GP Budget Holding for Australia: Panacea or Poison?

Australia has a lot in common with other OECD nations in its experience of health care expenditure and provision over the last decade. It has experienced many problems and concerns similar to those of other OECD nations, including upward pressure on health care costs, potential reductions in service quality and growth of waiting lists, particularly for public patients. In addition, Australia has experienced problems which might be considered unique due to its system of funding and geographical dimensions, such as the potential for cost shifting across levels of government and between public and private sectors, as well as a potential maldistribution of GPs across urban and rural areas. Whilst many nations, such as the UK and NZ, have pursued some variation of managed competition and the purchaser-provider split to address these problems, and the USA has moved down the managed care reform path, the common element has been the focus on budget holding for primary care. In contrast, Australia has been relatively unusual in not moving down a budget holding route, but has instead chosen incremental reform, such as through coordinated care, restrictions of doctor supply and the General Practice Strategy. The central issue, given this divergence of reform strategies to tackle similar problems, is to establish the likely success of each in achieving its objectives. Given the similarity of many of the core issues of concern, would we expect that the piecemeal Australian reform strategy will produce a more effective and efficient outcome than the more widescale reform of budget holding as pursued by other nations? In particular, with the introduction of the Australian coordinated care trials and the implicit budget-holding responsibilities that these imply, it is useful to examine whether wider GP budget holding for Australia would be a panacea or poison. This paper reviews the likely effectiveness and efficiency of the Australian reform strategy in light of experience and evidence of budget holding in achieving similar objectives: principally to stem upward cost pressures, reduce reliance on FFS remuneration, improve coordination of care, reduce the incentive for cost- shifting, reduce waiting lists and tackle the issue of rural-urban imbalance in distribution and access to GPs. Within each of these areas budget holding would appear to offer a more effective, or cost-effective, achievement of the desired objective than piecemeal reform; in theory at least. It is clear, however, that in practice numerous issues pertinent to the Australian context would need to be tackled, such as the requirement for enrolment, or registration, of populations with specific GPs. In conclusion, the authors recommend that budget holding for general practice be considered further as a viable, and potentially more efficient, alternative to the current piecemeal reform of the primary care sector.