Dr Arn Sprogis

It is clear that the Australian healthcare system is in the first stages of a major disruption - the scale of which will be as great or greater than the impact of Medibank more than 30 years ago. 

This disruption is being driven by the need to resolve the two great health challenges of our time - how to best manage chronic and complex care and avoidable hospital admissions, and who should do so.  

While 30 years ago, the disruption was driven by clear Federal Government policy, today it is happening in an environment of confused, absent or complete withdrawal of government policymaking.

Strangest of all has been the ambivalence and vagueness of governments' approaches to private health insurers and their role in primary care. 

The first thing to say about insurers is that it is long overdue that they take up a role in improving the quality and consistency of care in their core business of funding private hospital care and perhaps at least in part, into what is traditionally seen as public hospital care. 

We are now in an era with a welcome increase in longevity, and unwelcome increase in chronic and complex conditions.

In this era, improving the quality of hospital care or avoiding it entirely can't be done without the central involvement of general practice. 

Insurers have finally seen the critical nature of this relationship and are acting rapidly and decisively.

Nowhere is this more obvious than in the discussions about what insurers' relationship might be with the soon-to-be established Primary Health Networks (PHNs), and whether they will have a role in tendering for networks - an idea already mooted by some insurers.

My view is that private insurers won't tender for PHN contracts and the reasons are simple:  

  • First, the idea that one insurer could have a monopoly position in a region without deeply compromising the existing competitive arrangements with other insurers  is untenable - at least to the other insurers.
  • Even more importantly, regional communities would be deeply suspicious of a centralist, national corporate deciding their resource allocations and health directions when they have no track record at a regional population level. Communities will want their own community members and clinicians to take the leadership of PHNs.
  • Last, private insurers have little or no experience, or capacity, in dealing with general practice in all its complexity.

What private insurers do have in spades is organisational capacity to focus on the hospital avoidance and inter-related chronic and complex disease task, and act on it in real time over long time frames.

The mechanisms by which private insurers can act to achieve system disruption do, however, revolve around whether they have a relationship with PHNs and what responsibility PHNs are given by government. 

If PHNs are to achieve the first recommendation set out in the Horvath report to "integrate the care of patients across the entire health system in order to improve patient outcomes", they will be very powerful forces for improving the healthcare system across both public and private sectors.1 

In this scenario, private insurers are likely to bid for the opportunity to be preferred providers in delivering integrated care and will rapidly try to tie up contract arrangements with individual general practices (or their corporate equivalents).

The alternative scenario is that PHNs are not given any responsibility of consequence "to integrate the care of patients".

If this happens, no doubt private insurers will go about setting up their own regional PHN-type networks for their members with the aim of cutting hospital admission, reducing variability of specialist care and improving quality care.

So, precisely because we have what appears to be a policy vacuum, we may finish up with a very different health system and a radically changed experience for our communities. 

Whichever way things go for PHNs, general practice is the key to success in improved quality of care, and private insurers are set to play a key role in the process.

In simple terms, the dominance of secondary and tertiary care systems has peaked and that of primary care is on a rapid rise. 

The question is: what organisations will take on the challenge and be the disruptors of the current system? Amid the current policy silence, it is likely the most focused organisations with the clearest objectives will dominate.