The new year has brought with it an increased focus on Medicare reform to ensure it remains fit for purpose. This means being able to deliver affordable care in an environment of significant change to the heath needs of Australians.
Medicare is one of the two foundational pillars of the federal government’s role in the public health system but there has been far less discussion about the other – the pharmaceutical benefits scheme.
Both Medicare and the PBS are decades old – the PBS had its roots in the 1940s. Both have been vitally important in the development of an equitable and comprehensive healthcare system. And both need major reforms to respond to changing patient needs, health practices and new treatments and technologies.
Politics provides a limited bandwidth for significant reform and can be influenced by “hot-button” issues. It would be a mistake for the federal government to narrow its health reform agenda to improving Medicare while ignoring other aspects of the system, including access to new medicines and devices.
Put in simple terms, improving access to doctors and specialists is not much good if Australians can’t receive or afford the treatments their doctors want to prescribe.
With responsibilities divided between state and federal governments and so many interests often in competition, health policy is one of the most challenging areas of public administration.
Self-evidently, our healthcare system is fundamental to the wellbeing of individuals and our community. With an ageing population and advances in treatments, the call on government resources continues to grow, and this has obvious fiscal implications. There is a risk the cost of Medicare reforms will crowd out other health reforms of equal importance.
Australia has developed a health system that is world class in terms ofits quality and accessibility. We often look across the Pacific to the United States which is the global centre of so much medical innovation but, despite spending more per capita on healthcare than any other nation (by a large margin), has a health system where inequality is deeply entrenched.
Innovation is changing how we treat many diseases and conditions. The advances we are seeing in many fields of medicine are profound and exciting, giving new hope for many patients. But they are also testing our healthcare system, which was developed for a different time.
As chair of the House of Representatives health committee I saw this firsthand. With the support of my deputy chair, Dr Mike Freelander, we completed a comprehensive 18-month inquiry in late 2021 which examined how we can ensure Australians benefit from new treatments and technologies.
In an area of policy which is often politically contested, we were able to deliver a major bipartisan report which was welcomed at the time by both then and current ministers, Greg Hunt and Mark Butler. The inquiry recommendations provide a roadmap for the type of reforms we will need in the short and medium terms.
What we found is that, in many areas, the current system of assessing and funding new medicines and technologies is likely to hinder rather than facilitate new treatments. This is most obviously demonstrated by the advent of precision medicine reflected in new gene and cell therapies.
These are breakthroughs that will allow treatments to be developed for individuals for many conditions including cancers and rare diseases, often providing hope where there has been little before.
The current PBS was designed for an era where medicines were developed for broad application for patients with a particular illness. It was not designed to assess subsidies for treatments that might be personalised for each individual, which is the hope precision medicine can offer. These are treatments that can cost in the many tens of thousands and will be beyond the reach of most Australians without government subsidies.
Improving the health technology assessment process is vital in a global environment where Australia is a small market. Cost, payment and process barriers need to be calibrated to ensure there are strong incentives for pharmaceutical and technology companies to enter our market so Australians have access to the newest of treatments.
Similarly, there is more to be done to support home-grown medical companies and innovators and to retain Australia’s attractiveness as a location for clinical trials. A strong clinical trial ecosystem is vital to ensure early access to medicines for many patients.
The Albanese government inherited a review process for our health technology assessment system which was in its formative stages, and it dovetails with the outcomes of the parliamentary committee inquiry. Its completion must be a priority.
New medicines and technologies rarely come cheap but upfront costs often bring long-term savings, particularly for chronic conditions that could otherwise involve years of health expenditure. More fundamentally, they save lives or shape the quality of life for so many Australians – and that’s surely worth the investment.
Trent Zimmerman is a former federal member for North Sydney and was chair of the House of Representatives health committee between 2016 and 2022
