The Productivity Commission’s study report on introducing competition into human services was quickly labelled as proposing privatisation of hospital, end-of-life and dental services.
This isn’t really the case. The report is actually quite cautious and not too radical. Whether the next phase of the commission’s work follows the same careful approach is yet unknown.
The Productivity Commission has adopted a two-stage approach; the report released today marks the end of the inquiry’s first stage. This “study report” does not make recommendations, simply “findings” based on its research and consultations. This report aims to identify priorities for the next phase of investigation.
What is peculiar about this report is that it is a report by a Commonwealth agency investigating state services – public hospitals, public dental services and specialist palliative care are all majority-funded by states – and providing advice which may not take into account the day-to-day service realities.
The report ignored primary medical care, an area where the Commonwealth has responsibility. The increasing corporatisation of general practice, and the potential for strengthening information about primary-care quality, probably should have been included. This leads one to ask what criteria were used when deciding what to cover.
More information is good
A theme of the report is that service responsiveness – of public hospitals, dental services and end-of-life care – would be enhanced if consumers knew more about what the services delivered in terms of outcomes (quality of care) and timeliness.
This finding seems pretty innocuous and obvious. Even so, the Productivity Commission put some fairly large caveats on its findings. For example, it noted health literacy – the ability to understand options and make choices about health care – is not evenly distributed, so patients with low levels of health literacy would need support to use information that may become available.
Patients at the end of their lives may be vulnerable to inappropriate pressure and may need to be protected.
There is now an immense body of literature about the value of public reporting of hospital outcomes, and the commission cites a systematic review which finds modest benefits from introduction of public reporting.
However, what is still unclear is how this improvement occurs. There is little evidence patients use the information provided. There have been calls to spend more energy working out what will improve care, rather than simply reporting on outcomes.
Notwithstanding that, contemporary best practice is to have more information about quality (and other measures) in the public domain. That is so even if this is only to stimulate hospitals and other agencies to be more aware of their own performance and thus enhance their own motivation to improve.
Competition is not a panacea
The terms “privatisation”, “competition” and “pro-competitive” reforms have many meanings. At one end of a continuum, competition could simply mean providing more information to general practitioners to help them with referrals. Further along the continuum, one could see enhanced ability of patients to choose among public providers. A more radical approach would be to allow choice between public and private providers.