Australia’s health care system is at a crossroads, with experts urging a radical shift in how primary care is funded to address the nation’s rising rates of chronic disease.
The Grattan Institute’s Health Program Director Peter Breadon believes the current fee-for-service model is no longer fit for purpose, given the increasing prevalence of complex, multi-morbid conditions affecting Australians.
“We’ve long argued that you really need completely new funding models to deal with the new disease burden of Australia, which is rising rates of complex chronic disease,” Peter said.
He emphasised the need to move away from paying for individual medical services and instead provide funding linked to patients and their unique health needs.
The proposed solution, known as a blended funding model, would see most financial support allocated based on the patient, not the service. This approach would better support individuals with more advanced or complex health care needs, ensuring resources are directed where they’re needed most.
“That patient budget reflects that patient’s needs” Peter explained.
In regions where health care resources are thin and access is limited, he advocates for salaried models to guarantee care is available for all.
“Where you’ve got really thin markets with just not enough care to go around, we think you need salaried models there,” he said.
Central to the success of these reforms, Peter noted, is cooperation between governments. He believes that only by working together can they unlock new funding models and support the necessary changes in budget management and multidisciplinary care.
“You’ll really get the best results if you get governments working together to unlock those funding models but support the change that needs to come with it,” he said, highlighting the importance of reforming care delivery alongside funding.
Australia, Braden argues, possesses a “last mover advantage” in health care funding reform, meaning it can learn from the successes and failures of countries that have gone before. He pointed to New Zealand and Ontario, Canada, as cautionary examples.
“Some of those countries, like New Zealand and Ontario in Canada, they started out with a model that wasn’t great – it just did for age and sex, you know, getting more for looking after women, a little bit more for looking after older patients. And now they’ve changed that and New Zealand’s changing it right now.”
The new model in New Zealand prioritises funding for patients with multiple chronic conditions, a move he supports for Australia.
“They’re bringing in a model where you get more for treating patients who are multi-morbid,” he said.
As chronic disease continues to rise, experts like Braden believe it’s time for Australia to seize the opportunity to modernise its primary care funding and ensure long-term sustainability for the health care system.