The Medicare Local Review Is Out. E Health Hardly Mentioned

Here are the recommendations and analysis.

3          Discussion and Recommendations

It is my considered opinion that there is a demonstrable need to reduce fragmentation and improve integration across the health care system, using clinical pathways across sectors to improve individual patient outcomes.  Our health system is generally designed for episodic care, when nowadays many illnesses are chronic and complex, requiring multiple integrated and coordinated services centred on the ongoing needs of patients.  To enable this, we need organisations that can work in partnership with the broader health system and facilitate better integration, coordination, access and care pathways.  Medicare Locals were a response to this challenge.  However, in their current form, as a national network, I do not regard them as appropriate or effective to successfully achieve these outcomes. 

There are a number of design elements that I consider essential for any organisation intended to reduce fragmentation and improve the integration of patient care across the entire health system.

3.1        Patient outcomes can be improved through better integration of health care

Many of people I spoke to as part of this Review held the view that without addressing fragmentation – both within the primary health care sector, and more broadly across the health care system – patient care will continue to be compromised and the health system investment will not be maximised.  The solution proffered is that a small number of regional entities is required to link up the parts of the health system to allow it to operate more effectively and efficiently.  Such entities must focus on improving patient outcomes through collaboratively working with health professionals and services to integrate and facilitate a seamless patient experience.  In their current form, Medicare Locals cannot fulfil this role.  They are constrained by their lack of clear purpose, variability, conflicts of interest (provider vs. purchaser) and lost goodwill with general practice.  New entities in this space must have a clearer purpose and role, and focus on being system enablers. 

I have considered what such organisations could be appropriately called.  Many ideas have been presented to me, but I keep coming back to Primary Health Organisations (PHOs).  I believe the name needs to reflect the organisations’ focus, which is the primary health care sector, as the starting point for integration, as this is the ‘shop front’ of the health care system.  Such a name should inspire professional ownership within that sector, provide a sense of place within the broader health system and be understandable for patients, carers and the broader community.  The PHO name also aligns with common international nomenclature, which would assist Australia to engage in dialogue internationally on lessons learnt.

For PHOs to be effective, it is critical that their boundaries (or rather those of their Clinical Councils and Community Advisory Committees) are aligned with LHNs, while reflecting relevant local and community needs.  This will facilitate collaborative working relationships and reduce duplication of effort.

Recommendation 1

The government should establish organisations tasked to integrate the care of patients across the entire health system in order to improve patient outcomes.

Recommendation 2

The government should consider calling these organisations Primary Health Organisations (PHOs).

3.2        General practice engagement is paramount

Any attempt to improve integration in the primary health care system requires general practice to be front and centre.  I appreciate that the original intent of Medicare Locals was to broaden the net of professional engagement within the primary health care sector, but this appears to have come at the expense of GP goodwill.  This goodwill needs to be rebuilt if any future organisation is to be successful.  Comprehensive professional engagement is still required, however it must be recognised that GPs are by their nature the first authoritative point of contact for primary health care, they start the patient on their care pathway and remain critical to their ongoing care.

To this end, I consider it essential that GPs have a significant presence within the corporate structures of any future primary health care entity.  My preference is for locally relevant Clinical Councils to be established that have a significant GP presence and broad clinical membership, including from LHNs.  These Councils would interact directly with the PHO Board.  I see these Councils as having influence in inter-sectoral collaboration, developing and monitoring integrated care pathways, and identifying solutions for service gaps.  Participation on Councils should be voluntary.  The voice and opinions of the Council will directly inform the deliberations of the PHO Board on matters such as, local and regional priorities, investment strategies, and primary health care professional and business support needs.

Recommendation 3

The government should reinforce general practice as the cornerstone of integrated primary health care, to ensure patient care is optimal. 

3.3        Vision and design principles

I put forward the following as an overview of PHOs.

Patients with chronic diseases such as cardiovascular disease and respiratory disease do not receive optimal care in many instances due to the fragmentation of services.  The role of the PHO is to work with GPs, private specialists, Local Hospital Networks (LHNs), private hospitals, aged care facilities, Indigenous health services, NGOs and other providers to establish clinical pathways of care that arise from the needs of patients (not organisations) that will necessarily cross over sectors to improve patient outcomes. 

The PHOs may well perform an important facilitating role in undergraduate and vocational medical and other clinical training.

Evidence shows this will reduce unplanned hospital emergency department presentations, admissions and re-admissions and patients will benefit from better health care in the community rather than having to use hospital services inappropriately.

Not all regions across Australia are equally serviced.  The role of the PHO is to work with the GPs, Commonwealth and state health authorities, LHNs, and communities to identify gaps in health services and work in partnership with these organisations to source the appropriate services.

PHOs will provide practice support to strengthen general practice to improve patient care, including assisting general practice with the adoption of electronic health records.

The success of PHOs will be known through a small number of outcome based indicators.

There are a number of design features that will facilitate the establishment of effective and efficient PHOs.  

PHOs should:

·         be companies incorporated under the Corporations Act 2001 and selected through contestable processes;

·         have skills based Boards – without restriction on membership – advised by Clinical Councils and Community Advisory Committees through mandated Memorandums of Understanding (MOUs) and Standard Operating Procedures (SOPs) to ensure transparency and define roles and responsibilities;

·         establish a Clinical Council and a Community Advisory Committee in each LHNs (or clusters of LHNs) with which they are aligned as ‘operational units’:

o   Clinical Councils with a significant GP presence and involving primary health care professionals, public/private hospital clinicians, should be established to ensure ongoing local clinical engagement within PHOs.  Councils, aligned with LHNs provide a direct link between clinicians and the Board for effective local decision-making, particularly in terms of liaising with LHNs and developing clinical care pathways.

o   Community Advisory Committees, based on the same catchments as Clinical Councils, will provide a community voice into the Board decision-making and activities, particularly in regard to service gaps.

·         have ongoing engagement with national and local clinical bodies to ensure consistency and evidence based decision-making;

·         operate at a sufficient size to achieve benchmarked economies of scale;

·         have clear performance expectations tied into their Commonwealth contracts, with outcomes based performance indicators aligned to national and local priorities;

·         engage state and territory jurisdictions to develop structures that are most appropriate for each jurisdiction and region; and

·         engage broadly across health sectors, including public, private, and NGO sectors.

I do not see the need for a national body for PHOs.  A membership driven peak body to support the corporate needs of PHOs is best left to emerge, if required, without the investment of the Commonwealth.  There are existing national bodies, such as the National Health and Medical Research Council (NHMRC) and the Australian Commission on Safety and Quality in Health Care that could provide PHOs with the clinical expertise, share innovations, successes and failures of PHOs.  It may be that jurisdictional PHOs see more merit in networking at a state level to leverage greater integration.  Regardless, decisions around support should be left to PHOs.

3.4        Achieving an effective and efficient PHO

Recommendation 4

The principles for the establishment of PHOs should include:

·         contestable processes for their establishment;

·         strong skills based regional Boards, each advised by a number of Clinical Councils, responsible for developing and monitoring clinical care pathways, and Community Advisory Committees;

·         flexibility of structure to reflect the differing characteristics of regions;

·         engagement with jurisdictions to develop PHO structures most appropriate for each region;

·         broad and meaningful engagement across the health sector, including public, private, Indigenous, aged care and NGO sectors; and

·         clear performance expectations.

Recommendation 5

PHOs must engage with established local and national clinical bodies.

Recommendation 6

Government should not fund a national alliance for PHOs.

 

I have identified an option that I believe should deliver the Minister improvements in patient outcomes by establishing new regional Primary Health Organisations (PHOs).  These regional PHOs would replace the existing national network of Medicare Locals and the AML Alliance. 

PHOs would be selected through a transparent competitive tender process and contracted to the Department of Health with explicit obligations and performance expectations, consistent with the vision and design principles outlined above and guided by national priorities.  Medicare Locals and other interested parties would be welcome to make a submission to operate a PHO. 

Individual PHOs would be responsible for determining appropriate organisational and operating structures consistent with the above design principles, but tailored to regional circumstances.  At the local level, Clinical Councils and Community Advisory Committees would be responsible for ensuring the PHO is accountable and relevant.  They will work to identify local health care needs and gaps in services and implement local pathways and innovative solutions to improve health outcomes.  In addition, PHOs could use out-posted staff or engage third parties (through competitive tender) to act on behalf of, and be accountable to, the PHO and support the needs of Councils and Committees.  Where feasible these arms of the PHO should be co-located within existing services (such as LHNs) to facilitate integration on the ground.

The scale of PHOs would be such that they would have significant leverage and influence within their region and more broadly within their jurisdiction to foster more equitable engagements with LHNs.  In turn this scale is designed to improve administrative efficiency by consolidating all corporate, financial and administrative functions.  These efficiencies will free up a higher proportion of funding for frontline services.

The exact number of PHOs should be decided following discussions with state and territory governments, to ensure effective alignment with LHNs and other service sectors, and careful consideration of jurisdictional regional variations.  It would be expected that most states would have at least one metropolitan and one rural PHO, with the potential for single PHO’s in Tasmania, the ACT and Northern Territory.  The end result is that there would be far fewer PHOs compared to the current network of 61 Medicare Locals.

PHOs would deliver:

·         greater local GP involvement through Clinical Councils – increasing the recognition of the central role of general practice as the cornerstone of integrated primary health care;

·         increased capacity to strengthen relationships and work collaboratively with jurisdictions and LHNs to develop patient care pathways and address gaps in service delivery;

·         effective local engagement and accountability through Community Advisory Committees and increased engagement and opportunities for the private sector, corporate general practice, across the entire aged care sector, the Indigenous community and NGOs;

·         stronger, more focused organisations that can attract highly skilled corporate and operational staff including financial and management skills; and

·         administrative efficiencies meaning more funding goes to frontline services.

Recommendation 7

The government should establish a limited number of high performing Regional PHOs whose operational units, comprising pairs of Clinical Councils and Community Advisory Committees, are aligned to LHNs.  These organisations would replace and enhance the role of Medicare Locals.

3.5        Funding and purchasing role

To maximise the return on investment in PHOs, it may be possible for the Commonwealth to provide PHOs with increased flexible and programme funding.  Opportunities exist to devolve further responsibilities from the Department of Health or other agencies to PHOs.  The advantage of this approach is two-fold, first additional funding through PHOs will increase their authority and leverage to effectively engage with the primary health care sector, LHNs and jurisdictional governments; and second, local decision-making is likely to deliver greater benefits to patients and a higher return on Commonwealth investment. 

It is important that lessons from the activities of Medicare Locals inform the establishment of PHOs, to this end I believe that the Government should review the Medicare Locals’ after hours programme to assess the appropriateness and effectiveness of the current delivery strategy.  Medicare Locals were tasked too early with this sensitive programme reform, and it resulted in many of them having to learn their purchasing/commissioning skills by experimenting on after hours GP services.

The purchasing role of PHOs will be greatly aided by deregulating the contracting platform across the Commonwealth.  There is scope to learn from the complex contractual effort deployed for Medicare Locals where programmes were increasingly devolved, each with a unique set of reporting and administrative requirements.  This complexity has had an administrative impact on the amount of resources available for frontline services.  The Department of Health’s grants management reforms has the potential to make doing business easier.  Within this context, I believe that there may be merit in further transitioning programme funding to flexible funding that requires PHOs to deliver on key performance indicators.  This would make PHOs truly responsible for local needs, allow regionalism to flourish and reduce administration drain on both sides of the contractual agreement.

PHOs, once they are fully established, would be well placed to facilitate and/or administer a range of Commonwealth funded programs, working with LHNs and other local entities to link up the system.  Teaching in such an environment would enable future practitioners to work most effectively in this future paradigm.

There is no need for PHOs to directly deliver services, except where there is demonstrable market failure, significant economies of scale, or absence of services.  The exact parameters for this definition would need to be worked out.  PHOs should be providers of last resort and their decision to directly provide services should require the approval of the Department of Health.

Recommendation 8

Government should review the current Medicare Locals’ after hours programme to determine how it can be effectively administered. 

The government should also consider how PHOs, once they are fully established, would be best able to administer a range of additional Commonwealth funded programmes.

Recommendation 9

PHOs should only provide services where there is demonstrable market failure, economies of scale, or absence of services.

3.6        Performance information and monitoring

To enable PHOs to perform effectively, reporting requirements and processes need to be streamlined, with a focus on measureable outcomes.  Aligning PHO performance reporting to LHN outcomes (such as avoidable hospitalisations and re-admissions) and national priorities will go a long way to ensure a real sense of purpose and collaboration within local health care services. 

The primary health care sector does not have access to significant data to inform decision-making.  Most of what we know about interventions in this sector is based on fee-for-service data via Medicare.  Little is known about the outcomes achieved, costs and interactions at the patient and practice level, or access trends.  There are some great examples of shared information or linked data, but these only occur in pockets and are often constrained by administrative, collaborative and/or legislative factors.  The eHealth agenda will have the potential to harness practice information resources and improve service planning thereby contributing to a more robust primary health care data set.  PHOs need to be at the forefront of enabling the eHealth agenda, supporting professional adoption needs, applying clinical pathways and demonstrating the power of information for care coordination.

Regardless, PHOs will require a repository of reliable quantitative data to inform performance judgements.  These data would be best shared through the development of interoperable systems that can extract and exchange output and outcome information.  Such a system of exchange would reduce reporting burden and allow for more efficient and effective performance monitoring.  The establishment of Medicare Locals failed to identify preferred data systems, and unfortunately many developed or purchased systems in isolation of the network and at great cost.  There is merit in identifying system preferences for PHOs to ensure that they can communicate effectively with the Department of Health via a standardised exchange portal.  It is important that the primary health care sector starts to contribute more robust data to better inform our understanding of the broader health system.

Recommendation 10

PHO performance indicators should reflect outcomes that are aligned with national priorities and contribute to a broader primary health care data strategy.

3.7        Implementation risks and strategies to deal with these

Large regional PHOs should be selected through contestable and transparent processes that support the establishment of cost effective entities.  Commonwealth funding to Medicare Locals would need to be rolled back and appropriate processes will need to be in place to minimise impacts on patient care – ensuring continuity of care for individuals. 

Although reducing the number of organisations could also be perceived as limiting or eroding local relevance and/or autonomy, particularly in high performing Medicare Local catchments where relationships with local stakeholders are well established; the goodwill of stakeholders could be effectively channeled through membership of Clinical Councils and Community Advisory Committees.  These structures would present an opportunity to capture the enthusiasm of existing Medicare Local stakeholder and advocates, and also those disenfranchised GPs who are keen to play a part in a new and invigorated organisational agenda. 

Finally, there is the potential for reform fatigue to erode positive relationships and goodwill, a PHO narrative is needed that clearly articulates the value proposition for patients, GPs, primary health care providers and the broader community.

The setting up of these PHOs will need an effective strategy to ensure all stakeholders are properly informed and involved in establishing the different parts of the PHOs relevant to their roles.  This should ensure the positive relationships and goodwill essential to their success.

4          Concluding Comments

This Review has highlighted the potential to improve health outcomes through establishing PHOs to better integrated health care services.

Some Medicare Locals have achieved a great deal, however as a national network, they have failed to present a compelling argument to continue in their current form.  PHOs will build on the strengths of Medicare Locals, but by avoiding unnecessary corporate bureaucracy and duplication – a greater proportion of funding should be targeted to frontline services. 

General practice will have a key role in PHOs and, through Clinical Councils, a greater say in the governance and strategic direction of their local primary health care systems and development of integrated care pathways.  Similarly, local communities, through Community Advisory Committees, will have greater engagement to shape health services.

The future for primary health care is bright.

----- End Report.

See here for full report:

http://www.health.gov.au/internet/main/publishing.nsf/Content/review-medicare-locals-final-report

Looks like humongous change is coming.

I note little mention (3 small references) to e-Health.

Enjoy the browse.

David.