In his latest Wonky Health column, Dr Tim Senior investigates the implications for healthcare of the Harper Review into competition policy.

He examines the ideology and the evidence that motivates both proponents and critics of competition in healthcare, and concludes “to continue pushing an agenda in the health system promoting choice and competition is done despite the evidence, not because of it”.

He says: “We know that competition in health services doesn’t increase choice in what matters to people, it just chases the money.”

Read on to discover Senior’s own ideological stance…

By Dr Tim Senior

What’s the worst insult you can throw at a policy? Perhaps “Ideological”. This description has been used to dismiss the Renewable Energy Target review, the curriculum review and the whole budget.

I am old enough to remember when ideology meant “a system of ideas and ideals, especially one which forms the basis of economic or political theory and policy” and dictionaries still believe this.  In the current political climate, though, ideology is one of many synonyms that means “disagrees with me,” it is only ever possessed by opponents, and it’s only ever a really bad thing to have.

So it must have been with a sense of trepidation that the Harper review into competition policy published its draft report.  This review was set up by the Prime Minister and the Minister for Small Business in March 2014. Its scope was “in regard to achieving competitive and productive markets throughout the economy, by identifying and removing impediments to competition that are not in the long-term interest of consumers or the public interest.”

It’s a wide ranging review, applying competition principles to almost every aspect of Australian life, including supermarkets, energy and human services. The panel is headed up by Ian Harper, an economist “whose career spans government, academia and advising business,” who now works at Deloitte Touche Tohmatsu. He is joined by Peter Anderson, “a national business leader,” Su McLuskey, CEO of the Regional Australia Institute and Michael O’Bryan, a barrister in competition law.

Peter Anderson, one of the panel members, gets their defence in early, telling us reassuringly in a nice video that his aim is practical not ideological.

I’m not having any of it. Calling a policy ideological is not an insult, it’s just a way of failing to recognise your own ideology (which ends up with you writing something like The Forrest Review!).

Ideology is the values and assumptions that guide you in deciding what questions you will ask and where you’ll find answers. In short, the Harper Competition Review is highly ideological. That’s not an insult. It should be ideological, in that it should have a guiding vision about what makes a better world.

So let’s look at what it says about health, and see where our ideologies clash and where they agree.

Even to look at what it was that the Harper review was asked to do, it to peek in at a different set of values. The panel’s view is that competition policy should:

• make markets work in the long-term interests of consumers;

• foster diversity, choice and responsiveness in government services;

• encourage innovation, entrepreneurship and the entry of new players;

• promote efficient investment in and use of infrastructure and natural resources;

• establish competition laws and regulations that are clear, predictable and reliable; and

• secure necessary standards of access and equity.

In the health system, many of us would feel most at home with that last statement on access and equity. It’s difficult to disagree with efficient use of infrastructure and resources, though there can be profound disagreement about what that looks like. Making markets, choice and entrepreneurship an end in itself in the health system starts to sound like a different ideological tune.

What ideologies would I like to see?

I’d like to see a focus on health outcomes for the users of services – which is not the same as responsiveness. I’d like to be confident that we are doing what we know works because we’ve learnt from the evidence.

Let’s play! We dive straight in to section 8.4 on Professional Licensing and Standards – bear with me, it’s really exciting! Some submissions raise concerns about the reduction in competition from Medical Colleges restricting entry, and the reluctance of the AMC to accredit new specialisms. The Panel hedges its bets, saying some regulation is necessary for health, and some impedes competition.

This is fine if competition is the end you are trying to achieve. But what if a healthy population is what you are trying to achieve?

And, God forbid, what if you wanted to use some evidence to try and answer that question?

You’d be hard pressed to go past Barbara Starfield’s work showing that the health of populations improves with more primary health physicians (and better access to them). And population health gets worse by employing more specialists.

You might wonder if the deregulation of entry in to specialist medical colleges, or the creation of new specialties would increase the number of specialists, increasing competition while worsening public health.

You might also be forgiven for observing that deregulation and competition in medical specialities encourages people to go where the money is, in both speciality and geography, especially if university fees are deregulated. While equity and access are there in the panel’s principles, it seems to be trumped by competition.

Even if you want “more efficient use of resources,” the evidence from the US  seems to indicate that health systems become more expensive outside the public health system, and that physician fees are the main reason for this.

Moving on to section 8.10 headed Private Health Insurance, and we learn that 47% of Australians have Private Health Insurance, and find the Panel recommending they be allowed to cover primary care.

The only evidence cited for this is the Commission of Audit report in May. It’s not that hard to call on the expertise in the health system to wonder about the effects of this – in fact Croakey managed to do exactly this just a few weeks ago.

You’d think that if there was strong evidence that extending insurance into primary care improved health, we’d be hearing quite a lot about it. Sadly, the comparisons from the Commonwealth Foundation don’t suggest that this is the case.

We get a much more nuanced discussion in Section 10 on Human Services, which explores competition policy in aged care, disability care and health services. There’s an acknowledgement that “A consumer choice model is not the right one for all services,” which didn’t appear in the earlier discussions.

Having said this, the report then looks admiringly over at the UK choice agenda, and uncritically argues for increased diversity of providers of human services, including for-profit, not-for-profit and mutual or co-operatives.

Where’s the evidence?

If this was a very good idea, we might expect to find the literature littered with examples of increased choice and competition improving the quality of health services. But that’s not exactly the case.

In an analysis of the UK experience of increasing competition, there was some improvement in speed of treatment and convenience, but no change in quality of care.  Other research backs up the finding that you get minimal change in outcomes for a huge effort in change, often at the expense of huge opposition from health professions.

More worryingly, there is some evidence that increasing competition between hospitals results in worse mortality. It may result in lower costs, but even that is not clear. In General Practice more competition results in more prescribing for the elderly, and in worse quality. (A focus on the patient relationship improves quality, though. When will we see a report suggesting that?)

Perhaps things get better if we focus on patient choice, rather than competition. There’s not much evidence on this (if you know of any, please comment below) partly because it’s such a complex area. Choice depends on information (and pretty colours), with price (and out of pocket expenses) being a large driver of choice (not a bad thing, though it may leave people uncovered for particular conditions).

However, it doesn’t need much experience with reading nutrition labels or choosing phone plans to realise that providing information that matters to enable choices that are meaningful is not easy.

We are currently in a position where the information we make publically available doesn’t help people make choices and doesn’t improve health outcomes. Marketers, of course, are way ahead of us on this, finding ways of manipulating our decisions.

Which leaves us where, precisely? Well, to continue pushing an agenda in the health system promoting choice and competition is done despite the evidence, not because of it.

Denying that there is ideology behind this agenda means that there can be nothing at all behind it – if not ideology, then what? Denying any underlying ideology also forgets that the policy is contestable, and that health professionals with a different (non?) ideology based around collaboration, not competition, will continue to oppose the proposals.

So, let’s all acknowledge and celebrate our ideologies.

The Harper review panel can be safe in the knowledge that they are working in the dominant ideology of competition and choice.

But in the health sector we can be proud of having a different ideology. It’s one that says health outcomes are important. Every day we meet people who struggle in their daily lives because of sickness or disability. Every day we meet people whose contact with health services is in their caring functions, not their share price. And every day we use the evidence about what works because we don’t want to keep on repeating yesterday’s failed experiments.

We know that competition in health services doesn’t increase choice in what matters to people, it just chases the money. And we know, from the current UK experience, that if we are forced to work in a system whose values do not match ours, there is no smooth transition, only battles and misunderstanding and anger.

So my ideology is no niche historical ideology.

It is an ideology that asks “What works for all of us, not just the lucky few?” It is an ideology that wants to create healthy communities for all of us, not healthy bank balances for the few.

Being ideological isn’t an insult, it can be something to be proud of and worth fighting for.

You can make a submission to the Harper Review here. The closing date is 17th November


Further reading – three more takes on the Harper Review

Lesley Russell on the Harper review at Inside Story

Paul Smyth and Gerard Brody over at Power to Persuade look at different professional and consumer perspectives.


• See the previous editions of Wonky Health here. 


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