not only in rural hospitals but in more remote sites as well. The implications of our analysis for Even more interestingly is a move that has prevention in northern and Aboriginal been evolving and on which we will build health go to the importance of a critical to establish clinical streams to refashion disposition in policy, in service design and the role of these specialists in health in evaluation. We have opted for an strategy. Even the surgeons (in fact led by integrated approach to service design, with some of the surgeons) are advocating a clear evidence based guidelines and new paradigm of specialist care, where strategies supporting streams of care, in specialists move beyond one to one care which primary care and specialist staff and take responsibility for training and work alongside each other and unite the skilling up these primary care workers to structures of community health with the improve the overall standards in their leadership potential of the tertiary specialty across the NT. Instead of only structure. seeing patients, they have been quarantining time for activities like case In 1999, the NT launched its Preventable conferencing and care planning with local Chronic Diseases Strategy, that targeted providers, as well as education and the key diseases of diabetes, heart disease, developing protocols for management of hypertension, chronic renal failure, and common cases. Indeed, our specialists chronic airways disease in an integrated have provided enormous input into our fashion.10 It was underpinned by an standard primary care clinical guidelines evidence base that defined key result areas that are used across the NT. and best buys across the continuum of care, and has helped us focus our priorities

One of us has written elsewhere of the key strategies and hope we are now on the unifying concepts in the Aboriginal health cusp of moving beyond a privileging of coalition – a political sub-system of primary health care to the exclusion of interests that, while they fight with each attention to the role of the secondary and other, are highly invested in maintaining tertiary sectors. We are reforming our Aboriginal health discourse within certain acute services, among other things, to known parameters. Key concepts in this make them a source of leadership across sub-system rhetoric include Aboriginal clinical streams that include primary, community control and primary health secondary and tertiary prevention in their care. Both in fact are important policy ambit. precepts and both are supported by a wealth of World Health Organisation All of which brings us straight into the literature, from Alma Ata on. So let us be issue of federalism and our fractured clear we are not arguing against them. health system. And the question, ‘Where However, neither any longer have a sense does prevention sit in our federated health of self evident meaning. People argue system?’ about community control of Aboriginal primary health care without Federalism acknowledging that several participants in the conversation can simultaneously hold Public health is theoretically a State and different concepts in mind, while Territory responsibility, along with ostensibly agreeing. No one argues any hospitals. The Commonwealth funds more that primary health care is the key primary care – at least in theory – but has domain for action to improve Aboriginal also had a historic leadership role in public health but the weight of Commonwealth health. In fact the Commonwealth activity is in fact in primary medical care, government became involved in health not primary health care, albeit there are through the public health imperatives of now some encouraging signs of evolution. the global flu pandemic, and workers’ And in the State/Territory and community health issues, in the first decades of the last sectors there is an equally important lack century. The Commonwealth has stayed of clarity about the role of vertical involved even as its mandate expanded to programs within primary health care health financing and direct funding of provision. 11 primary care. In the latter decades of the last century the need for national In the Northern Territory we are now leadership in public health was driven by trying to take on these unresolved issues. State political conservatism in the face of We seek community ownership of communicable disease threats and the need programs and a sense of power for our for specific vertical funding programs, as communities of engagement, because that hospital funding pressures impacted on works. The commitment to community State and Territory public health capacity. empowerment is profound across our staff, in fact to a degree I found surprising as a The 1990s has seen a couple of important new arrival in the public sector in the trends. The Commonwealth has tried to Territory public system. And they are clear reform general practice to play a more that they mean primary health care when effective role in improving population they say it, not just some slightly reformed health outcomes, through setting up notion of general practise. We seek Divisional structures that link general evidence and argument about strategy practices across a region, and through because that works as well. We also seek funding incentives that reward specific fee integration of sectors around core for service items that link, for example, to

best practice cervical screening or diabetes diseases in the last few years (SARS and care. the anthrax scare are only the latest examples), one can only consider this a The Commonwealth had also, as we just risky underinvestment. Nonetheless an noted, built up a series of national vertical underinvestment identified through the public health programs, including for coordinated work of the new Partnership. example HIV, women’s health and immunisation, that had provided funds to But how well placed is the NPHP now to the States tied to specific outcomes in enter and influence the debate about health specific areas. In the second half of the resourcing across the continuum of care, 1990s, however, the new conservative and influence mainstream financing? We government in Canberra went through a would suggest that it is close to the limits (short lived) enthusiasm for a new of its effectiveness if it remains positioned federalism and untied much of its vertical as it is, and stamped if you like with the program funding. Instead it worked ‘public health’ logo. Our analysis has effectively with the States and Territories stressed the need to move beyond to set up the National Public Health outmoded and ultimately fatuous Partnership. The Partnership included distinctions between preventive and representatives from both levels of clinical interventions, especially for the government, and aimed to develop a most marginalised populations we in the national framework for public health health system serve. The problem is that action and clarify roles and responsibilities these services – the full spectrum of the in public health. This is, in fact, one of the continuum of care – are themselves unheralded reforms of the early Howard fractured between Commonwealth funding years. Seven years on, it is inconceivable sources and State and Territory ones. And to think of operating without such a the NPHP, though important, is stuck in structure. It has successfully required the the domain of public health. None of this jurisdictions to talk together and is helped by the swing away from a coordinate myriad national public health cooperative approach to Federalism, to a strategies, and it has tackled some combative and arguably heavy-handed one important public health infrastructure in the latter years of the current Federal issues like the need to update public health Government. legislation and address information and workforce needs. The challenge is not just to get clear who does what, nor to hold each other to It has also identified an imbalance in account. Rather we should ask, how we overall public health spending as a can support the refashioning of the proportion of total recurrent health continuum of care in the north while expenditure.12 Total expenditure by all public health remains still isolated from jurisdictions on core public health clinical service provision and while the activities during 1999-2000 was estimated health system as a fractured whole is both at $931 million. This represented just 1.8% internally and between its funding of total health expenditure. The three core sources? public health activities attracting the highest levels of expenditure were health Final comments promotion ($166 million), communicable disease control ($154 million) and Before concluding, I think it is worth immunisation ($153 million). Given the making a distinction between, on the one risks to people, industry and the overall hand, the argument for rigour and use of economy posed simply by communicable science and evidence, and, on the other

hand, a kind of conservative rejection of References social scholarship, qualitative research, indeed anything non biomedical. We do 1. Muir Gray JA. Evidence-based healthcare: not want to associate our argument with a how to make health policy and call for a return to old verities whether that management decisions. New York: be the ‘old’ public health, or a tradition of Churchill Livingstone, 1997, pages 11- medical professional dominance. 12.

2. Commonwealth Department of Health and On the contrary, much that has been Aged Care and Australian Institute of rigorous and powerful in Australia’s recent Health and Welfare. National Health public health experience has been based on Priority Areas Report: Cardiovascular a combination of social scholarship, Health 1998. Canberra: HEALTH and biomedical expertise and community AIHW, 1999. based participation and social action. For example, the effectiveness of Australia’s 3. Rose G. Sick individuals and sick initial response to HIV was based on an populations. Int J Epidemiol 1985; 14: 32- effective partnership between gay men and 38. the community organisations they 4. Diabetes Prevention Program Research established, and scholars and service Group. Reduction in the incidence of type providers across medicine, public health 2 diabetes with lifestyle intervention or and community services. Though metformin. NEJM 2002; 346: 393-403. uncomfortable for all parties at times, this partnership was the key to effective 5. Robertson LS. Causal webs, preventive political and social action, and good health brooms and housekeepers. Soc Sci Med outcomes, credit for which is now claimed 1998; 46: 53-58. with a disingenuous ease by all Australian governments. 6. Haddon WJ Jr, Baker SP. Injury control. In: Clark D, MacMahon B, eds. Preventive Challenging assumptions and being open and Community Medicine. Boston: Little Brown & Co, 1981. to changing roles will be threatening to some. Some health promotion 7. Sen A. Development as freedom. practitioners, for example, have raised New York: Anchor Books, 2000. concerns about WHO’s move to form a new Department of Health Promotion, 8. Morris PS. Randomised controlled trials Non-Communicable Disease Prevention addressing Australian Aboriginal health and Surveillance, seeing it as potentially needs: a systematic review of the narrowing the scope of health promotion. literature. J Paediatric Child Health 1999; But Colin Sindall, writing in Health 35: 130-135. Promotion International in 2001, invites a different response – seeing it as a chance 9. Deeble J, Mathers C, Smith L, Goss J, Webb R & Smith V. Expenditures on to bring health promotion in from the health services for Aboriginal and Torres margins, build new alliances and mobilise Strait Islander People. Canberra: AIHW, the mainstream resources invested in 13 1998 (AIHW catalogue no. HWE 6). health care. He poses the question ‘What 10. Weeramanthri TS, Morton S, Hendy S, would a health promoting health system Connors C, Rae C & Ashbridge D. The look like, and how could such a system be NT Preventable Chronic Disease Strategy achieved?’ That is the question with - Overview and Framework. Darwin: which we would want to associate Territory Health Services, 1999. ourselves.

11. Griew R, Sibthorpe B, Anderson I, Eades S & Wiles T. On our own terms: the history of Aboriginal health politics in Australia, in forthcoming edited collection, Diversity and Health OUP.

12. Australian Institute of Health and Welfare (AIHW). National public health expenditure report 1999-00. Canberra: AIHW, 2002.

13. Sindall C. Health promotion and chronic disease: building on the Ottawa Charter, not betraying it? Health Promotion International 2001; 16: 215-217 Sindall C. Health promotion and chronic disease: building on the Ottawa Charter, not betraying it? Health Promotion International 2001; 16: 215-217.

Evolution of the Private Finance Initiative: Squaring the Tax, Spending and Pensions Circle?

Michael Davis and Barrie Dowdeswell

Michael Davis is Chief Executive of Catalyst Healthcare Management Ltd Barrie Dodeswell is a visiting fellow at the University of New South Wales and Executive Director of the European Union Health Property Network

Introduction individual choice amongst sickness funds, and in Spain ‘public’ companies have been This paper looks at the (uneven) trajectory created to provide public hospital services. of development of UK Health PFI in a sea of wider change; considers issues posed by The UK and Australia have made similar increasing emphasis on devolution of shifts - the retention of policy decision making, informed patient choice, determination by government but diversity implications of new (whole systems) in implementation - incorporating forms of models of integrated care and matching all purchaser provider separation and a mixed this against the lifecycle needs of people. economy of providers. One of the It makes the link between ‘public’ important outcomes of this policy in the borrowing and private pensions and UK has been the Private Finance Initiative savings - as a means of accelerating the (PFI) as a means of stimulating capital rate of public service investment and stock replacement, paralleled in some stimulating an increase in market capacity respects by the Build Own Operate (and and public involvement. Finally it is set in Transfer) hospital projects in Australia, the the context of “PFI: meeting the so called BOOT programme. More investment challenge” HM Treasury July recently, the UK Government has gone a 2003, which is explained in step further and stated that who provides attachment ‘A’. clinical services for NHS patients does not matter as long as treatment is free at the Throughout the nineties western point of need, opening the way for low- governments increasingly adopted cost/high value private providers to entrepreneurial strategies to stimulate become a potentially large element of the improvement in public services. The aim diversity in NHS provision. – achieving better public value through encouraging contestability and innovation 1. PFI Principles - characterised by choice, improved quality and greater efficiency. Put simply, The principles of PFI are simple, a fact strategies based on the proposition that often missed in the heat of the debate that vehicles for public service delivery do not has been generated by a complex need to be owned and managed by implementation process. It is a Government. performance-based means of procuring property over an extended time scale. In Policies are by now varied and widespread place of conventional ‘public works’ eg. in the Netherlands over 90% of contracting, PFI introduces contestability hospitals are owned by not-for-profit between the stated set of desired outcomes organisations, Germany has introduced and different approaches to achieving

these. The client (invariably the NHS PFI and PPP – is there a difference? Trust as the agent of Government) describes the outputs required of the The terms PFI and PPP are often confused; facilities and the contractor (the different both are used as means to help reshape PFI consortia) in a competitive health care delivery. However they vary environment exploits the freedoms to markedly in their approach and structure. innovate in determining design, logistics, financing and construction of the facility. Private Finance Initiative Further distinctive characteristics are: The Private Finance Initiative is • acceptance by the public sector that principally concerned with the it does not need to own the facility procurement of facilities. It has two aims: to deliver a public service to improve the efficiency and cost effectiveness of delivering and • the PFI consortium as landlord and maintaining new buildings; and the Trust as beneficial occupier for stimulating new thinking about how the duration of the contract, usually principles of design can be used to 30 years - in return for a rental fee contribute to service change and better (unitary charge) care.

• lifetime (duration of contract) Under the PFI regime the onus is on the maintenance of the building Trust to be clear about what it can afford and what it wants (rarely aligned) and • rental payments start when the express this in terms of outputs required. hospital is made available, and In doing so the Trust is obliged to set only continue so long as it remains parameters within which the PFI functionally available and meets consortium has freedom to innovate in its standards of environmental safety design and delivery. These characteristics and quality – finally removing the mean that PFI mandates are won with harmful legacy of Crown Immunity good designs that are affordable at the time and back-log maintenance of signing.

• shared allocation of risk The Trust remains accountable for determined by the principle of who providing the clinical service and carries can manage it most effectively the risk of downstream changes in demand or tariffs. This places a premium on the • optional provision of non-clinical ability of the PFI contract and the Trust to services – that introduces the exploit the capability of the PFI principle of the fully serviced consortium in anticipating and delivering building future change as cost effectively as possible. Conventional measures of “Year 1 affordability” fail to put a price on this • reversion of ownership of the asset premium. Establishing incentives and in good condition to the maintaining good long-term relationships Government (Trust) at the end of with the consortium is however an the contract important consideration when the PFI brief

is set and in evaluation, choosing and • low cost project finance through managing relationships with the PFI highly geared, off-balance sheet partner. Special Purpose Companies (SPCs)

There is much talk about partnership, but consortium is the generator of in the current PFI model the bottom line is property solutions to meet service that the relationship is conducted through need an inert SPC, governed by a tough contract and lenders’ controls shaped by a pre- • PPP may be viewed as a determined, inflexible risk model and an (temporary?) capacity increasing adversarial, penalty based payment partnership aimed at driving system. change through extending patient choice, at least with elective Public Private Partnerships surgery and DTCs

Public Private Partnerships are more 2. PFI Evolution and Systems directly aimed at reshaping the way in Planning Optimism which services are delivered and they tend to take one of two forms: As the PFI programme gathered speed in the NHS in 1995/6, there was a market • integrated facility and clinical philosophy of “let a thousand flowers service provision – this model bloom, but the private lenders will decide underpins the purchase by the NHS which”. of additional clinical capacity by contracting (for maybe five years) It exposed many implementation with operators of chains of problems: cultural differences between the Diagnostic and Treatment Centres public and private sector, weaknesses in (DTCs); and in Australia the service planning assumptions and lack of BOO(T) projects; public engagement (for which the voters in Kidderminster punished the Government) • shared public/private equity risk and weak public sector procurement skills. ownership models - this model is The structural rigour and robustness of PFI represented by the NHS LIFT exposed the need for rapid transition from programme for the renewal of the the former input planning system to an primary care estate through output ethos orientated towards generating Partnerships for Health. better value for money.

Australia also has other variants (half-way Centralised Planning vs. Local houses) that include franchise management Implementation of hospitals, eg. Modbury Hospital, SA and some forms of co-locations The central ‘work-up’ processes for early PFIs tended towards establishing ‘planning In broad terms: norms’ as a condition of Trust business case approval, these involved: • PFI has most effectively been used to facilitate big-bang accelerated • self financing principles – delivery of health facilities (mainly containment of PFI costs (meeting the larger, acute hospitals) through the unitary charge) within pre- removing the burden of a complex existing cost profiles master planning, property procurement, financing and • benchmarking PFI solutions for management, allowing the NHS value for money against a risk-free Trust to concentrate on clinical and Public Sector Comparator – a workforce change. The PFI

theoretical assessment of project In the early stages of PFI the ‘comparator’ costs for a publicly funded solution was constructed in a conventional manner. In a climate where PFI was ‘the only game Self Financing in town’, beating the comparator was the principle criteria for success in unlocking Business cases for PFI projects often capital investment and meant that PFI’s projected: tended to retain input rather than output focus. This engendered a lowest common • the stimulus and opportunity for denominator attitude to cost and inhibited transferring some elements of the private sector potential. Unrealistic initial hospital service to the ‘community’ ‘optimism bias’ meant that most projects were eventually signed off at higher • new facilities could be designed to figures than the PSC. It is reassuring to be “sweated” (90% average note the new sense of realism injected by occupancy, 365 days a year) the recent Treasury report.

• substantial staff efficiencies Driving the programme Forward resulting from more effective clinical models and corresponding Centrally, the role of the NHS Private designs Finance Unit (PFU) has been a critical success factor in managing the market and It was assumed that these efficiency gains developing acceptable processes and would more than offset increased contracting frameworks. However, procurement costs, the outcome justifying implementation and on-going relationship bed reductions. But these formulae based development at Trust level has not been targets proved too ambitious. Firstly, the helped by management and organisational level of integration and systems coherence churn, with consequent loss of corporate between the primary and secondary sectors memory and controls over the costs and proved weak and ineffectual, the operational policies underpinning the deal community facilities required were simply that had been done. (Catalyst’s first two not in place when needed. Secondly, PFIs have seen eight Trust Chief functional design efficiency contributed to Executives between them since 1995). but could not wholly support the notion of increased occupational utilisation. Equally These overall difficulties gave rise to important in practice, in the rapid critical assessment of PFI by many transition to a new hospital, staff did not prominent commentators as an issue always change their working practice and simply of economic rationalism, ignoring adopt the new nursing and operational the reality that it was an internalised policies that had shaped ward and systems and implementation problem and departmental functional design three years not a structural failure of PFI. It also before. imprinted in the mind of the public that PFI was the culprit and the private sector The Public Sector Comparator and Value the agents of profiteering out of health for Money investment. These deeply embedded misconceptions are proving hard to The benchmarking principle is sound, but correct. practice has been problematic. The strength of the PFI lies in using commercial expertise to interpret and meet output needs in new and imaginative ways.

3. Pendulum Effect of Corrective will improve efficiency and change Action demand patterns

Corrective action to overcome early • there may be future difficulties in problems followed the twin tracks of staffing all the beds – getting the restoring capacity with assumptions right workforce mix may not be dominated by providing more beds, easy in a volatile and competitive sometimes after signing the PFI contract, labour market and streamlining and standardising PFI processes. It is arguable that the pendulum New thinking about whole systems service has now swung too far. design is bound to acknowledge these issues and will inevitably promote more Beds as a factor of patient care locality based care. In Australia for example the Hospital Admission Risk There is no doubt that the bed reductions Programme (HARP) introduced in assumed in early projects were Victoria has achieved a marked reduction unsustainable and thereby provoked the in the pressure on acute beds (with National Beds Inquiry that recommended commensurate reductions in waiting times) increasing provision. In hindsight by looking at alternative means of meeting insufficient weighting was given to demand and without reliance on increasing improving and implementing systems acute bed provision. efficiency by promoting primary and community care as an alternative and often These types of initiatives coupled with the more effective means of alleviating DTCs and new high quality hospitals demands on acute hospitals. coming on stream in 2006 – 2010 will provide substantial extra capacity. The change in direction prompted by the However the degree to which this may Inquiry may have the result that from a result in oversupply when set against position of providing too few beds new meeting waiting time needs and hospitals being procured now may have guaranteeing choice is difficult to assess. too many beds within a few years of being What is clear is that these factors commissioned. Well documented studies combined with national tariffs and suggest that: consumer choice being extended to chronic diseases will have a profound • many patients, particularly the effect on unattractive, old, high cost-base elderly and chronic sick, are hospital producers. inappropriately occupying acute hospital beds Complexity and Standardisation of PFI Process • the rapid advance of new technologies (including The implementation of PFI in the health pharmaceutical and sector was an order of scale more complex communication) will have a than the tried and tested projects (roads significant impact in determining and bridges etc) that prompted its wider where care will be delivered in use across the public sector. The main future points at issue were:

• increasing ‘industrialisation’ of • the public sector - the NHS Trusts - many interventional procedures had been subject to management cost targets, which stripped out capital and

service planning skills thus exposing Penal Payment Mechanism them to reliance on expensive third party support to meet PFI planning, The reasonable principle here is that if processing and risk assessment needs. space is not made available (or there is This often provoked the debilitating non-compliance with service standards) by problem of workforce disclaimer of the PFI consortium then that space, or change; a ‘them’ versus ‘us’ attitude service, should not be paid for and the Unitary Payment is reduced. Early • the private sector were (and still are) payment mechanisms are now seen as too faced with exceptionally high entry soft. With current mechanisms, to provide costs; Catalyst estimates an an ‘incentive’ for the consortium to expenditure of 1-1.5% of capital value perform, it is punished by the application to tender in competition and a further of a weighting factor of between 300- 3-4% to reach financial close. Skilled 600%. The mechanism is downward-only, people able to manage the complexity with no upside for contributing to better of PFI design and performance hospital outcome performance and contracting are a scarce resource, flexibility in services. Furthermore, adding significant opportunity cost (the changes in space or service requirement Treasury paper addresses measures to mean a cumbersome and costly change reduce time and cost of bidding) control and contract variations procedure.

• time – although the design and The Retention of Employment Model construction phase of projects has been (RoE) reduced considerably in comparison with conventional procurement, a In response to claims of a two-tier factor of the ‘time is money’ ethos in workforce in PFI in the NHS and to ensure the private sector, gains achieved in the staff terms were protected, the ‘business phase’ are often negated by Government made a manifesto protracted internal NHS Trust commitment to keep as many staff as consideration of options; the latter possible ‘within the NHS family’. This often signalling that pre-planning has resulted in a deal with Unison, the largest been too input rather than output representative of NHS Soft Facilities focused. Time has a definable Management services staff, that non- opportunity cost not simply financial managerial NHS staff engaged in Catering, but directly affecting patients in terms Cleaning, Portering, Security and Laundry of service access and quality of care. were to remain employees of the NHS but managed by the PFI partner. An In a system where innovation is one of the unforeseen complication of the deal was guiding principles, standardisation may that it was deemed illegal under EU seem incongruous. However in process employment protection law where there terms it can be beneficial – central are Transfers of Undertakings. An ‘opt- negotiation between the PFU and industry out’ mechanic has been introduced but as representatives to agree a tender process, the legality of this has not been tested in standard contract and payment mechanism law, complex contract provisions and is a good example. However there are also unwind indemnities have been areas where the PFI structure works incorporated in recent project agreements explicitly against private sector efforts to should RoE be successfully challenged in deliver better value. the courts. RoE has introduced a new and unpredictable risk for the PFI service partner managing a workforce of the NHS

employer through who’s performance the (whereas the PFI contract cost was project company earns the Unitary defined and fixed for the agreed Payment that pays their wages and deliverables, years before services the debt over thirty years. commissioning)

(NB. RoE is an NHS-only policy. The • little perception that borrowing by recent HMT guidance is clear that Soft FM the Government for public inclusion is optional, but is not clear about investment through the issue of the future application of RoE in NHS PFI Gilts is just like having a home contracts). mortgage where the capital has to be repaid with interest 4. Public and Worker Perception What is required is transparency in In the UK and Australia the public (and accounting locally for the real time/risk staff) tend to associate PFI/PPP with cost of NHS public investment capital privatisation. Many, if not most, have not (Foundations will be in the vanguard), a grasped the significance of the policy shift new way of engaging the public in owning from government ‘ownership’ of providers change and its consequences and an to devolution and diversity in the provider understanding of the mutual benefit that system. This lack of understanding can can derive from embracing the principles get in the way of introducing beneficial of PFI/PPP. change. There are a number of issues, structural and presentational, that have fed 5. The Private Sector Perspective the deeply suspicious nature of the British psyche: The private sector view of PFI is as a business opportunity. Catalyst has an • hospital closures and bed inherent interest in using the quality and reductions evident in early schemes reputation of its hospitals as working were put down to meeting the assets to generate income to service profit requirements of the private shareholder equity and loans. Catalyst, in sector rather than reflecting common with other consortia, derives its underlying systems and planning funds for PFI mostly from institutional issues investors eg. life and pension funds – the ultimate investor is of course the public, • ‘windfall’ profits such as the consumer of hospital services – a highlighted in the refinancing of theme that this paper will return to later. the Fazakerly Prison scheme were damaging of public confidence and The PFI and fulfilling potential reinforced the spectre of short term profit taking rather than long term PFI has achieved a great deal in a short commitment by the private sector time:

• that pay and conditions of • delivered the first phase of the transferred staff had to be cut to largest sustained hospital building subsidise the PFI and sustain programme in the history of the private profit NHS

• a tendency for Trusts to cite the • better time/cost certainty PFI as the reason for their (NAO/HMT reports) structural financial deficits

• cost of NHS capital employed is building costs, is much more significant properly valued and accounted for but is undervalued. This can relegate the interest of the consortium back to simple • quality of maintenance and economic rationalism again, where the ancillary services insulated from only driving force is presumed to be depredations of Trusts’ annual winning contracts. Good companies have revenue deficits values that if encouraged through some form of ‘liberation’ of PFI payment • created a new industry mechanisms can promote even greater benefit for patients. There is for example • refreshed the healthcare planning no explicit mechanism for valuing the and design capacity available in the price differentials of competing PFI UK solutions that:

Experience gained from PFI hospitals • contribute the most to improved designed over the past six years will pay a clinical effectiveness and better public dividend. A vast knowledge base health outcomes (the rationale of has been established within the PFU, NHS the hospital) and in a diversity of consortia. Stable groups of experienced consortium • have the most beneficial impact on sponsors and funders bidding for multiple the remaining 80% of the hospital projects are reducing delivery risk and budget transaction costs; and their strategic supply chain of designers, engineers, • build in the cost of flexible manufacturers and contractors are structures and adaptable spaces reducing component cost and driving up quality and reliability. • provide the greatest contribution to social development and urban All this is speeding the adoption of better renewal, increasingly recognised as design and operational practice and will having a direct impact on health lead to safer, better-built environments. status The time-lag effect of applying learning from many lengthy capital procurements The risk for companies designing these will quickly reduce and this new elements into bids is that they will lose on knowledge will increasingly add value, not price; bidding cost and risk has already only in cost terms but also through better been highlighted as a major disincentive. procurement and environmental standards There are compelling reasons why contributing to better care. evaluation criteria should be expanded:

PFI and ‘Hospital’ health economics • there is good evidence to demonstrate the beneficial impact At the heart of this case for change is the of good design on health outcomes, Pareto principle – the 80/20 rule. PFI eg. research undertaken by the investment is invariably measured on the Karolinska Institute, Sweden – this basis of its financial value; in cost terms should be factored into the the Unitary Payment typically represents affordability envelope and less than 20% of the total resource assessment process consumed by hospitals. Its contribution ‘in-kind’ to improving health care, other • the speed of change relating to than the opportunity cost savings of lower internal clinical processes and care

standards is accelerating – flexible 6. PFI, the case for change design principles will be paramount if benefits are to be The following trends will all accelerate realised and increase in intensity during the early lifetime of PFI contracts: • design as a contributor to improving clinical practice has yet • growth in the numbers of the to realise potential, despite elderly examples such as environmental characteristics contributing to • older people will be healthier, then reducing hospital acquired frail and sick with chronic infection conditions for longer – the average patient of 70 plus will have on • the balance between ‘refreshment’ average 2.6 DRG conditions investment in technology and the (Disease Related Group) built environment will change with an increasing bias towards • new ways of tracking and treating technology illness will arise from developments in genetic science • improvements in social infrastructure can contribute to • more – and more expensive – overcoming adverse health ‘wonder’ drugs and treatments determinants particularly those increasing public influenced by social inequality expectation/demand

There is little in way of an evidence base • communications technologies will (or research) that will currently enable increase the incidence of diagnosis these factors to be valued as part of bid and treatment delivered from a assessment. However, in a remarkable distance change that recognises the real cost and benefit of new infrastructure and • chronic shortages of some technology that supports organisational categories of health professionals change, some complex major schemes will continue where the outline business cases were approved two or three years ago, are now These combinations of factors will coming to the market with 200-300% profoundly change the health landscape. increases in the original PSC. An additional driver will be the In the wider context, the case for further government’s choice agenda. Choice is development of PFI principles and practice aimed at enabling patients to receive care is reinforced by policy direction. This and treatment that offers the best outcomes introduces the question of how well PFI is and quality at the best value, where and positioned to meet the challenges posed by when they need it - a central tenet of PCT the alignment of factors such as commissioning. It will demand a new ‘commissioning for choice’, national responsiveness from providers, in that: tariffs and whole systems principles of redesigning health care - all in play and at • the young fit will demand quick the top of the modernisation agenda. access to ‘industrialised’ elective surgery – in Australia for example, small local and specialised private

hospitals are the main providers of government departments and many types of elective procedures agencies eg. lens replacement. The UK is following with the imminent • greater community involvement in arrival of the private DTCs that the management of local health will provide NHS services under services (the rationale behind the contract Foundation Trust movement) will mean more public accountability • parents will want their children and thereby greater local influence cared for in an environment in reshaping services dedicated to their requirements – they are not just small adults but Few of the above trends and changes were have very particular emotional and apparent when PFI was first introduced in physiological needs the NHS and as we have seen the central construct of PFI has remained largely • the elderly deserve care that unchanged. The DoH Private Finance maintains their independence and Unit has brought about process mobility eg. community centres improvement and strategies such as linked with home support ‘bundling’ projects may address short-term programmes are changing the capacity restraints and help mitigate the health landscape in many European high bid costs of the construction industry; countries and are dramatically however, a more fundamental reappraisal reducing demands on acute beds; will be necessary if the capital stock these types of investment are now dimensions of health and social care getting underway in the UK investment are to be sufficient for the changes ahead. • the chronically ill, now also promised choice, will expect care Thinly capitalised, ring-fenced SPC to be organised on a whole systems project vehicles have little equity to deal basis and benefit from the with operational delivery problems and availability of ‘dispersed’ treatment unforeseen cost increases, particularly and support in their home or in after refinancing. The current market their local community pricing of total project returns is probably at its low point and market forces and National framework standards are being perception of risk on individual projects introduced and will reinforce and will most likely see increases feeding accelerate the shift towards designing care through. What is clear is that a more comprehensively around the specific proliferation of standalone SPCs, illness related needs of people. individually funded, with multiple shareholders having no common long-term Other factors in play include: interest and vision is not sustainable.

• the continuing drive for value for The future challenge for PFI is what money in spending public funds direction it should now take?

• bringing inter-sectoral ‘health Whole systems thinking will need to work determinants’ into focus in shaping at least at five levels: collaborative initiatives and spending priorities between • wide area - local health and social economy planning for property and

technology (Strategic Health planning concepts eg. Authority bounded?) incorporating built-in, shorter term obsolescence anticipating the • internal - integration of provider speed with which current clinical Trusts’ clinical models, IT, processes will be overtaken by Medical Technology, workforce new techniques. The Royal Prince planning into clinical design, Alfred Hospital, Sydney has adjacencies and patient flows introduced this principle for part of its new Intensive Therapy • consortium internal - buildings and Department staff whole-life effectiveness, efficiency, flexibility and cost • development of campus style hospital sites and hospital network • consortium scale – portfolio models (already well established management and risk spread, in Australia), as examples of specialist management, recycling provider restructuring lessons learnt, economies of scale • new style (Trust owned) satellite • borrowing - frameworks for community units, as Trusts securing debt finance with compete with the new generation flexibility for a mix of NHS Trusts, of Diagnostic and Treatment Foundation Hospitals, Local Centres Authorities and private providers (Foundations could be the • a diverse range of community ‘catalyst’ around which this hospitals and polyclinics (multi- happens). purpose centres) offering a wider range of local care – taking Add to this urban regeneration and the advantage of new ‘dispersal’ need for social housing (HM Treasury technologies and bridging the gap cites UK backlog maintenance at £19 between the primary and billion) and there is a compelling case for secondary care sectors developing PFI as a more sophisticated and directed tool for modernising and This all presages greater volatility as achieving equity in and access to the demand levels and priorities change; the broader range of public services, within a inevitable consequence will be the need dynamic market. for health providers to flex in and out of accommodation. The idea of long-term 7. Strategic Property Management in occupation of the current portfolio of the New Health Economy facilities in present form does not look sustainable or necessary (nor is the NHS So far, regeneration of the old hospital accounting policy of depreciating stock has been the principle consumer of specialised buildings over 60 years). PFI in the NHS. As the means of meeting health needs becomes more diverse, so These views are reinforced by two recent will the capital stock requirements. There State Health publications in Australia, the will be: Queensland ‘20/20 Vision for the Future’ and the South Australia ‘Generational • increasing need for more rapid Review’; both predict the direction of changes in the configuration of travel indicated in this analysis, both hospitals – this suggests new

stress that sustainability of investment in bases, Trusts will fall into three broad health care depends crucially on greater categories: diversity, both point to the liberating effects of advances in technologies and 1. steady state with no foreseeable highlight the growing impact of major capital needs consumerism but tempered with the reality of a shrinking (supply side) labour 2. redevelopment schemes at market. planning stage or under construction The South Australian ‘Generational Review’ also emphasises the need to 3. new PFI financed facilities and tackle health determinants in social committed to long term contracts settings and suggests increasing diversion of resources to resolve inequalities that This does not feel like a level playing field have an adverse effect on health status. and could distort the impact of the choice There seems little doubt that difficulties in agenda. bridging capital investment between Health and Social Services in a Australian studies show that over a 40- coordinated manner has held back the year period capital investment has types of initiatives promoted in the South remained fairly constant. Annual capital Australia Generational Review report. spend averages around 8% per annum of The announcement by HM Treasury of total annual health expenditure; this seems extension to the PFI programme to adequate to maintain and refresh the built incorporate urban renewal and social environment and replace major equipment, housing will create new opportunities for furthermore this ‘stability’ looks certain integrated planning and investment aimed enough to predict need well into the future. at tackling health determinants. The new tariff system for the NHS will need to acknowledge this issue of capital The challenge for PFI developers loading. There are however further issues; (constrained by their structures, cost of research in the State of Victoria, on the bidding, procurement rules and probity) is capital dimensions of case mix, shows the to become immersed in the planning of dramatic effect diagnostic services have on healthcare processes and to design cost, as illustrated below: buildings that outlive current service models and provide ‘agile’ space on flexible terms. Capital weighted DRG throughput averaged over Victorian Hospitals - the National Tariff based funding impact of capital cost

There is a further element of asset strategy $666 per case when all services are in which Australia provides relevant and hospital-provided useful knowledge - case mix funding of hospitals and institutions. The $587 when pathology is contracted introduction of national tariffs in the NHS out will have a major impact on Trusts’ approaches to strategic asset investment in $318 when neither pathology nor the future. Many Trusts will be in diagnostic imaging services different starting positions when national are rendered by the hospital tariffs are introduced. In addition to the wide range of high/low average cost

The implications of this knowledge may facilities and Local Authority be anticipated; it will inevitably promote health related social investment new thinking about the establishment of radiological and pathology centres distinct • the need for multi-site and multi- from many individual hospitals, offering purpose facility investment network services and with economies of scale in cost and staff terms and with • realising the unfulfilled potential improved generated by concentration of of PFI and the private sector expertise. Collaborative networks of DTCs may be in the vanguard of this It is unlikely that PFI in its present form movement. This shift has already taken will prove sufficiently flexible to meet place in parts of the Sydney conurbation these needs. These principles can and pilot schemes are underway in the UK. however be combined effectively by PFI should have a vital role in realising introducing two further strategic aims as this potential benefit. the ‘glue that binds’:

Portfolio Management of Assets • communitarian (inclusive) principles of public engagement in The changes in capital need forecast in this sharing the health agenda, and paper highlights the requirement for new thinking about integrated strategic asset • realising new ways of utilising the planning, but wider-ranging than has so far potential of pension funds – an been the case. It will involve multiple- alternative approach to ‘public users across multi-sectoral boundaries. ownership’ Their needs will vary over time. These factors lead to the proposition of The proposition carries the principle of considering future asset procurement and Foundation Trusts a step change further management in portfolio terms. This is and in doing so has the potential to enable similar in concept to the NHS LIFT the private sector to introduce new programme but of much greater scale and property investment and management with broader objectives. The case for strategies that support ‘shared and owned’ reframing PFI to support this approach is modernisation of public health services. developed below. The model is based on the creation of 8. Squaring the Tax, Spending and ‘Community Bonds’ - in effect retail Pensions Circle - A New Funding pension and savings products that could Principle be sold locally and where the funds raised are actively invested in local The recurrent themes in this paper are: infrastructure for the benefit of local citizens. • rapid evolution of health provision towards whole system, multi- Community Bond Funding for Portfolio sectoral principles of care delivery Investment

• consumerism – choice driving A managed property Bond would offer an diversity in health facilities and investment vehicle and establish a fund capital funding models - PFI that provides the flexibility for portfolio hospital rebuilding, PPP investment, as opposed to the Diagnostic and Treatment Centres, predominantly single institution focus of LIFT regenerating Primary Care PFI. The key principles are:

• investment fund directly geared to Conclusion health and social investment The introduction of PFI for the provision • source of flexible capital of health infrastructure has proved a investment to support changing notable success in stimulating the largest patterns of care delivery – a health building programme in the history of the property portfolio principle of NHS. meeting needs There is qualification: initial (and to some • interlinked source of capital to extent ongoing) shortcomings in invest in social infrastructure and translating service need into strategic urban renewal to help overcome output definition and practice will almost health inequalities and support certainly result in the need for mid-stream public health initiatives correction for many new hospitals. For their part PFI consortia have been • opportunities for those working in inhibited by operational factors: high entry the service to invest more directly costs, penalty (rather than partnership) in their future based contract structures, shortages of staff experienced in this form of procurement • ability for local employers to and thinly capitalised unconnected SPCs. invest their occupational pension funds If PFI is to facilitate the next stage in the reform of the NHS two factors must come • choice for the public to invest their into play: savings directly in the future of their local health service First is the question of getting the service planning right combined with the At a time of acute public anxiety about capability of defining this more adequately security of occupational pensions, such a in terms of required outcomes (as the next model would help restore public stage beyond outputs). It is no longer a confidence in the wisdom of personal and question of single institution interests but employer savings for retirement. With multi-sectoral systems investment and sufficient scale in geographical clusters for with health determinants rapidly gaining efficiency and spread of portfolio risk, the more prominence as the boundaries fact that bond interest is effectively between health and social services begin to guaranteed by payments from publicly overlap. funded services, then there will be lower volatility in fund returns and therefore Secondly, success depends critically on a greater certainty of income in retirement. dynamic private sector with the capability and capacity to deliver the massive scale People will find it easier to make a direct of reconfigured and reequipped physical connection between their taxes and assets. Within a few years a significant pension contributions being used to volume of controlling equity in PFI support their children’s, their relatives and concession companies will rest with a their own health and retirement – reducing number of mainly financial achieving a public consensus on investors. Just as in Australia, there will Generational redistribution of resources. be increasing consolidation as corporations start to trade investments and contracts in order to rationalise portfolios and pool assets. Economies of scale and

geographical coherence will come into play as determinants of competition, value and future entrants into the market. What is needed is a refreshed PFI strategy to stimulate and encourage a new breed of social infrastructure developers enabled to make a more incisive contribution to the modernisation of services; security for their investment will come from cash flows earned from useful property assets, rather than security of bricks and mortar.

The recent Treasury report should prompt new initiatives; extension of PFI to the wider public service arena and stimulation for urban regeneration and piloting a Credit Finance Guarantee system of PFI funding. This provides an opportunity to create a market for community managed property Bonds and pave the way for new larger scale, lower risk and higher mutual gain portfolio investment strategies. These offer potential pathways for individuals to invest in their future – health and security. Better opportunities for public engagement will generate a new understanding and confidence in the measures necessary to reshape the health and social landscape.

For this to happen there needs to be visionary thinking and strong leadership from HM Treasury; and new models of public private joint ventures with properly capitalised shared-equity development companies prepared to own and operate health and social property portfolios with lease payments geared to usage and volume throughputs across a local economy.

Finally, if PFI investments are well matched to the needs of private sector occupational pension schemes, why not for the currently un-funded, unsustainable NHS pension scheme?

75 ATTACHMENT A

Context for the Paper -Evolution of the projects 55 PFI deals by the end of 2005 Private Finance Initiative with a total capital value of £6.5 billion; Squaring the Tax, Spending and the price of the risk premium on private Pensions Circle? sector debt finance (0.3-1%) is good value; a significant proportion by value are on the Catalyst Healthcare is a PFI consortium public sector balance sheet. that was formed in 1995 by Bovis (now part of Lend Lease Corporation) and Bank The Treasury further propose: of Scotland. Catalyst’s purpose was to respond to the Conservative Governments’ • PFI should no longer be used for IT new policy initiative and compete to build provision and transactions below £20m and finance NHS hospitals one at a time, using a combination of small amounts of • ‘Soft FM’ services do not have to be sponsor equity and large sums of borrowed included in the scope of PFI money. • employees’ terms and conditions Catalyst has two large “first wave” PFI including new recruits, have to be District General Hospitals that were broadly comparable to [NHS] rates designed in 1997/8 and have been in use since 2001/2, and a rural general hospital • the Public Sector Comparator will be designed in 2001 that opened in 2003. subject to more rigorous early Catalyst is currently designing and bidding economic appraisal for 7 schemes to replace or redevelop 14 hospitals having a capital value of £1.6 In terms of ongoing development: billion, requiring funds of circa £2.0 billion with a resulting commitment by the • PFI is to be extended to urban NHS to pay index-linked Unitary Charges regeneration and social housing of some £300m pa for 30-35 years. As a project-based business, Catalyst is • PFI is only one means of funding progressing towards a corporate model public service investment and it does capable of developing and managing not matter whether projects are on or portfolios of health and social services off the Government balance sheet if infrastructure investments, harnessing they represent best value institutional funds on a significant scale.

• The Government will consult and pilot In July 2003, HM Treasury published a Credit Finance Guarantee system of “PFI: meeting the investment challenge”, PFI funding where HM Treasury will an important analysis and end of first term buy “wrapped” senior debt in PFI report on PFI. It provides evidence of projects by issuing Gilts, and paying what has and has not worked drawn from the private debt risk margin experience since 1995/7 to date and looks in a pragmatic way at what needs to improve.

In summary, HMT believes that PFI has delivered on time and to budget and the operational experience is positive; it has worked well for [large] hospitals and delivered value for money; the DoH

The Role of Private Health Care in Australia: Where to From Here?

Helen Owens

Helen Owens is a Commissioner at the Australian Productivity Commission

1. Introduction have been building public-private partnerships through contractual The private sector plays an important role arrangements with private companies to in Australia’s health care system, both in finance, build and operate public hospitals. terms of delivery and to a lesser extent, financing of health services. Its role in Questions arise as to the underlying service delivery takes a number of forms: rationale for these measures, whether they the treatment of fee paying private patients contribute positively to Australia’s health in private hospitals; the delivery of system performance and whether more services to public patients under should be done to build private capacity in contractual arrangements with State and the Australian system. Territory governments; and, through private contracting, the provision of 2. A significant role for private health various clinical and non clinical services to care public hospitals. In some instances private hospitals have co-located with public The private sector is involved in hospitals, sharing facilities but operating at Australia’s health care system at various arms length. levels.

However the position of private health • private suppliers of hospital and care in our overall system is somewhat medical services ambiguous. It sits alongside a universal, tax-financed public system (Medicare) that • voluntary private hospital and ancillary is available to all. It is also constrained by insurance government regulation designed to pursue broad social objectives relating to • privately provided and funded dental universal access, quality and pricing of care, physiotherapy and ancillary services. services

Governments at all levels have pursued a • manufacture, wholesale and retail range of policies to promote the private distribution of pharmaceutical drugs sector in Australia’s mixed public-private system. In the early Medicare years the • private construction companies Commonwealth government subsidised private hospitals directly, while more Private health insurance is a $4 billion recently other measures have been directed industry (net of government premium instead at supporting private health rebates and tax expenditures) accounting insurance. Meanwhile, over the past for about 7 percent of total health care decade, State and Territory governments expenditure in 2000-01 and nearly

12 percent of hospital funding. (AIHW, A number of different contracting models 2002a) However its shares of total health have been applied across states. expenditures and hospital expenditures have declined significantly since the mid BOO/BOOT/O/OO: 1990’s (Figure 1) despite government BOOT contracts (build, own, operate, measures to support the industry transfer) have been used in NSW, introduced in 1997 (see below). Queensland and WA to develop public hospital facilities. BOO contracts (where In 1999-00 there were 509 private the private company or consortium retains hospitals, representing 41% of all acute ownership of the facilities) have been used hospitals, with a large increase in numbers in NSW and Victoria. O contracts (operate since the early 1990’s. The biggest only) have involved the South Australian increase was in private free standing day and Tasmanian governments contracting hospitals which almost doubled in number out the entire management of the public over the last decade (from 111 to 207). hospital (Modbury and Latrobe hospitals Private hospitals account for a third of respectively) to private companies in a acute bed supply and 43% of same day franchising-type arrangement. In addition, separations (AIHW, 2002b) and a higher the Commonwealth Department of proportion of surgical than of non-surgical Veterans Affairs (DVA) has competitively cases. tendered the ownership and operation (OO) of three Repatriation Hospitals There are many examples of private which were not previously integrated into hospital co-locations with public hospitals the State public hospital systems. in most states. In theory, these co-locations - which have largely evolved since 1995 - Private providers also contribute to the reflect complementarities and economies Australian health system in other ways. of scope in the provision of public and Many public hospitals contract out non private health services. They have been clinical services such as catering, cleaning expected to reduce duplication of services and IT support and private companies and facilities; help the public sector to supply clinical services such as pathology retain medical specialists; and offer to the public sector. specialists a back up in the public hospital in the event of complications. (PC, 1999a) In addition, more than 20 religious/ charitable hospitals, including 7 major In addition to the provision of traditional teaching hospitals provide about 3000 beds private hospitals, the private sector has for public patients. There are many been increasingly involved in entering into similarities to BOO arrangements in that contracting arrangements with State and the owners finance construction and Territory governments to help finance operation of the facilities and governments and/or operate public hospitals. A survey pay them to treat public patients. But undertaken by the Steering Committee for unlike BOO contracts, the private hospital the Review of Commonwealth/State component is operated as a separate entity Service Provision in 1998 identified a within the complex. wide variety of such arrangements across all States and Territories, except for the 3. Private health care as part of an ACT. In total 14 competitive tendering- interactive system type arrangements were identified, involving both private for- profit and The private sector is an integral part of private not for-profit hospitals. (Steering Australia’s health system, performing Committee, 1998) multiple functions, some in partnership

with governments and others in direct • reduced levels of bulk billing competition. It is a part of a complex (involving no out of pocket cost to the system comprising numerous intersecting patient) by general practitioners over arrangements, many ad hoc and opaque. recent years may result in a switch of Interactions of the private sector with the demand to public hospital emergency broader health system spread well beyond departments. those between private hospitals and governments (as providers of subsidies or • governments regulate the behaviour, contractors), or between private hospitals standards and entry of public and and public hospitals (as potential private providers, the costs of which competitors or co-locators). They extend are reflected in private health insurance to interactions between private hospitals premiums. and private health insurers, nursing homes, primary care providers, the medical • governments also regulate medical workforce and Medicare arrangements workforce supply, the availability and relating to pharmaceutical and medical price of pharmaceuticals, and the services. higher cost medical technologies.

Hence the successful functioning of the • budget caps provide an incentive for private sector will be influenced by, and governments to limit public hospital cannot be divorced from, what happens capacity and contract out the financing elsewhere in the system. But there are and/or provision of public services. many structural features which make it a rather unorthodox environment in which to • little or no (public) coverage for many operate and may create traps for the services (notably dental) creates unwary. The most significant of these is incentives for privately funded care. the historically complex and changing set of subsidies and tax transfers between the 4. Ambiguity in the role of the private Commonwealth government, state sector governments and insured aimed in part at containing public expenditures. There is little consensus at any level concerning the role of the private sector in Other examples include: this complex mosaic. Consequently, its proper role in the context of Australia’s • given the existence of a universally universal health care system has been the available, publicly-funded system subject of considerable uncertainty and (Medicare) which is ‘free’ at point of policy debate. Participants in the Industry delivery, the incentive to use private Commission 1997 inquiry into private hospitals or purchase private health health insurance expressed diverse views insurance depends to a significant as to its role – and, in particular, the role of extent on the (actual and/or perceived) private health insurance in funding availability of public beds. privately provided services. (IC, 1997)

• private hospitals do not operate in a A number of participants (including competitively neutral market when consumer groups) saw private health competing with public hospitals for insurance as funding supplementary private patients (public hospital services to those provided in the public charges are set by government whereas system (additional comfort, choice of private charges must reflect underlying doctor). Others (including medical and costs). private hospital interests) saw the private

sector as providing a desirable alternative higher levels of insurance among younger to public funding and provision. Some also people. recognised private health insurance as supplementing public funding in regard to The incremental reforms introduced in public hospital care. recent years were a means of ensuring the ongoing viability of private health care as The Commission has expressed the view well as promoting a broader role for the that in practice it plays both roles – private sector in public provision and providing additional services and financing. They have to date resulted in a amenities, as well as displacing the need slight shift along the public – private mix for public funding and service provision spectrum. Underpinning them is an under Medicare. assumption, at least implicit, that the private sector plays both roles and is an 5. Government intervention in the intrinsic part of our health system. They market reflect a general desire to retain the current mixed model rather than take a big step Governments’ approaches to interacting either towards a private market – based with the private sector, through regulation model or alternatively a fully public contracting and (possibly) subsidy system. arrangements, will be largely dictated by how they interpret the role of the private Taken together with the perceived need to sector. constrain public spending, governments at federal and state levels will be addressing If private funding (and provision) is the questions of whether there is scope to merely a top up there would be little need develop further the capacity of the private for intrusive regulation of private health sector to deliver and/or finance a greater insurance. If private funding and delivery share of Australian health services, and the replace some public responsibilities extent to which this is or is not desirable? (taking pressure off budgets) there is more justification for strong regulation, The answers to these questions rest in part consideration of public-private on how well the private sector, given its partnerships and possibly financial public competition, has performed within support. The latter interpretation is the Australia’s mixed system to date. They rationale for the Commonwealth also depend on how the private sector government imposing a range of itself views its future prospects in this conditions on funds relating to lifetime challenging and volatile environment. community rating, pre existing ailment rules etc and approving premium rises. 6. Private sector performance

It also is the rationale for the original bed Containment of costs to the budget has day subsidy for private hospitals (removed been a powerful factor motivating in 1986-1987) and also the reinsurance governments to promote private sector pool (also phased out). In order to participation in the health system. encourage private insurance membership However in recent years there has also the government introduced in 1997 a been a perception that private involvement package of means tested rebates and will lead to higher quality, more levies, in 1999 a universal 30% premium competition and greater efficiencies (both rebate (largely to relieve the pressure on technical and allocative). But many of public hospitals) and in 2000 lifetime these preconceptions may not stand up to community rating designed to induce scrutiny.

So how well has the private sector rates and hospital acquired infections. performed within Australia’s mixed Much of these data are supplied on a system? voluntary basis to the Australian Council of Health Care Standards and are not I would like to say that I could answer this strictly comparable. This problem is question unequivocally but I can’t. Its compounded in the private sector. impact has not been well documented so at this stage there are many unanswered The rapid growth of day surgery centres questions.1 and elective surgery in the private sector has been interpreted by some as evidence For example, the presumption that private that the private sector is ‘cherry picking’ hospitals are relatively more efficient than the more profitable patients. It has also their public counterparts was the subject of been accused of refusing entry to elderly a study undertaken by Duckett and medical patients and transferring complex Jackson which provided limited evidence cases to the public system. (Victorian to the contrary. (Duckett and Jackson, DHS, 2003) This behaviour – to the extent 2000) To date no comprehensive that it exists – may simply be a reflection Australian study has been undertaken to of the sector responding rationally to the benchmark the two sectors properly. current incentives and payment schedules, Ideally, a technique such as data envelope which may favour particular services over analysis could be used. This tool, which is others in terms of the profit they can used to measure relative productivity (or generate (Bloom, 2002). If so, it could be technical efficiency), is able to capture the an indication of allocative inefficiencies in main sources of difference – including the system. those arising from scale of the operation and factors relating to other characteristics, Another question relates to how much such as hospital type and location.2 competition exists in the private hospital market. It would be expected that because The fact that there are very little reliable of the large number of private hospitals publicly available data on the quality of there would be a significant degree of care across the sectors is another source of competition. But as the Productivity difficulty in comparing the sectors. The Commission indicated in its report on Steering Committee for the review of private hospitals in Australia (PC, 1999a) Commonwealth/State service provision competition can occur at a number of noted the limited availability of indicators levels so the answer to this question is not of quality outcomes for public hospitals. straightforward. (Steering Committee, 2003). It records piecemeal information for the public For example, competition can occur: hospitals relating to accreditation rates, patient satisfaction, unplanned readmission • between private hospitals for private patients, but this is largely dependent 1 A partial and now somewhat dated picture is on the hospital’s ability to attract provided in inquiry and research reports undertaken doctors and secure contracts with by the Productivity Commission and its private health insurers so there is little predecessor, the Industry Commission (IC (1997), price based competition. PC(1999a), Steering Committee (1998))

2 The Productivity Commission has successfully • between private and public hospitals applied this technique in an international for private patients, but they may benchmarking study of railway performance operate in largely different markets (PC, 1999b). (with public hospitals admitting the

more urgent, seriously ill and/or specification of the contract and allocation chronic cases, while private hospitals of risk. The contract involved the NSW treat less urgent elective patients). government paying all finance charges, including for areas devoted to private • between private hospitals for doctors patients; separate charging for diagnostic based on the quality of facilities and and medical services; and limited external equipment, which may lead to a accountability. hospital ‘arms race’ and have adverse impacts on public hospitals in the The outcome is a hospital with among the context of doctor shortages. highest per patient costs in NSW, largely borne by government. The NSW • between private hospitals for government learnt from this experience contracts with private health funds, when establishing its contract for the but the development of genuine market Hawkesbury hospital in 1997. The in this respect is inhibited by the Wentworth Area Health Service chose regulatory environment and concern only to tender with not for-profit groups to that the funds have ‘excessive’ deflect community opposition to a non- bargaining power. government operator after the Port Macquarie experience. The experience • between private companies for State also influenced the structure of the and Territory government contracts contract and level of scrutiny of the to build, own and/or operate public contracting process. An attempt was made hospitals, that is competition for the to allocate risk to the party best able to market. bear it. For example, Fletcher Construction accepted most risk relating to design and Another unanswered question is whether construction; the operator (Catholic Health the mode of ownership (for-profit or Care) assumed most of the operating risk; religious/charitable) delivers different and the government accepted the risk for outcomes in terms of efficiency, quality of non emergency, elective public patients care and competition. Perhaps of most and any changes to interest rates or interest is whether the modality of private government policy. However, competition sector involvement in delivering and/or for the market was limited to just two financing public hospital services leads to tenderers. different outcomes. To my knowledge no comprehensive research into the Other contractual arrangements had more comparative efficiency gains resulting serious repercussions on the private from various contractual arrangements and contractor. In the case of the Latrobe co-locations has been undertaken but there hospital in Victoria, the contractor, are some partial case studies which are of Australian Hospital Care (AHC), entered interest (for example, Hawkesbury into an unrealistic casemix-based BOO Hospital (Steering Committee, 1998)). contract in 1998. It had unrealistic expectations of what could be delivered at Perhaps the most visible failure was the the contract price, possibly reflecting a NSW Port Macquarie hospital BOO misjudgment about the relative ability of a contractual arrangement, one of the private operator to achieve economies in earliest in Australia (the hospital opened in treating public patients. The upshot was November 1994). The contract was with the company faced major financial Health Care of Australia, a for-profit group problems and has since been taken over by ran by the Mayne Group. Significant Health Care of Australia (which in turn has problems arose in relation to the been experiencing major financial

difficulties in its overall operations and is First, we do know that the initial response likely to be sold off by its parent company, – largely encouraged more by lifetime the Mayne Group, in the near future). 3 community rating – was a reversal in a long term decline in private health These negative experiences are reflected in insurance coverage (from 30.1% in similar accounts from California. (Gardner December 1998 to 45% by June 2001). and Scheffler, 1998). Underpinning these The health funds experienced an improved experiences are cultural and other risk profile as the young and healthy differences between the sectors. The joined and many private hospitals have public sector has often demonstrated a lack experienced high levels of demand and of skills in developing and monitoring relatively high occupancy rates. However, contracts, whereas the private companies more recently we are observing a slight bidding for contracts have often had reversal in net private insurance uptake limited experience with certain disease and the experience of the funds has classes of public patients. worsened as the first year waiting periods expired. Apart from the potential adverse impact on governments, private companies or both, In addition, it is interesting to note that the there is a danger that such arrangements net contribution of private health insurance could lead to the erosion of professional to total health expenditures and hospital altruism in public hospital care. But such expenditures continued to fall steadily altruistic behaviour forms an important after the introduction of the government source of social capital (on which the measures, although the decline may have public sector in part relies), which as a halted in 2000-01 with a slight reversal result could be diminished. 4 observed (Figure 1). The medium and longer-term outcomes of the change are A final question is whether government yet to be experienced. financial support for the private sector (in particular through the 30% rebate) has Second, there have been some reports of taken pressure off the public hospital problems of access to private hospitals. system. Again the answer is unclear. According to a Commonwealth Existing research has produced conflicting Department of Heath and Ageing results. (For example, see Butler, JRG, discussion paper (2002) there have been 2002; Access Economics, 2002; complaints about: Healthcover, 2003) While not entering into this debate I would like to make just • older, medical patients unable to three observations which reflect the access private hospital beds difficulty of answering this question unequivocally. • local private hospitals having no contract with private insurers 3 Mayne’s poor financial performance appears to partly reflect a lack of management understanding • a lack of private providers in some of the peculiarities of the health market, especially rural areas the central role of the medical profession in its hospitals. Other factors include a blow out in nursing and medical indemnity insurance costs. • private emergency departments on regular ambulance by pass 4 Social capital is an evolving concept that can be defined as relating to social norms, networks and • private hospitals allocating more beds trust that facilitate cooperation within and between to particular surgical procedures. groups. (PC, 2003)

Any perception that patient choice is Commonwealth’s policy position limited could contribute to discontent with regarding the 30% rebate and states’ the private insurance product and the drop positions on contracting out. It also faces out that is now being observed. uncertainty regarding the future uptake of private heath insurance, which in turn Finally, recent hospital separation data reflects whether it is perceived as an from Victoria indicate that between attractive product (particularly by the 1996/97 and 2001/02 private hospital young) and cyclical fluctuations in the activity increased by 36% but public economy. hospital activity also rose 20% and the increase in the absolute number of public Private hospitals may also be vulnerable to hospital separations was relatively larger structural changes in the private health in the same period (Victorian Department insurance market. Currently they deal with of Human Services, 2003). Thus, use of 44 largely state-based insurers (although public hospital treatment in that state has the market is dominated by a few large not diminished but the counter-factual is funds in each state). There are signs that unclear, that is what it would have been many small funds are facing low profits without Commonwealth intervention. and possible takeover by the larger funds such that in future private hospitals could 7. Future prospects for private health face an even greater power imbalance in care negotiating contracts in a far more concentrated industry. The current disjunction between public and private sector funding and service The private sector also faces risks from a provision has been identified by Scotton as changing public perception about one of four features of the current privatisation and its role within the Australian system imposing barriers to economy generally. While the Australian greater efficiency and potentially offering public generally values choice and positive incentives for inefficiency. (PC, accessibility and tends to support the 2002)5 Without major reform of the existing public/private mix in health system these factors will contribute to services, a backlash would be likely if ongoing instability and pressure for there were to be a significant shift towards continuing incremental change. a market based, privately focused system. A recently conducted survey relating to This implies that the private sector will privatisation and government subsidies face a high degree of sovereign risk from found increased scepticism among such changes to government policy which Australians of all political persuasions could impinge on it directly or indirectly. about further privatisations (Sikora, 2003). Its market share is at the whim of 54% of respondents objected to more governments – especially the privatisation and only 9% fully supported more. Instead there was a significant level 5 The other features contributing to inefficiency of support for government subsidies of are: health services (71% of respondents), far higher than for any other goods and - program multiplicity and fragmentation services. - funding and service overlaps between Commonwealth and State governments Thus any further contracting out of public hospital services would need to be handled - remuneration arrangements usually unrelated with great care. to outputs and outcomes.

Finally, like the public sector, the private therefore have some confidence in the sector must also address the challenges overall results which showed per capita associated with rapid technological costs within ten percent of each other. advances and an ageing population. References Understanding this challenging and volatile environment is essential for the Access Economics (2002), Striking a Balance, future prosperity of the private sector. Report for the Australian Private Hospitals Meanwhile, governments need to be alert Association, Canberra to the potential dangers of greater inequities and inefficiencies if Australian Institute of Health and Welfare AIWH (2002a), Health Expenditure Australia inappropriate regulatory, contracting or 2000-01, Health and Welfare Expenditure financial reforms are adopted. Series no 14, cat no HWE 20, Canberra

Postscript Australian Institute of Health and Welfare AIWH (2002b), Australian Hospital Statistics Providing a reliable assessment of the 2000-01, Health Services Series no 19, cat no relative performance of the public and HSE 20, Canberra private health sectors within Australia is an almost impossible task. Whatever Bloom, Abby L (2002), “The funding of assumptions are applied, one cannot private hospitals in Australia”, Australian compare like-with-like. They face Health Review, vol 25, no 1, 19-39 different financing structures and incentive Butler, J.R.G (2002),”Policy change and systems and perform defined roles within private health insurance: did the cheapest the overall health system. Public hospitals policy do the trick?”, Australian Health are more likely to treat the more seriously Review, vol 25, no 6 ill cases and provide a “safety net” or residual role (Duckett and Jackson, 2000) Commonwealth Department of Health and whereas private hospitals can be efficient Ageing (2002) “surgical mills”, treating elective cases Access to Private Hospitals: Discussion with greater amenity. Medical research Paper, presented at the Forum on Patient and training are mostly undertaken in Access to Private Hospitals, February public hospitals. Public hospitals face Duckett, S.J and Jackson, T.J (2000), “The constrained budgets, whereas private new health insurance rebate: an inefficient hospitals are less constrained in terms of way of assisting public hospitals”, MJA, vol patient throughput and medical and 172, 439-42 pharmaceutical use. Feachem, R.G.A, Sekhri, N.K and White, K.L The study by Feachem, Sekhri, and White (2002), “Getting more for their dollar: a (2002) comparing the British National comparison of the NHS with California’s Health Service and the US Kaiser Kaiser Permanente”, British Medical Journal, Permanente health maintenance 324, 135-143 organisation was able to overcome to obstacles to compare like-with-like. Gardner, L.B and Scheffler, R.M (1998), “Privatisation and health care: shifting the Despite delivering a different service mix risk,” Medical Care Review, Fall, 215-54 and facing different factor costs, both Healthcover (2003), “Deeble critique identifies operate in similar environments based on flaws, waste and failure of health insurance rational incentives (in turn based on policies,” April-May, 11-19 constrained budgets and responsibility for the care of a defined population). One can

Industry Commission (1997), Private Health Insurance, Report no 57, AGPS, Canberra

Productivity Commission (1999a), Private Hospitals in Australia, Commission Research Paper, AusInfo, Canberra

Productivity Commission (1999b), Progress in Rail Reform, Inquiry Report no 6, AusInfo, Canberra

Productivity Commission (2002), Managed Competition in Health Care, Workshop Proceedings, AusInfo, Canberra

Productivity Commission (2003), Social Capital: Reviewing the Concept and its Policy Implications. Research Paper, AusInfo, Canberra

Sikora, J (2003), “Tastes for privatisation and tastes for subsidisation: Have Australians been getting cold feet”, Australian Social Monitor, Institute of Applied Economic and Social Research, vol 6, no 2, June, 34-40

Steering Committee for the Review of Commonwealth/State Service Provision (1998), Implementing Reforms in Government Services 1998, AusInfo, Canberra

Steering Committee for the Review of Commonwealth/State Service Provision (2003) Report on Government Services 2003, vol 2, AusInfo, Canberra

Victorian Department of Human Services DHS (2003), Private insurance rebate and private hospital issues, Internal working document

Figure 1

Private health insurance sharea of total health expenditures and hospital expenditures, 1994-95 to 2000-01b

% share total health expenditures % share hospital expenditures

16 18

14 17

12 16

10 15

8 14

6 13

4 12

2 11

0 10 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

means tested rebate LCR Share total health expenditures Share hospital expenditures

a Net of 30 per cent premium rebate; includes taxation rebate. b Preliminary estimate. Data source: Australian Institute of Health and Welfare (AIHW 2002a).

Participant and Biography Listing

Participant Listing

Australian Delegation United Kingdom Delegation

Mr Alan Bansemer Sir John Coles Professor Bruce Barraclough Sir Nigel Crisp Mr Jim Birch Mr Michael Davis Mr Craig Bosworth Professor Peter Donnelly Ms Joanna Davidson Ms Pam Garside Mr Philip Davies Mr Scott Greer Ms Anne De Salis Mr Justin Jewitt Mr Ron Donato Dr Graham Lister Associate Professor Judith Dwyer Mr Dave McNeil Mr Robert Griew Ms Claire Perry Professor Jane Hall Professor Ray Robinson Ms Jane Halton Mr Simon Stevens Dr Diana Horvath Mr Stephen Thornton Mr Gavin Jackman Mr Nicholas Timmins Mr Mark Metherell Mr Derek Wanless Dr Louise Morauta Mr John Wyn Owen CB Ms Mary Murnane Mrs Helen Owens Dr Sue Page Mr Russell Schneider Mr David Webster Dr Tarun Weeramanthri Professor Judith Whitworth Mr Roger Wilkins

Support Staff

Ms Lynette Glendinning (rapporteur) Mr Tony Kingdon Mr Bob Eckhardt Ms Libby Camp

Biography Listing all National Health Service (NHS) Chairs organisations. He has over twenty year’s

Jane Halton was appointed Secretary of experience of management in the UK’s the Australian Government Department of NHS, having worked at hospital, Health and Ageing in 2002. Prior to this, community health, health authority, Ms Halton was Executive Co-ordinator, regional and national levels of the service. Department of the Prime Minister and Mr Thornton has extensive experience of Cabinet (PM&C), responsible for advising promoting the NHS overseas and has been on all aspects of Australian Government a member of the Governing Council of the social policy including health, social International Hospital Federation. He is security, employment, education, currently a member of the Commonwealth immigration and indigenous policy. In Fund of New York’s International addition, she was responsible for the Programme in Health Policy Coordinating Office of the Status of Women and for Committee. Mr Thornton is a member of advising the Minister Assisting the Prime the Governing Council of the Open Minister for the Status of Women. Prior to University and a trustee of two charities joining PM&C in July 1998, Ms Halton operating in the developing world: was national program manager (First Christian Blind Mission (UK) and Aquaid Assistant Secretary) of the Australian Lifeline Fund. He was a member of the Government’s Aged and Community Care NHS Modernisation Board 2001-2 and has Program in the Australian Government recently been appointed a Commissioner Department of Health and Ageing, with of the Commission for Health Audit and responsibilities for long-term care. She Inspection (CHAI). Mr Thornton is a was responsible for the development and Fellow of the Royal Society of Medicine implementation of the Australian and was appointed a Commander of the Government’s Aged Care Structural Order of the British Empire (C.B.E.) in the Reform Package. She has held the 2001 New Year’s Honours List. position of Principal Adviser, Corporate Development Group in the Australian John Wyn Owen took up the post of Government Department of Human Secretary, the Nuffield Trust, on 1st March Services and Health and Assistant 1997, having previously been Director- Secretary, Community Care. Ms Halton General of NSW Health in Australia and, has also had experience in the Department until 1994, Director of NHS Wales. His of Finance, Social Security, Australian career has spanned public and private Bureau of Statistics (ABS) and the sectors and is based on a commitment to Research School of Social Sciences at the research, education and training as a Australian National University (ANU). foundation for effective management. Mr Owen is: an Honorary Fellow of the Stephen Thornton has been Chief Faculty of Public Health; Honorary Executive of The Health Foundation, an Member of the Royal College of independent charity that aims to improve Physicians; Fellow of the University of health and the quality of healthcare for the Wales Colleges, of the Australian College people of the United Kingdom (UK), since of Health Service Executives, of the Royal the beginning of 2002. Mr Thornton was Society of Arts; and an Honorary Doctor previously Chief Executive of The NHS of the University of Glamorgan. He is a Confederation, the membership body for member of the Institute of Medicine of the National Academy of Sciences and was

made a Companion of the Order of the with a focus on improving health service Bath in the Queen’s Birthday Honours in quality and health services reform. He has 1994 and an honorary member of the held senior Board posts on Women’s Gorsedd of Bards in 2000. Hospitals Australia, the Australian Health Care Association, the Australian Council Participants on Health Care Standards and the Australian Association of Paediatric Alan Bansemer is an independent Teaching Centres. He has also lectured in consultant. His background includes Health Services management at the extensive experience as a senior health University of South Australia and is administrator, with special expertise in currently a Council Member of the State-Federal funding processes and health University. policy. Craig Bosworth is an Adviser to Federal Bruce Barraclough AO is Chair of the Minister for Health and Ageing, Senator Australian Council for Safety and Quality the Hon. Kay Patterson on access and in Health Care, and Chair of the NSW financing policy. He has responsibility for Institute for Clinical Excellence. He also the Pharmaceutical Benefits Scheme and Chaired the Expert Advisory Group pharmaceutical subsidy reform, Inquiry into Claims Related to ‘Hepatitis C diagnostics and technology, pharmacy Transmission through Blood Products in ownership, private health insurance, 1990’ for the Federal Health Minister in private hospitals and information 2002. Professor Barraclough is a member technology/management issues. He was of the Australian Medical Council and the formerly the Health and Social Policy Medical Services Advisory Committee, adviser to the Victorian State Opposition and a Past President of the Royal Leader. Craig is a qualified Manipulative Australasian College of Surgeons. He is Physiotherapist and is currently the Medical Director of the Australian undertaking his Masters in Business Cancer Network and is Professor/Director Administration. of Cancer Services, Northern Sydney Health and Sydney University. Professor John Coles retired as Permanent Under- Barraclough has a special interest in the Secretary of State in the Foreign and field of endocrine surgery. Commonwealth Office (FCO) and Head of the Diplomatic Service in November 1997, Jim Birch has been employed as Chief after a 37-year career. Overseas postings Executive of the Department of Human included as High Commissioner to Services since March 2002. Immediately Australia for three years from 1988. From before taking up this appointment, he was 1991 he was Deputy Under-Secretary of Deputy Chief Executive in the Attorney- State for Asia and the Americas in the General’s Department and the Department FCO in London, and Permanent Under- of Justice. He completed a Bachelor of Secretary of State from 1994 until his Health Administration in 1983. During his retirement. From 1981-84, Sir John served career Mr Birch has held a number of as Private Secretary to the then Prime Chief Executive Officer (CEO) positions Minister, Margaret Thatcher, advising on within the public health sector, including foreign affairs and defence policy. Sir at the Whyalla Hospital, the North John is also Chairman, Sight Savers Western Adelaide Health Service and, International. more recently, at the Women’s and Children’s Hospital. Over the last decade Nigel Crisp is a Cambridge graduate in he has also served on a number of Boards Philosophy. He has a background in

community work (where he worked for years working with the British Department some years in Liverpool and of Health and Social Security in London Cambridgeshire) and in industry, prior to followed by 14 years as a specialist health joining the NHS in 1986. He became the care management consultant with Coopers General Manager for Learning Disabilities and Lybrand in the UK and New Zealand. in East Berkshire and moved in 1988 to In 1997 Mr Davies joined the New become General Manager (and later Chief Zealand Ministry of Health as a Deputy Executive) of Heatherwood and Wexham Director-General. He left at the end of Park Hospitals which provided a wide 2000 to spend 18 months as a Senior range of general hospital and mental health Health Economist with WHO in Geneva services in East Berkshire. He moved to before taking up his current position. Oxford in 1993 to become Chief Executive of the Oxford Radcliffe Hospital, which Michael Davis became Chief Executive of incorporates the John Radcliffe and Catalyst Healthcare Management Limited Churchill Hospitals and is one of the (a subsidiary of Bovis Lend Lease) in largest academic medical centres in the 2000, and in 2003 was also appointed country. He became South Thames Chairman of Lend Lease Europe’s new Regional Director of the NHS Executive in health development business. Catalyst’s February 1997 and London Regional two founding and principal sponsors are Director on January 1999. Sir Nigel took Bovis Lend Lease and the Bank of up his new role as Chief Executive, Scotland. Mr Davis leads Catalyst’s Department of Health and NHS on 1 policy development and relationships with November 2000. He was awarded a KCB NHS Trusts, the Department of Health and in the New Year’s Honours 2003. a wide network of other agencies.

Joanna Davidson is currently head of Anne De Salis has a diverse career Social Policy Division in PM&C, with spanning both the public and private responsibility for policy advice and sectors. Ms De Salis is currently the development on social policy issues Group Executive Corporate Culture and including health, education, employment Communications in Medical Benefits Fund services, community services, income of Australia Limited (MBF). She is support, immigration and Indigenous responsible for spearheading the policy. Prior to this Joanna had a broad development of a performance culture for range of experience working for the health insurance mutual, as well as government departments, including covering government relations and Health, Social Security and Finance, on advocacy, human resources and board policy and program administration. relations. Prior to joining MBF she worked for nine years at AMP, starting in Philip Davies joined the Australian 1994 as Head of Government Affairs Government Department of Health and before becoming a line manager Ageing as a Deputy Secretary in August responsible for sales in AMP’s Corporate 2002. He is a member of the Department’s Superannuation business in 1996. In 1999 Executive, and has specific responsibility she moved on to create a new retail for the Acute Care, Primary Care, Health financial services start-up business called Services Improvement and Medical and AMP Direct. Before moving to the private Pharmaceutical Services Divisions. He sector, Ms De Salis enjoyed several years brings to the role almost 25 years’ as a Senior Adviser to the then Prime international experience in health care Minister, Rt. Hon. Paul Keating, covering policy and management. After graduating issues as diverse as immigration policy, in Mathematics, Mr Davies spent five the republic debate and the operations of

government. She joined the Keating office Edinburgh. Before returning to Edinburgh from the Commonwealth Treasury, where he was Director of Public Health for four she had worked for many years as an years with Iechyd Morgannwg Health in economic adviser. In 1991, she became the Swansea. Prior to that he spent four years first woman to join Treasury’s senior as a Senior Lecturer at the University of executive service since Federation. Ms De Wales College of Medicine. Although Salis has held and continues to hold a focussed on service appointments, number of Board appointments, including Professor Donnelly has remained the NSW Financial Institutions academically active, and his doctoral Commission, the Association of thesis was on the topic of CPR training. Superannuation Funds of Australia, the He has trained in management at a number Technical and Further Education Board of of institutions including Harvard NSW and AMP Superannuation Ltd, one Postgraduate School of business of Australia’s largest trustee companies. administration where he completed the programme for management development Ron Donato is an economist in the School in 1994. He has published widely on of International Business and at the Public Health and related matters. University of South Australia. He also has Professor Donnelly is the elected Vice- lecturing interests at Flinders University of President of the UK Faculty of Public South Australia, where he delivers a health Health Medicine. He is a former President economics course to masters students in of the UK Association of Directors of health services administration. His field of Public Health. research is in health economics, and he has lectured, consulted and published Judith Dwyer is the Head of the extensively in this area. Mr Donato has Department of Health Policy and consulted to State and Australian Management at the La Trobe School of government health agencies in the area of Public Health. She coordinates the health program evaluation and on health Masters in Health Administration at La policy reform issues. He has also provided Trobe, and her major research and health economics training workshops for consulting work is in the areas of health health professionals from developing governance and policy and management countries under government and World reviews. Dr Dwyer is a former CEO of Bank funded aid programs. His current Southern Health Care Network in research interests centre on the economics Melbourne, and of Flinders Medical of health care financing reform. In Centre in Adelaide. With her colleague Dr particular, recent research has been in Sandra Leggat, she edits Australian Health relation to the application of diagnostic- Review. Dr Dwyer chairs the National based risk adjustment methodology in the Board of the Australian Resource Centre Australian context and the economics of for Hospital Innovations, is a member of contracting in health care. Mr Donato was the Health Advisory Committee of the also a key participant in the workshop on National Health and Medical Research Managed Competition conducted by the Council (NH&MRC) and is a Director of Productivity Commission in 2002. Yarra Valley Water. At the national level, she has experience as a member of the Peter Donnelly, a graduate of Edinburgh Board of the Australian Institute of Health Medical School, joined Lothian Health as and Welfare (AIHW), as well as serving Director of Public Health and Health on an AHMAC sub-committee, and on the Policy in April 2000. In addition, since national Executive of the Public Health 2002 he has held an honorary Chair in Association. She was a member of the Public Health at the University of Australian delegation to the World Health

Assembly in 1992, and has served in Administration from the University of numerous policy and governance bodies at Minnesota. State government and institutional levels. Lynette Glendinning is a founder and Most recently, she chaired the Governance principal of P.A.L.M. Consulting and Funding Task Group for the South Group, a consultancy practice in 1989. Australian ‘Generational Review’ of the P.A.L.M.'s mission is to provide high health system. Dr Dwyer works in China quality management consultancy services (teaching health care managers) and has to organisations to improve organisational, recently acted as a consultant to the workgroup and personal performance. Australian government on a project in Originally a psychologist leading Thailand. In 1998, she was awarded the residential rehabilitation programs, inaugural AMA Women’s Health Award Lynette then became a lecturer in for her sustained contribution to the organisational psychology in tertiary development of health services for women institutions. She holds a Bachelor of Arts in Australia, and in 2000 was appointed in Psychology and a post-graduate Adjunct Professor at the Institute for Diploma in Education from Sydney Health Services Research at Monash University and is a member of the Institute University. of Management Consultants of Australia, the Australian Institute of Training and Pam Garside has her own management Development, the Australian Human consultancy, Newhealth, specialising in Resources Institute and the organisational strategy and development in Institute of Public Administration of health care. She is a member of the Australia. visiting faculty at the Judge Institute of Management Studies (the business school Scott Greer, PhD is a Research Fellow of the University of Cambridge) where she with the Constitution Unit, University is Co-director of the Cambridge College London, where he is responsible International Health Leadership for the Devolution and Health project. Programme. She began her professional This study of health politics and policy in life in management in the NHS and England, Northern Ireland, Scotland, and subsequently spent 10 years studying and Wales includes interviews, partnerships working internationally based in the USA. with Northern Irish, Scottish and Welsh Since the mid-1980s she has worked as a researchers, a survey of health elites, and management adviser and consultant participant observation of health meetings. concentrating on the reform of healthcare A report will be published in 2004, systems, and leadership and management Territorial Politics and Health Policy development. Ms Garside is a member of (Manchester and New York: Manchester the Board of Quality and Safety in Health University Press). He has also organised Care, a British Medical Journal the international seminar series publication, Chairman of the Board of Decentralisation and Democracy. The Governors of the Royal College of Constitution Unit specialises in Nursing’s Institute of Higher Education, constitutional reform and comparative and a Board Director of the International constitutional studies. It is independent Women’s Forum Leadership Foundation and non-partisan, and the centre of a wide in Washington DC. She is co-owner and network of national and international Vice Chairman of the International Health experts. The Unit is funded by charitable Summit, USA and a Senior Associate of trusts, research councils and government the Nuffield Trust. She holds a BSc from departments. the University of Durham and a Masters Degree in Hospital and Health Care

Robert Griew has worked for over 20 the University of Sydney in 1968. For two years in the Health and Community years Dr Horvath was a member of the Services field. He started work in Faculty at the Johns Hopkins Hospital, Children’s Services and then in Child Care Maryland, USA, which led to involvement Policy, having in the process joined the in the development of community health Commonwealth public service as a services in Australia. After completing a graduate trainee. In the various Australian Masters Degree at the University of NSW, Departments of Health and Community she was involved in the management of Services he worked across Aged Care, Royal Prince Alfred Hospital for some 20 Public Health and Aboriginal health, years. Dr Horvath was the President of the running that last program for two years Australian Hospital Association 1993- when it had just transferred to the Health 1995 after 20 years as national councillor Department. Mr Griew has also and office bearer. She had a major role maintained academic and community with the NH&MRC and became its sector links and was CEO of the AIDS chairman in the early 1990s. She held the Council of NSW during the latter part of position of Commissioner with the Health last decade. He has also served as Deputy Insurance Commission (HIC) when it was Director General of the NSW Department both Medibank Private and responsible for of Ageing, Disability and Home Care. Mr the running of Medicare. She was Griew was appointed CEO of the Northern appointed an International Fellow of the Territory Department of Health and King’s Fund College, London. From 1996 Community Services in January 2003. to 1999 she served on the Trade Policy Advisory Council (TPAC) of Australia the Jane Hall is a health economist whose peak advisory trade policy body to the current research interests include the Federal Minister for Trade. Her extensive investigation of individual decision knowledge of health issues––operational making, valuation of health and health care and policy involvement––has placed her benefits, and social welfare measurement. on numerous working parties and Professor Hall is the founding Director of committees at State, Federal and the Centre for Health Economics Research international levels. and Evaluation (CHERE) and Professor of Health Economics in the Faculty of Gavin Jackman is the Chief of Staff to Business, University of Technology, Federal Minister for Health and Ageing, Sydney (UTS). Among her current Senator the Hon. Kay Patterson. He is her research projects are studies of media chief political and policy adviser and reporting of health policy issues, the manager of Parliamentary business. He evaluation of genetic testing, and the role was formerly the Senior Adviser to of private health insurance. Her previous Senator Patterson and, prior to this, had research includes economic evaluation responsibility for health and community studies in many areas of health services services policy in the Department of the and public health. Professor Hall is Prime Minister and Cabinet. He has also involved in health policy and planning been a policy adviser within the Australian issues both in Australia and Government Department of Health and internationally, and has served on Ageing. Gavin has a Masters Degree in numerous advisory committees and Public Policy from the Australian National working parties. University.

Diana Horvath is Chief Executive Justin Jewitt is Chief Executive of Nestor Officer, Central Sydney Area Health Healthcare Group plc, a FTSE 250 Service. She graduated in Medicine from Company and the UK’s largest

independent sector provider of personnel management and has a master’s degree in and services solutions to the fast-growing management science. UK healthcare market. Mr Jewitt joined the Group in May 1994 as Managing Dave McNeil has an honours degree in Director of BNA and was appointed to the Psychology. He has worked in the private Board in July 1996, becoming Chief sector as manager of a retail outlet and as a Executive in December 1997. He was musician, but the bulk of his career has previously Managing Director of two of been in the civil service. He is active in BET’s business services companies, prior his local community as a school governor to which he worked for Thorn EMI and and as a non-executive director on the Mobil Oil. Amongst other activities, management board for Citizens Advice. Nestor is responsible for looking after 25% His civil service career has covered (20,000,000) of the UK’s population for operational as well as policy primary care after surgery hours. responsibilities. In 1996, he was asked to lead a multi-agency project to co-ordinate Graham Lister is Chair of the College of a yearlong anti-fraud campaign. In 1998, Health charity that operates the Patient he was asked to assist in the setting up and Involvement Unit for the National Institute development of a new agency to scrutinise for Clinical Excellence (NICE) and the the work of local authorities in their Access and Choice Unit for the DoH. He is payment of benefits. He led a number of also Senior Associate of the Nuffield Trust inspections aimed at improving efficiency and Advisor to the Netherlands School for and offering best practice models. In 1998 Public and Occupational Health, working he joined the Department of Health as on health reforms in European Union (EU) assistant director of policy and accession countries. Dr Lister has advised communications in the new counter fraud on health care management and policy in and security unit. This included chairing the UK, Kenya, Cambodia, Hong Kong, regular meetings with his opposite Spain, Sweden, Italy, Denmark, the Czech numbers from Scotland, Northern Ireland Republic, Lithuania and Hungary. and Wales. In 2001, he moved into the Publications include international reviews mainstream of the department as private of: health reforms, information secretary to the Parliamentary under management, primary care, patient Secretary of State for health (Lords), involvement and self care. Recent work moving to become Senior Private includes input to the White Paper ‘Making Secretary to the Permanent Secretary and Globalisation Work for the Poor’, the Chief Executive of the NHS in 2002. National Scoping Study for NHS Direct and health futures projections for WHO Mark Metherell writes, from Canberra, and the Wanless Review. His Nuffield on national health policy for the Sydney Trust programmes include: Globalisation, Morning Herald. His interest in the area Women’s Development and Health, tracks back to the early 1980s, when he Information and Communications covered the establishment of Medicare as a Technology for Health, the medical reporter for The Age, Melbourne. Commonwealth Forum on Globalisation He held news executive positions with The and Health, The Global Health Award and Age and the Canberra Times before the UK Strategy for Global Health. Dr joining the Herald, and returning to the Lister was formerly the partner responsible health round four years ago. for healthcare management consulting at Coopers and Lybrand UK. He gained a Louise Morauta is currently First doctorate for work on public sector Assistant Secretary, Acute Care Division in the Australian Government Department

of Health and Ageing. In this role, networks with consumer and industry Dr Morauta has responsibility for financial groups. relations with the States and Territories on public hospitals. She also has Helen Owens was appointed to the responsibility for private hospitals, private Productivity Commission as a full-time health insurance, blood and fractionated Commissioner in 1998, following 5 years products and medical indemnity. From as Commissioner on its predecessor 1970 Dr Morauta spent a number of years organisation, the Industry Commission. in Papua New Guinea where she taught in Prior to that Mrs Owens was Associate the Department of Anthropology and Professor in Health Economics at the Sociology at the University of Papua New Centre for Health Program Evaluation, Guinea. Since coming to Australia, Dr Monash University. At the Productivity Morauta has worked in two other Commission Mrs Owens has special Australian Government Departments: the responsibility for matters relating to the Australian International Development social effects of economic adjustment and Assistance Bureau and the Department of social welfare service delivery. She holds Finance. a Bachelor of Economics (Hons.) and a Master of Economics from Monash Mary Murnane became Deputy Secretary University. Mrs Owens is currently the with the Australian Department of Health presiding Commissioner on the national in May 1993. After an early career in inquiry into the Disability Discrimination school teaching, university tutoring and Act 1992. She recently presided on a research, Ms Murnane became Deputy government commissioned study Director of the Tasmanian Department of investigating general practice compliance Community Welfare in 1978. Joining the costs associated with Commonwealth Australian Government in 1985, she programs, as well as an international became First Assistant Secretary of the benchmarking study of pharmaceutical former Office of Child Care. Before prices. Mrs Owens has led a number of taking up her current position, she was other health-related government inquiries, First Assistant Secretary of the including into the Pharmaceuticals Department’s Community Programs and Industry, Medical and Scientific Aged and Community Care Divisions. Ms Equipment Industries and Private Health Murnane oversees the Department’s Insurance. She has also directed a number Ageing and Aged Care Division, of other research projects in the health area Population Health Division, Office of including: private hospitals, public hospital Aboriginal and Torres Strait Islander contracting, hospital casemix funding, the Health, the Commonwealth Rehabilitation cost of alcohol consumption and supplier- Service, the Department’s Offices in induced demand. In 2002 she facilitated NSW, Tasmania, Queensland and the two Commission roundtables on health Northern Territory, and portfolio interests policy and managed competition. She has in the NH&MRC. Her responsibilities conducted many other major Commission encompass ageing and aged care, inquiries over a wide range of areas, population health including drug policy, including Research and Development, food policy and regulation, communicable International Air Services Agreements and diseases, health protection and biosecurity, Cost Recovery by Government Agencies. Aboriginal and Torres Strait Islander health services and infrastructure and Sue Page is a senior academic at the research. In her work, Ms Murnane University of Sydney’s Department of actively promotes a social policy Rural Health and President of the NSW perspective and maintains high level Rural Doctors Association. She is

involved in rural health advocacy, policy aims to improve services to patients by and planning through a variety of sharing good practice, supporting open multidisciplinary bodies including the debate and influencing policy. She was NSW Rural Health Action Group and the awarded the Order of the British Empire in NSW Aboriginal Maternal and Infant 1998. Health Strategy Committee, and is a Ministerial appointee to the NSW Rural Ray Robinson is Professor of Health Health Taskforce and the NSW Mental Policy at LSE Health and Social Care, Health Sentinel Events Review London School of Economics, and Senior Committee. At a Federal level, she has Fellow at the European Observatory on represented the Rural Doctors Association Health Care Systems. From 1993-98 he in the Red Tape Taskforce, Medicare was Professor of Health Policy and Attendance Item Restructure, and at the Director of the Institute for Health Policy national Indemnity meetings organised by Studies at the University of Southampton, PM&C. A rural GP from the far north and from 1990-93 he was Deputy Director NSW coast, her practice includes primary of the King’s Fund Institute, London. health care within an Aboriginal Earlier in his career he worked as an community. She is a Fellow of both the economist in HM Treasury and was a Royal Australian College of General Reader in Economics at the University of Practice and the Australian College of Sussex. He has also held visiting posts at Rural and Remote Medicine, and is a a number of universities in North America registrar Supervisor and Examiner. She and Australia. He has acted as a consultant also has post graduate training in to health authorities, government Psychiatry (eating disorders), Obstetrics, departments and international and the early management of severe organisations such as WHO, OECD and trauma. the World Bank. He has also carried out assignments for management consultants Claire Perry is Chief Executive of in Britain and overseas. From 1990-95 he University Hospital Lewisham NHS Trust, was a health authority non-executive a role she commenced early in 2002. UHL director and from 1993-95 vice chair of is a busy 3 star District General Hospital East Sussex Health Authority. Professor providing a deprived population with the Robinson’s work at LSE is concerned with full range of acute services plus some various aspects of health finance, tertiary specialties for a wider catchment. economics and management. He has Prior to this post Ms Perry led the published over 150 articles and seven development of the London Patient Choice books on health and social policy. His Project, introducing choice for elective most recent publication is Completing the patients through the rapid expansion of Course: Health to 2010, The Fabian capacity to achieve waiting time Society, 2003 (with A. Dixon). reductions. For two years before this she was Project Director modernising Russell Schneider is a political journalist, professional self-regulation systems for media administrator and author. Since nurses and midwives. Ms Perry was Chief 1983 he has been Chief Executive of the Executive at Bromley Health Authority for Australian Health Insurance Association, seven years until 2000 delivering primary which probably makes him the longest care services to a population and serving health lobbyist in Canberra. Mr commissioning community, acute and Scheider has worked as an adviser to specialist services. Ms Perry is recent past Federal Governments and Opposition, and Chairman and a founder Trustee of the worked closely with Ministers, Shadow New Health Network, an organisation that Ministers, Backbench Members of

Parliament and senior public servants. For also a former distinguished visiting fellow five years he wrote a weekly column on at the Policy Studies Institute. politics in The Australian newspaper. He is currently Chair of the International Derek Wanless worked for NatWest for Federation of Health Plans’ Panel on 32 years and was its Group Chief Public Affairs. As a representative of the Executive from 1992 until his retirement Australian private health insurance in 1999. He advises Governments and industry, Mr Schneider has had companies and is currently a director of responsibility for developing and Northern Rock plc and of Business in the promoting policies on health financing for Community, a Commissioner with the adoption by government. A number of Statistics Commission and a Trustee of the changes to health financing arrangements National Endowment for Science, have come about as a direct result of his Technology and the Arts. He graduated efforts. with a first class honours degree in mathematics at King’s College, Simon Stevens is Prime Minister Tony Cambridge. He qualified as a member of Blair’s Health Policy Adviser at 10 the Institute of Statisticians and of the Downing Street. He previously served as Chartered Institute of Bankers, of which he the policy adviser to the last two Health was President in 1999-2000. In 1999, he Secretaries at the Department of Health, was President of the Institute International where he co-authored the ‘NHS Plan’ and D’Etudes Bancaires. In 2001, he was ‘Delivering the NHS Plan’. He has asked to review the long-term trends worked in the NHS and internationally, affecting the UK health services over the including as a health authority director, next 20 years. His final report ‘Securing general manager of a psychiatric hospital, Our Future Health: Taking a Long Term and group manager at Guy’s and St View’ was published in April 2002. In Thomas’ hospitals in London. He studied April 2003, he was invited to provide an at Oxford and Strathclyde universities and update focussing on population health, was a Harkness Fellow at Columbia prevention and reducing health University and New York City Health inequalities. He also advised the Welsh Department. He is a board member of the Assembly Government’s Review of Health Health Equity Network. and Social Care in Wales (published in July 2003). Nicholas Timmins is Public Policy Editor of the Financial Times and author of The David Webster is currently First Assistant Five Giants (HarperCollins) a history of Secretary, Portfolio Strategies Division in the British welfare state from Beveridge to the Australian Government Department of the present day. At the FT he works with a Health and Ageing. One of the Division’s team of journalists covering health, priorities is to assist the process of ‘whole welfare, education, employment and home of portfolio’, strategic policy development. and legal affairs, and defines the job as A vehicle for driving this is the recently watching the boundaries between the established high level Policy Outcomes public and private sectors. He previously Committee. The division also covers worked for The Independent, The Times, international health issues and takes the the Press Association and the science lead in planning and co-ordinating the journal Nature. He has worked as a Department’s contribution to the political, employment and health government’s annual budget process. correspondent and won a number of Mr Webster has worked on health and awards for journalism and books. He is other social policy issues since 1988. For much of that time his work, in PM&C,

focused on headline health issues with a Australia’s Commonwealth Chief Medical Commonwealth/State relations dimension. Officer and Professor of Medicine at St Mr Webster’s earlier work in the public George Hospital, University of New South service was on foreign affairs and defence. Wales. She was made a Companion in the Before that he taught at a number of TAFE Order of Australia in 2001 for service to colleges and universities. the advancement of academic medicine and as a major contributor to research Tarun Weeramanthri works as a policy and medical research administration Community Physician with the Northern in Australia and internationally. Territory Department of Health and Community Services. He has had a long- Roger Wilkins holds the dual positions of term involvement with Indigenous health Director-General of The Cabinet Office in issues as a specialist physician, policy NSW, and Director-General of the New maker and researcher. He completed his South Wales Ministry for the Arts. He PhD in social medicine at the Menzies was appointed as Director-General of The School of Health Research in Darwin, Cabinet Office in 1992, and Director- before playing a key role in the General, Ministry for the Arts, in early development and implementation of the 2001. Mr. Wilkins came to the Premier’s NT Preventable Chronic Disease Strategy. Department in 1983 from an academic Dr Weeramanthri is a member of the position at Sydney University Law School National Diabetes Strategies Group. In where he also undertook postgraduate January 2004, he will take up the position studies in law and philosophy. He studied of Principal Medical Adviser in the NT. Administrative Law at London University. Judith Whitworth is the Director of the He has played a leading role in areas of John Curtin School of Medical Research reform in administration and law, in and Howard Florey Professor of Medical corporatisation and micro-economic Research at the ANU in Canberra, and reform, and in Commonwealth-State heads the High Blood Pressure Research relations. He is New South Wales’ Unit. Professor Whitworth is Co-chair of representative on the Senior Officials the WHO/ISH Guidelines for Management Committee for the Council of Australian of Hypertension and a member of WHO’s Governments (COAG). Mr. Wilkins is Global Advisory Committee on Health also a member of the Cultural Ministers’ Research, an Ambassador for Canberra Council Standing Committee. and an Ambassador for Women. She was 2002 Telstra ACT Business Woman of the Year. Professor Whitworth graduated from the University of Melbourne, which awarded her the degree of Doctor of Medicine in 1974, a PhD in 1978 and a Doctor of Science in 1992. Professor Whitworth is a Fellow of the Royal Australasian College of Physicians. She has practiced medicine and research extensively in Australia and overseas; she chaired the Medical Research Committee of the NH&MRC and is a Past-President of the Australian Society for Medical Research, and the High Blood Pressure Research Council of Australia. Professor Whitworth’s previous appointments were

Contact Listing

United Kingdom

Sir John Coles Ms Pam Garside Kelham, Dock Lane Senior Associate Beaulieu Judge Institute of Management, Hampshire S042 7YH University of Cambridge and Phone: 44 15 9061 2220 The Nuffield Trust Fax: 44 15 9061 2430 C/- NewHealth Email: 28 Milson Road [email protected] London W14 0LJ Phone: 44 20 7371 6107 Sir Nigel Crisp Email: [email protected] Chief Executive UK Department of Health and NHS Mr Scott Greer Department of Health Research Fellow Richmond House The Constitution Unit 79 Whitehall School of Public Policy London SW1A 2NS University College London Phone: 44 20 7210 5146 29-30 Tavistock Square Fax: 44 20 7210 5409 London WC1H 9QU Email: [email protected] Phone 44 20 7679 4977 Fax: 44 20 7679 4978 Mr Michael Davis Email: [email protected] Chief Executive Catalyst Healthcare Management Limited Mr Justin Jewitt 142 Northolt Road Chief Executive Harrow, Middlesex HA2 0EE Nestor Healthcare Group plc Phone: 44 20 8271 8255 The Colonnades Fax: 44 20 8271 8278 Beaconsfield Close Email: Hatfield [email protected] Herts AL10 86D Phone: 44 1707 255601 Prof Peter Donnelly Fax: 44 1707 255669 Director of Public Health Mobile: 7711 593000 Lothian NHS Board Email: [email protected] Deaconess House 148 Pleasance Dr Graham Lister Edinburgh EH8 9RS Rivendale Phone: 44 131 536 9163 Bulstrode Way Fax: 44 131 536 9055 Gerrards Cross Email: [email protected] Phone: 44 1753 889201 Fax: 44 1753 889200 Email: [email protected] Website: www.ukglobalhealth.org

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Mr Dave McNeil Mr Nicholas Timmins Senior Private Secretary to the Public Policy Editor Chief Executive of the UK Financial Times Department of Health and NHS 1 Southwark Fridge Department of Health London SE1 9HL Richmond House Phone: 44 20 7873 4650 79 Whitehall Fax: 44 20 7873 3931 London SW1A 2NS Email: [email protected] Phone: 44 20 7210 5801 Fax: 44 20 7210 5409 Mr Derek Wanless Email: [email protected] Wanless Review Team HM Treasury Ms Claire Perry 1 Horse Guards Road Chief Executive London SW1A 2HQ Lewisham Hospital NHS Trust Phone: 44 20 7270 5902 University Hospital Lewisham Fax: 44 20 7270 5671 Lewisham High Street Email: Derek.Wanless@hm- London SE13 6LH treasury.x.gsi.gov.uk Phone: 44 20 8333 3000 Fax: 44 20 8333 3333 Mr John Wyn Owen CB Email: [email protected] Secretary The Nuffield Trust Professor Ray Robinson 59 New Cavendish Street Professor of Health Policy London W1G7LP LSE Health and Social Care Phone: 44 20 7631 8456 London School of Economics and Fax: 44 20 7631 8451 Political Science Email: [email protected] Houghton Street London WC2A 2AE Phone: 44 20 7955 6233 Fax: 44 20 7955 6803 Email: [email protected]

Mr Simon Stevens The Prime Minister’s Health Adviser / Senior Policy Adviser 10 Downing Street London SW1A 2AA Phone: 44 20 7270 3000 Fax: 44 20 7930 9572 Email: [email protected]

Mr Stephen Thornton Chief Executive The Health Foundation 90 Long Acre London WC2E 9RA Phone: 44 20 7257 8034 Fax: 44 20 7257 8001 Email: [email protected]

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Australia

Mr Alan Bansemer Mr Philip Davies Consultant Deputy Secretary Namerik, Punrak Road Australian Government Department of PO Box 23 Health and Ageing Serpentine WA 6125 MDP 84, GPO Box 9848 Phone: 61 8 9525 2505 Canberra ACT 2601 Fax: 61 8 9525 2140 Phone: 61 2 6289 8410 Email: [email protected] Fax: 61 2 6285 1994 Email: [email protected] Professor Bruce Barraclough Chair, Australian Council for Safety and Ms Anne De Salis Quality in Health Care Group Executive Corporate Culture C/- MDP 46, GPO Box 9848 & Communications Canberra ACT 2601 Medical Benefits Fund of Australia Phone: 61 412 330 974 Limited (MBF) Fax: 61 2 6289 8470 Level 16, 97-99 Bathurst Street Email: [email protected] Sydney NSW 2000 Phone: 61 2 9323 9722 Mr Jim Birch Fax: 61 2 9323 9168 Chief Executive Email: [email protected] South Australian Department of Human Services Mr Ron Donato GPO Box 287 Lecturer Rundle Mall SA 5000 University of South Australia Phone: 61 8 8226 0726 (EA) GPO Box 2471 Fax: 61 8 8226 0721 Adelaide SA 5001 Email: [email protected] Phone: 61 8 8342 6332 Fax: 61 8 8302 0512 Mr Craig Bosworth Email: [email protected] Advisor Patterson Ministerial Office Associate Professor Judith Dwyer Level 3 Department of Health Policy and 4 Treasury Place Management Melbourne Vic 3000 La Trobe School of Public Health Phone: 61 3 9657 9577 La Trobe University VIC 3086 Fax: 61 3 9650 8884 Phone: 61 3 9479 2799 Email: [email protected] Fax: 61 3 9479 1783 Email: [email protected] Ms Joanna Davidson First Assistant Secretary Mr Robert Griew Social Policy Division Chief Executive Officer Department of the Prime Minister and Northern Territory Department of Cabinet Health and Community Services 3-5 National Circuit PO Box 4059 Barton ACT 2600 Casuarina NT 0811 Phone: 61 2 6271 5266 Phone: 61 8 8999 2766 Fax: 61 2 6271 5300 Fax: 61 8 8999 2800 Email: [email protected] Email: [email protected]

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Professor Jane Hall Dr Louise Morauta Director First Assistant Secretary Centre for Health Economics Research and Acute Care Division Evaluation (CHERE) Australian Government Department of University of Technology Sydney Health and Ageing PO Box 123 MDP 89, GPO Box 9848 Broadway NSW 2007 Canberra ACT 2601 Phone: 61 2 9514 4719 Phone: (02) 6289 8227 Fax: 61 2 9514 4730 Fax: (02) 6289 8846 Email: [email protected] Email: [email protected] Website: http://www.chere.uts.edu.au Ms Mary Murnane Ms Jane Halton Deputy Secretary Secretary Australian Government Department of Australian Government Department of Health and Ageing Health and Ageing MDP 84, GPO Box 9848 MDP 84, GPO Box 9848 Canberra ACT 2601 Canberra ACT 2601 Phone: 61 2 6289 8406 Phone: 61 2 6289 8400 Fax: 61 2 6285 1994 Fax: 61 2 6285 1994 Email: [email protected] Email: [email protected] Mrs Helen Owens Dr Diana Horvath, AO Commissioner Chief Executive Officer Productivity Commission Central Sydney Area Health Service Locked Bag 2, Collins Street East Building 11, Level 1 Melbourne VIC 8003 67-73 Missenden Road Phone: 61 3 9653 2102 (EA) Camperdown NSW 2050 Fax: 61 3 9653 2303 (EA) Phone: 61 2 9515 9827 (EA) Email: [email protected] (EA) Fax: 61 2 9515 9611(EA) Email: [email protected] Dr Sue Page President, Rural Doctors Association Mr Gavin Jackman (NSW), Treasurer, Rural Doctors Chief of Staff Association of Australia, Director of Minister Patterson’s Office Education, Northern Rivers Parliament House University Department of Rural Health Canberra ACT 2600 PO Box 3074, Lismore NSW 2480 Phone: 61 2 6277 7220 Phone: (NRUDRH): 61 2 6620 7570 Fax: 61 2 6273 4146 Fax: (NRUDRH): 61 2 6620 7270 Email: [email protected] Mobile: 0414 878 385 Email: [email protected] Mr Mark Metherell Sydney Morning Herald Mr Russell Schneider Press Gallery Chief Executive Officer, Australian Health Parliament House Insurance Association Ltd Canberra ACT 2600 4 Campion Street Phone: 61 2 62404024 Deakin ACT 2600 Fax: 61 2 6240 4022 Phone: 61 2 6285 2977 Email: [email protected] Fax: 61 2 6285 2959 Email: [email protected]

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Mr David Webster First Assistant Secretary Portfolio Strategies Division Australian Government Department of Health and Ageing MDP 51, GPO Box 9848 Canberra ACT 2601 Phone: 61 2 6289 7931 Fax: 61 2 6289 4050 Email: [email protected]

Dr Tarun Weeramanthri Northern Territory Department of Health and Community Services PO Box 40596 Casuarina NT 0811 Phone: 61 8 8999 2970 (EA) Fax: 61 8 8999 2800 Email: [email protected] (EA)

Professor Judith Whitworth Director John Curtin School of Medical Research Australian National University Box 334 GPO Canberra ACT 2601 Phone: 61 2 6125 2589 (EA) Fax: 61 2 6125 2337 (EA) Email: [email protected]

Mr Roger Wilkins Director-General The NSW Cabinet Office GPO Box 5341 Sydney NSW 2001 Phone: 61 2 9228 5300 Fax: 61 2 9228 3062 Email: [email protected]

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Program

Sunday 14 September 2003

Location: Members’ Dining Room, Old Parliament House, Canberra

4.00pm Registration

4.30pm Afternoon Tea

5.00pm Welcome, Introduction and Scene Setting – Federal Minister for Health and Ageing, Senator the Hon Kay Patterson and Mr John Wyn Owen

First Plenary – Policy Imperatives for the United Kingdom and Australia

Presentation of Papers:

• United Kingdom – Mr Simon Stevens

• Australia – Ms Jane Halton

• Discussant – Mr Nicholas Timmins

Plenary Discussions

6.45pm Summary and Close of Session – Ms Lynette Glendinning

7.00pm Welcome Reception – Members’ Bar, Old Parliament House

7.30pm- 9.30pm Welcome Dinner – hosted by the Australian Government Department of Health and Ageing, Members’ Dining Room

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Monday 15 September 2003

Location: Members’ Dining Room, Old Parliament House, Canberra

8.45am Second Plenary – Changing Health Economies – Design and Management

Presentation of Papers:

• United Kingdom – Professor Ray Robinson

• Australia – Mr Philip Davies

• Discussant – Dr Graham Lister

Plenary Discussions

Group Work

Groups will be asked to draw on their experiences, and the presenters, to identify the ‘lessons’ or advice they would give when it comes to designing and managing a mixed health economy

10.45am Summary and Close of Session – Ms Lynette Glendinning

11.00am Morning Tea

11.15am Third Plenary – Federalism and Health and Health Care

Presentation of Papers:

• Australia – Mr Roger Wilkins

• United Kingdom – Mr Scott Greer

• Discussant - Mr Alan Bansemer

Group Work

12.35pm Summary and Close of Session – Ms Lynette Glendinning

12.45pm Lunch

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Monday 15 September 2003

Location: Members’ Dining Room, Old Parliament House, Canberra

1.30pm Fourth Plenary – Public Health

Presentation of Papers:

• United Kingdom – Professor Peter Donnelly

• Australia – Mr Robert Griew

• Discussant – Professor Judith Whitworth

Group Work

2.50pm Summary and Close of Session – Ms Lynette Glendinning

3.00pm Afternoon Tea

3.15pm Fifth Plenary – Financing and Delivering Services

Presentation of Papers:

• United Kingdom – Mr Mike Davis

• Australia – Mrs Helen Owens

• Discussant –Mr Derek Wanless

Group Work

5.15pm Presentation of synthesised feedback from group reflections – Ms Lynette Glendinning

6.15-7.30pm Reception - hosted by Sir Alastair Goodlad, British High Commissioner, Westminster House

8.00pm Dinner – hosted by The Nuffield Trust at The Lobby Restaurant, Parkes

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Tuesday 16 September 2003

Location: Members’ Dining Room, Old Parliament House, Canberra

8.45am Country Working Groups

• Discussion of issues and recommendations for the UK and Australia and for bilateral working

10.30am Morning Tea

11.00am Sixth Plenary:

• Report of discussion, country group recommendations and recommendations for bilateral consideration

12.45pm Concluding Remarks – Mr Stephen Thornton

1.00pm Lunch

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