Health Policy in the Market State

Linda Hancock

• Publisher: Routledge
• Year: 2020
• Print ISBN: 9780367718299
• eBook ISBN: 9781000257342
• Edition: 1
• Topic: Medicine
• Subtopic: Health Care Delivery

At a time of increasing demands on budgets, governments around the world are seeking to reduce health expenditure and introduce market-oriented reforms to the health sector. This is leading to profound shifts in the relationship between the state and the individual, as policy makers dismantle the welfare state and move towards a user-pays sytem. Health Policy in the Market State offers an overview of health policy in Australia, locating it within the broader context of power and interests analysis and shifts in government policy and public sector restructuring. It outlines the key issues in current health policy and assesses the strengths and weaknesses of specific policies and programs.Contributors include Ian Anderson and Maggie Brady, Mary Draper, Stephen Duckett, Liz Eckerman, Sophie Hill, Sharon Moore, Michael Muetzelfeldt, Janine Smith and Beth Wilson. Health Policy in the Market State is a valuable overview for students, as well as a comprehensive reference for health professionals and policy-makers.

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Rights and markets: What makes sustainable health policy?

LINDA HANCOCK

This book seeks to locate current health policy issues within the broader context of shifts in government policy and public sector restructuring. It thus places health policy analysis within the changing State and the issues of citizenship and rights this inevitably raises.

Economic rationalism has become the dominant policy paradigm in the late 1990s—underlying continuing economic and managerialist reforms begun in the 1980s. There has bgen a shift from the postwar welfare state, which evolved into the wage-earners’ welfare state of the 1980s and into the market or neoliberal state of the late 1990s. In health, this is epitomised by the creation of quasi or false markets and the ‘marketisation’ of health services, under policies of competition, contractualism and privatisation.

While governments struggle to balance political survival with a response to economic imperatives, profound changes are taking place in areas central to citizens’ welfare. The welfare state was criticised in the 1980s for its inefficiencies, mistargeted services, overspending, its capture by bloated public bureaucracies and poor response to specific needs (articulated b{ feminist, ethnic rights and consumer movements). In countries like Australia, New Zealand and Britain, it has been undergoing a transformation into what is referred to in this book as the ‘market state’.

To a large extent, the analyses, debates and concerns raised in relation to health are applicable to other areas such as housing, education, community services and social security, conceived here as rights or entitlements rather than merit goods. These areas are commonly identified as integral to participatory democracy, in systems where taxation is used redistributively to ensure basic living standards, dignity and access to basic social services. However, as Easton (1997: 165) notes, health reaches further than the welfare safety-net: ‘Health is the part of the Welfare State which most touches everyone, including the articulate middle class and the swinging voter’.

With growing demands on health budgets governments have instituted sweeping changes, as part of broader market-focused reform agendas associated with neoliberal or new right political agendas (King 1987; Marginson 1997; Williamson 1993). Across national boundaries, between governments of similar political persuasion, there has been much borrowing of ideas, specific reform models and programs, and consultants to implement them (Strange 1996). The internationalisation of neoliberal reform agendas is evident, although the major focus in this volume is on shift and change in health policy in Australia. A number of examples focus on the state of Victoria as the Australian epitome of the ‘market state’. Given the breadth and pace of changes since the election of the Kennett government in 1992, this is the direction in which other states following similar agendas are headed. Moreover, Victorian privatisation models are being promoted to developing countries by conservative think tanks—often without measured assessment or proper evaluation of longer-term impacts or cultural relevance.

With such dramatic shifts in health policy, both at federal and state/territory levels in Australia, critics perceive profound shifts in governance and the relationship between the State and the individual, with the State as contractor and the citizen redefined as consumer or customer. These trends, however, are not confined to Australia, and various contributors draw on overseas examples and research. While this book focuses on selected areas of health policy, the chief aim has been to highlight the analysis of key shifts in policy and governance and to raise questions about the future direction and impact of health policy.

A number of trends in health policy can be drawn from the book as a whole. Principal among these are trends towards:

• the individualisation of risk and responsibility—where increased service user cost-sharing or co-payments shift systems from a redistributive model based on taxation-funded universal access to a system based on the individual’s ability to pay; where individual responsibility replaces recognition of the structural effects of poverty, unemployment and disadvantage on health status;
• narrow budget accountability—with shifts in risk management and accountability under contractualism, and privatisation. The trend is away from broader ‘public interest accountability’ towards a narrowed form of quantitative ‘budget accountability’, thus blurring and transforming the accountability of government to its citizens;
• short-termism—whereby costs, risks and benefits are assessed in the immediate future, rather than the longer-term;
• bucket funding—where broad-banded funding, justified on the grounds of devolution and local flexibility, threaten to undermine centralised policy development of smaller national programs (such as women’s health), monitoring, accountability and services that cater equitably for disadvantage and diversity of need;
• the loss of program or service integrity, quality, and ‘time to care’—with the preoccupation with new managerialist techniques: cost savings, output measures, and usually quantitative performance measurement;
• capture by the acute sector—where programs such as community and women’s health, already marginal to the acute care sector, are being transformed and absorbed into acute care, relocated within the community, and environmental, occupational, social, preventive and public health agendas are marginalised; and
• the dominance of market values and economic efficiency—at the expense of other important values such as access, social equity (according to gender, race/ethnicity, age and disability), quality of care, catering for diversity of need, longer-term sustainability and democratic participation in an open and accountable system.

Such shifts raise questions about the nature of public responsibility, the role of public policy, the role of government and the State in relation to health, and the future wellbeing of citizens into the millennium.

Australia has a valued and well-respected health care system, with access to free medical and public hospital care under income tax-funded Medicare. It is a complex system involving both public and private sectors, about two-thirds government-funded, involving all tiers of government, with powerful public and private interests. It could easily change form if, for example, physician bulk-billing of medical service rebates provided under Medicare were to bg discontinued, if health service-users’ co-payments for services were to be raised to the point of widespread inequity, or if private insurance were to be instituted as a replacement for universalistic health insurance under Medicare.

A strong message from the contributors to this book is that present reforms based on managerialism and the marketisation of health have the potential to undermine valued aspects of the Australian health care delivery system. A number of policy initiatives have been introduced from the 1980s onwards in an attempt to address specific policy concerns and to provide broad frameworks for a more efficient and more equitable health system. Principal among these are the Better Health Commission (1986), Community Health Policy, National Health Goals and Targets (Health for All, 1988), and initiatives introduced under Labor’s National Health Strategy (including the Rural Health Strategy, National Mental Health Strategy and National Women’s Health Policy, 1989). Policy initiatives in single-issue areas include AIDS policy, men’s health, drugs, immunisation, domestic violence, child health, screening programs, health promotion, addiction, and Aboriginal health and nutrition. Initiatives under the National Health Strategy could be said to have approached health policy from the perspective of ‘health gain’ conceptualised as improvements in health status for groups and populations, as opposed to individual gain from specific treatment (drawing on the distinction made by Coote & Hunter 1996: 11).

At the federal level, National Competition Policy and the application of the Trade Practices Act to the health industry underlie the shift to ‘managed competition’ in health, under policies such as ‘casemix’. Declining private health insurance coverage has pushed COAG (the Council of Australian Governments) to renegotiate Commonwealth/state relations on Medicare and health funding. These policies are to some extent the ‘big lever’ issues in health, which determine other policy tensions at the ‘business-as-usual’ level. Despite the main positive aspects of the health system in Australia, concern is raised in various chapters about policies of managed competition, outsourcing and privatisation of clinical and non-clinical services, broadbanding of Commonwealth funding to the states, more strictly targeted services, and increasing consumer co-payments. To see these reforms as part of the market state is to locate them in an ideological context. (The shift to the market state is discussed in more detail in chapter 3.) This book aims:

• to equip readers with an understanding of the broader government policy, public sector restructuring policy context, the ‘marketisation of health’ and the impact of shifts to a market state;
• to equip students and health policy analysts with concepts, frameworks and analyses that will assist their understanding of key issues in health policy development and implementation in a climate of rapid and penetrating change;
• to provide analysis of trends in key issues in health policy; and
• to provide a checklist for assessing health policies and programs against such criteria as access and affordability, social equity, social democratic participation and efficiency, within a framework of citizenship rights.

Structural changes to the public sector, the blurring of public and private sectors and the dominance of ‘the market’ transpose new issues onto ongoing ones of power and interests in relation to health policy, traditional relationships within hospitals and medical encounters and in relation to access, equity, rights and citizenship.

Citizenship, rights and health

Framing such debates in terms of citizenship is a useful means of locating the State in relation to issues of rights, obligations and the citizen’s capacity to exercise the full dimensions of civil, political, social and economic citizenship. As O’Leary (1996) points out, citizenship incorporates an active legal and political participation in the shaping of the polity of the State and an identity shaped by belonging to that State.

A number of factors have contributed to a rise in rights discourse in relation to health. Historically, this was consolidated in Australia with the introduction of a universal tax-funded health care system under Medicare, giving access to free or subsidised pharmaceutical and hospital services along with a range of other health services. With better-informed health consumers who demand access to and quality of care, the language of citizenship rights increasingly frames health debates.

Health is central to wellbeing and is recognised as a fundamental and, indeed, a human right in international declarations. Article 25 of the Universal Declaration of Human Rights recognises rights to a standard of living that is adequate for health and wellbeing— including food, clothing, housing and medical care and necessary social services. Doyal and Gough (1993) recognise survival and physical health, and autonomy, as the two basic needs shared by all human beings.

Health is often referred to as a fundamental right. Without health, an individual cannot access other rights and cannot enjoy quality of life. Health is thus an essential component of active citizenship and participation in society. As Lenaghan (1996: ii) notes:

(C)itizenship implies entitlement, which in turn implies enforceability: citizens claiming and obtaining what is theirs by right. Health cannot be an enforceable ‘right’ but health services, as a means of achieving health, and the manner in which they are distributed, may be.

A continuing thread in this book is that citizenship is a core concept for analysing health policy and that citizenship differs in important respects from consumerism. As brought out in the chapters on health care funding (by Hancock and Mackey), contractualism (by Muetzelfeldt), casemix funding (by Draper) and co-payments (by Hill), rights within citizenship are increasingly differentiated from rights within consumerism. Citizenship rights are viewed as inalienable, enforceable and appealable. This implies clear lines of accountability in the public sphere, public participation in prioritysetting, and clear means of redress when service provision is deficient. In the current climate, health systems in Australia are clearly falling short of these standards.

Criteria for evaluating the adequacy of health policy

Central to this book is the belief that the health care system can be improved. One avenue to such improvement is the application of criteria against which the adequacy of health policies, programs and services might be evaluated. At the macrolevel, drawing on participatory democratic ideals, these criteria assume a strong role for government, the State and communities.

Much has been written about the problematics of independent national sovereignty in the face of global challenges and global economic pressures. However, nation-states still make choices in the ways they approach structural adjustment in their manipulation of the ‘big levers’ of government-including inflation, interest rates, unemployment, labour market regulation, regulation of the business sector, the size and role of the public sector, decisions about public sector expenditure and policies on competition, public asset sales and privatisation. Chapter 3 critiques the privileging of free market ideology and the driving force of a narrow conception of economic efficiency. How these structural policies are handled determines outcomes in such areas as health, housing, education and social security.

Reforms need to be evaluated against criteria that encapsulate the dimensions of ‘good’ health policy and practices that are sustainable in the longer term. These draw unashamedly on social justice goals and include economic efficiency. Political feasibility, although central to the political success of policy proposals, does not necessarily lead to good policy. These criteria include the following:

• Access and affordability. The central hallmark of a health system should be not the provision of programs and services per se, but affordability and equity of access.
• Social equity and social justice. The provision of health services should be fair and appropriate and should not discriminate on the grounds of class, gender, age, ethnicity/race, Aboriginality, disability, rurality or geographical location. (The latter is an important consideration in Australia, given concentrations of populations and economies of scale in major cities and along the eastern seaboard.) Social equity entails equal access according to need, rather than individual resources or ascribed status.
• Democratic participation and openness of decision-making. Health is historically an area where powerful medical interests have dominated. In the changed context of articulate and informed health care users and advocates, health systems need to make decisions in an open, responsive and participatory manner. The extent to which health care decisions are made openly will determine the extent of public acceptance and trust.
  The foundation of a strong and respected health system is built on openness of decision-making and involvement of stakeholders, with an emphasis on facilitating the involvement of historically weaker (consumer) interests. Such involvement makes for better decision-making with public services that reflect citizens’ or users’ needs and views, and inspires public trust and confidence. Current reforms can bg evaluated on the extent to which there are mechanisms in place for facilitating community involvement and how effectively such mechanisms work. As Coote and Hunter (1996: 5) point out, social solidarity can be enhanced through strategies that are ‘inclusive, and which build and maintain a shared sense of ownership and mutual benefit’.
• Longer-term sustainability. Reforms and programs need to be assessed on gains in the longer term in relation to maintenance of the public interest. Short-term gains may prove unsustainable....

Table of contents

• Cover
• Half Title
• Title Page
• Dedication
• Copyright Page
• Contents
• Acknowledgments
• Contributors
• Tables
• Abbreviations
• 1 RIGHTS AND MARKETS: WHAT MAKES SUSTAINABLE HEALTH POLICY?
• I ANALYSING HEALTH POLICY
• III MARKET STATE REFORM AGENDAS
• IV CATERING FOR THE DIVERSITY OF HEALTH CARE NEEDS AND INTERESTS
• Notes
• References
• Index