In the latest proposed tax reforms, the Prime Minister has floated the idea of states levying income taxes in order to pay for health and other state based programs. See this article by Michelle Grattan in ‘The Conversation’. If ever enacted this would see the states become the sole payer of the Public Hospital system.
Many health economists argue that a single-payer system for healthcare is most efficient. However current debate around single payer system is generally conducted through the prism of the USA Presidential campaign, where Bernie Sanders is advocating a single payer system.
In its purest form a single payer – usually a government – funds all health care. Theoretically at least, this offers a payer the opportunity of paying only for the most efficient care. Efficiency in health can be defined as the most clinically effective care for the least possible cost. Examples may include ‘hospital in the home’ programs, devolving some care from doctors to nurses and other allied health providers or employing the increasingly available options for remote monitoring for chronic care management.
Having the states become the sole payer for public hospitals may offer efficiencies in hospital care, but real efficiency gains would be limited because of the siloed nature of the health financing system as a whole. Silos include
Medical Benefits Schedule – Fee for Service for physicians and the odd allied health practitioner (Commonwealth)
Pharmaceutical Benefits Scheme – Commonwealth
Aged Care – Commonwealth
Private Hospital Admissions – Private Health Insurance subsidised by the Commonwealth
Public Hospitals – Currently State and Commonwealth Funding
Allied Health – Private Practitioners funded by rebate from private health insurance and consumer payments
Health Minister Sussan Ley has proposed a new Healthier Medicare Package in order tackle some of these issues for chronic disease.
However a long way to go to realising big efficiency gains.