Beware Managed Care Dressed Up As Private Hospital Benchmarks - Australian Medical Association

Main Category: Public Health
Article Date: 27 Aug 2008 - 1:00 PDT

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AMA President, Dr Rosanna Capolingua, said the Government has launched a further attack on Australians who hold private health insurance.

"Australians have private health insurance so that they can have a choice of doctor and of hospital, and have their treatment when they need it," Dr Capolingua said.

"The AMA predicted after the Government's Budget announcement on the Medicare levy that health insurers would be looking to compensate by introducing managed care arrangements - now it appears that prediction is coming to pass."

In a speech this morning, Health Minister Nicola Roxon said in response to lobbying and recommendations from the private health insurance funds, the Government would implement benchmarks in the private health sector.

"This would allow private health insurers to make the choices for you," Dr Capolingua said.

"Your private health insurance fund will tell you who you can see and which hospital you should go to, and there will be waiting lists for treatment.

"This will be US style managed care in Australia, dressed up as Private Hospital benchmarks.

"Managed care means patients have less choice and longer waiting times for surgery. Just as we experience public hospital bureaucrats making decisions in the public sector, we will have health insurance bureaucrats making decisions for patients in the private sector.

"More importantly, managed care means the health insurer - not the doctor - decides on the type of medical care that the insured patient receives. Rather than making a decision based on what's best for the patient, the insurer is likely to make a decision on what costs the least.

"Obviously, this has the potential to seriously compromise the quality of care."

Ms Roxon admitted in her speech that performance reporting in private hospitals would allow insurers to pick and choose between providers of health care.

"Allowing health insurers to dictate which doctor you will see and which hospital you can go to, and to interfere with your clinical care, completely undermines the value of holding private health insurance," Dr Capolingua said.

"It may be in the interests of health insurers to save their bottom line, but it's certainly not in the interests of patients."

In its submission to the National Health and Hospitals Reform Commission (NHHRC), the AMA cautioned that linking public hospital funding to accountability and performance benchmarks would not automatically lead to good health outcomes.

"We've already seen what can happen when benchmarks are linked to funding - the allegations in Victoria that hospitals have been falsifying patient records to meet performance targets should act as a warning to the Federal Government," Dr Capolingua said.

"We need to make sure there is transparency and understand that hospitals and doctors cannot necessarily be compared as they may cover different case mix and patient risk profiles. Health benchmarks should not be used for perverse incentives which may lower patient care.

"By all means have honest reporting and use the information to improve systems and services.

"But the data must not be used to reduce appropriate care to meet a performance indicator in order receive a performance payment or make savings at the cost of patients."

Australian Medical Association