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Interview

An Activist Health Minister In A Conservative Government

Australia’s Health System

 
Iglehart: Minister Wooldridge, because many of our readers are not familiar with the Australian health care system, it would be useful for you to briefly describe its major characteristics, and tell us whether it’s modeled after any other country’s system.

Wooldridge: It’s absolutely not based on another system; it’s uniquely Australian. It provides universal insurance coverage to our population of twenty million people through a compulsory public program and does so for 8.5 percent of our gross domestic product (GDP). About 67 percent of health care expenditures is covered through public sources of funding. Financing of the public insurance program derives from a 1.5 percent levy on taxable income and general revenue. The system has extraordinarily strong support among the Australian population—stronger, I might add, than the government’s old-age pension program. The system’s providers deliver a high quality of health care, and citizens have a wide choice of physicians. Almost uniquely in the Western world, we have a large private sector in health care, and my government has encouraged the growth of private insurance through financial incentives. We constrain spending through capped budgets on the pools of money from which physicians draw most of their medical service income.

Perceptions Of Health Care Quality

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Iglehart: Recently, at the Commonwealth Fund’s International Symposium on Health Care Policy, a survey of some 500 physicians in each of five countries (Australia, Canada, New Zealand, the United Kingdom, and the United States) was released. A substantial percentage of physicians in each of the five countries (in Australia, 40 percent) said that their ability to provide high-quality health care to patients had deteriorated over the past five years. What do you make of these findings?

Wooldridge: Frankly, I don’t place much stock in these point-in-time opinion polls. Trends over time are much more meaningful. The cynic in me says that numbers like these reinforce the view that no matter how much a country spends on health care, it’s never enough to totally satisfy the doctors. So I am enormously skeptical about findings like this. I’m much more interested in objective measures of quality, such as asking 500 people in each country who have been hospitalized in the past year their perception of the experience. Some would say—and the U.S. economist Uwe Reinhardt has—that unless physicians perceive that a health care system is in crisis, government is not doing an adequate job of constraining spending.

Charting A Public Health Course

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Iglehart: You have developed a reputation as a health minister with strong interests in prevention and public health. At the Commonwealth conference, for example, you characterized three prevention programs (immunizations, tobacco control, and skin cancer prevention) as the government’s "best health buys." As a physician, how did you arrive at this place in your thinking?

Wooldridge: Prior to entering politics, I always had a strong interest in public health as a practicing physician. I came to the view that for thirty years most of the political debate around health care had dealt with financing issues. There hadn’t been much debate about health per se. So I resolved to try to change the debate on some public health and other nonfinancing issues, to be a different kind of a health minister. Based on that thinking, we’ve accomplished a lot with improvements in the health of indigenous people, rural health, immunizations, and chronic disease management to some extent, particularly diabetes.

Iglehart: How supportive have providers and the public been on behalf of your more ambitious public health agenda?

Wooldridge: Most of the pressure to spend more money favors higher hospital expenditures to treat acute illness. That is what the public demands, and the doctors, too. And the media follow right along because with acute care there are identifiable victims. The immediate victim is irresistible to the media, particularly to television. If I didn’t spend a cent on tobacco control or other public health programs, that would be okay with the public. With public health, there’s no poor little child who’s dying because the health minister won’t give the money to keep him alive. I think that this is an almost intractable problem for anyone advocating on behalf of greater public health expenditures.

When I became health minister in 1995, there was a long-serving public servant at my first meeting with department officials. He took me aside and offered me some advice, the same advice he had given my predecessors. He said that the health portfolio has two parts: one part is health care financing, which is like a swamp full of crocodiles; the other part is public health, which is like a very beautiful garden. He said most ministers would like to spend more time cultivating the garden. My advice to you, he continued, is just make sure there’s a fence around the swamp so that the crocodiles can’t get out.

Iglehart: Given this political context, how have you managed to secure new resources for public health?

Wooldridge: Early on, I worked enormously hard on some of the mechanics of the financing issues, getting some of the uncapped medical budgets capped. By serving on the Parliamentary Budget Committee, one of only five ministers (and the only social policy minister) appointed to that committee by the prime minister (John Howard), I helped put together the whole of the government’s budget across all portfolios.

I have worked very hard to apply some price and volume constraints to pathology, radiology, and general practice, working with the profession, and to place a stronger evidence base into new funding for medical care, as distinct from pharmaceutical items. My colleagues in Parliament are a lot more sympathetic when I come back to them and say, "Okay, I’ve done this; now I want to invest more money in public health." I’ve put substantial additional resources into improving the health of the indigenous population. That came out of radiology. The shortcoming of such pursuits, in a political context, is that the payoff might be in ten to fifteen years, which can be several political cycles away. And certainly, by Australian standards, probably four or five health ministers.

Iglehart: How much leeway does a Cabinet minister have in Australia in charting a policy course?

Wooldridge: Actually, a fair amount. By promoting public health priorities, which might surprise people given my stance as a center-right minister in a conservative government, I can make a real difference in Australia. In this respect, Australia is different from other health care systems—well, from America’s at least. Because in America, no one’s in control. I mean, on a good day, I’m actually in control of a bit of our health care system, but in America it’s this sort of wonderful anarchy, which sits very well with the American style of doing things. In Australia we actually pay for pharmaceuticals nationally, and we pay for medical services nationally.

Iglehart: The Netherlands, New Zealand, and the United Kingdom have flirted with the managed competition model that has evolved in fits and starts in the United States. Has Australia shown an interest in experimenting with managed competition?

Wooldridge: Not really. When you have a system that actually works pretty well, that the public likes, that delivers universal care for 8.5 percent of GDP, encourages private-sector funding, offers substantial choice, and has successfully implemented cost containment policies, why would you even want to change?

Pharmaceuticals

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Iglehart: Australia has a unique system of deciding whether to subsidize the purchase of new pharmaceutical products. Does this multistep process work well in your opinion?

Wooldridge: Yes, I believe it does. The first step in the drug approval process is the Therapeutic Goods Administration (TGA), which is Australia’s equivalent of the U.S. Food and Drug Administration. The TGA tests drugs for their safety and efficacy and whether the manufacturing practices are appropriate. Once a drug clears these hurdles, it is ready for marketing. But if companies want their drugs to be available through the public insurance system, the products must be evaluated by the Pharmaceutical Benefits Advisory Committee. The committee is composed of independent scientific and pharmacological experts, who judge the clinical and cost effectiveness of a drug. This is the tough step.

The committee compares a new drug with other products already on the market. The government won’t pay an increment for a me-too drug but will pay for one with greater clinical effectiveness. Once a drug clears this process, it goes through another step—the Pharmaceutical Benefits Pricing Authority. The authority looks at the absolute price. If a pharmaceutical company estimates a certain volume of sales for a new product, we will say to them, okay, what if it exceeds that estimate by 50 percent? Is the company prepared to discount the price in that case? If a drug clears these three processes, then the health minister becomes involved. If the estimated cost is below a certain total, I can sign off on it myself. In a higher range, I do it jointly with the finance minister. Or beyond a further amount, the federal Cabinet must sign off on it. In the past four and a half years, in every case, we have taken the recommendations of the process and not really put a political spin on it.

Prevalence Of Medical Errors

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Iglehart: The (U.S.) Institute of Medicine published a report last year that estimated the number of medical errors that occur at the hands of providers of care. The number was quite staggering. Are medical errors a problem in Australia?

Wooldridge: The problem is as great, but probably no greater, but the numbers are different because the United States is a far more litigious society than is Australia. For example, in the U.S., for every 1,000 patients, physicians might report one case of postoperative headache, while in Australia the number would be forty-two. But such events seem not to be recorded in the U.S. because they could lead to lawsuits. In terms of major medical errors in Australia, I consider their prevalence a major problem. But no one really has shown me ways for government to intervene and make a difference.

Private Coverage In Australia

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Iglehart: Traveling out to your Melbourne office, I engaged the taxicab driver in conversation, asking him particularly whether he had private health insurance. He said yes, he did. I asked him why he had paid for private insurance, in addition to his public coverage, and he said that it enabled him, should he need to be admitted to a hospital, to gain quicker admittance and to have a specialist of his choice. Recently (1999), the Australian government launched an aggressive campaign that urged citizens to purchase private insurance; it offered a rebate of 30 percent of the premium in an effort to reverse the declining number of people with private coverage. What has been the impact of this policy initiative? Is there some loss of equity among citizens of different economic circumstances?

Wooldridge: There is a loss of equity if private insurance becomes unaffordable. But a very large number of Australians with average incomes have private health insurance. Some 700,000 Australians with annual incomes of less than $20,000 (U.S.$11,000) purchase private health insurance. So, I don’t think that you lose equity if insurance is affordable and if it’s spread across the community.

People define the purchase of private health insurance in terms of control. If they get ill, they want to have some control over what goes on. They want to be able to choose their specialist, choose where they go and when. I look on it like an airline that has three classes of service—first, business, and economy. They all get a traveler to the same place safely, but the amenities are different. Australia’s very successful universal health care system was predicated on a substantial part of the population having private health coverage.

It parallels our education system. Australia has a strong system of mixed public-private education, against the background of free provision of public education. More than anything, Australians value choice, whether it’s in health care or education. In fact, our public opinion polls have shown overwhelming support for the provision of government subsidies for private insurance; the pollster said that the only thing in his memory that was more popular was the death penalty. Maybe that’s why our political opposition (Labor party) did a complete reversal of its position on private insurance. After mercilessly criticizing our promotion of private insurance, they’ve embraced it lock, stock, and barrel.

Courage In Health Leadership

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Iglehart: What do you regard as your most courageous act as health minister?

Wooldridge: I suppose my most courageous act was taking away a doctor’s automatic right to set up medical practice under Medicare (Australia’s public health insurance program) upon graduation from medical school, as distinct from upon completion of postgraduate training. I say "courage" because I was vilified for that.

Iglehart: What prompted you to take this step?

Wooldridge: Three reasons. The first was a quality issue. Many doctors who graduated from medical school went right into general practice; general practice had become a dumping ground for the medical profession. It was as if we were saying, if you fail in brain surgery; that’s all right, you can go right into general practice and start tomorrow. Allowing doctors to become general practitioners without postgraduate training devalued primary care, and I wanted to upgrade the status of primary care.

Second, I wanted to get some handle, even a crude one, on allocating physician resources across regions. Australia does not have geographic provider numbers, as has been tried in Canada, Germany, and the United Kingdom, and we’re not going to introduce them. But I wanted a way to at least tie non-Australian doctors to their word. I mean, we would have a doctor from overseas say, yes, I promise I’ll go practice in Broome, where they desperately need physicians. Forty-eight hours after getting the issuance of their registration, they’d be practicing in Perth. Australia’s states have the capacity to control that sort of behavior, but they have universally chosen not to use it.

My third reason, I’d come back to the story about the swamp full of crocodiles and the need to put a fence around it. There’s a near-perfect correlation in Australia between the cost of medical services and the number of practicing doctors. I wanted to put a cost containment fence around the swamp. If I didn’t control expenditures for medical services, it would entirely eat up my public health programs. Medical treatment will kill public health because public health has no immediate victim. This is the single biggest message I could give anyone from my experience as health minister. We, as politicians, serve at the pleasure of the public to form a government. government. The public defines performance in terms of medical treatment and identified victims. If treatment is perceived as inadequate, all the political pressure favors gobbling up public health programs.

Aboriginals’ Changing Status

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Iglehart: Within its population of twenty million people, Australia has some 400,000 Aboriginal people who are a source of social and political concern. What is the status of governmental efforts to improve conditions for these Australians?

Wooldridge: Of these 400,000 people, about half are fully integrated into the mainstream of society, and the other half live in the bush or in small villages. The problem is immensely complex. The first is that most Australians don’t know an Aboriginal person. The first indigenous Aboriginal person I met was after I became party spokesman on indigenous affairs. In New Zealand the first indigenous person to graduate from a university did so in the 1890s, became a cabinet minister, was knighted, and died in the 1930s. The first indigenous Australian to become a university graduate did so in the mid-1960s. You can’t look at indigenous history in Australia without recognizing that there was very, very substantial and brutal dispossession going on until the 1970s.

Iglehart: The average American viewing the 2000 Sydney Olympic Games was struck at how prominent a role Aboriginal people played in the opening ceremony. Was Australia sending a message to the world that a new day had arrived?

Wooldridge: I think that’s right. And there was surprisingly little protest during the games over the prominence they were afforded.

Physician Workforce

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Iglehart: In a country as large as Australia, the system must be challenged to train doctors who are willing to practice in remote areas. How does Australia address this challenge?

Wooldridge: Australia has eleven medical schools, and they have been quite responsive in our collective efforts to train more primary care doctors who are responsive to community needs; the schools are changing their curricula to make medical education more socially relevant, and they have been enormously helpful in upgrading rural health care; you saw it yesterday in Broken Hill, where the University of Sydney has established an education program to not only train medical students and provide care but also to train Aboriginal people as nurses, technicians, and allied health workers. The eleven schools prepare about 1,200 medical students every year for practice, once they clear the new postgraduate hurdle. The government fully funds another 100 medical students, who receive generous scholarships. In return, these students are obliged to spend six years after postgraduate training practicing in a rural area of need.

Iglehart: Is the Broken Hill training program unique?

Wooldridge: No, similar programs are operating in each of six Australian states. I persuaded my colleagues in this year’s budget to dramatically expand these efforts. What does this mean? It means that within ten years, 20 percent of the medical training resources of universities located in the capitol cities of our states will be spent in rural Australia. This is the single most exciting development in rural health.

Making A Difference

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Iglehart: You seem to have a very realistic vision about the limits of what a minister can accomplish during his short tenure: that the cycles of change are slow and incremental, that public praise is modest, and thus, that the health portfolio is not exactly what one might choose in terms of advancing one’s political career. How do you deal with these realities?

Wooldridge: I have not ever found any road map to being a minister, which is quite remarkable because it’s an important job. Now I’m talking ministers generally, not just health ministers. One day you sit in political opposition without a cabinet post, and no one considers you particularly important. The next day, when you’re thrust into a position of a cabinet minister before your political party has assumed power, suddenly everyone considers you terribly important. But there’s no training for the position. There’s no way to learn what to expect, and I’ve read very little that would prepare one for life as a minister.

One thing I’ve observed—after seeking out people who previously had been cabinet ministers on all sides of politics—is that if a minister had come into government after a long period of service in the political opposition, he tended to be suspicious of the public sector (government). Government (agencies that administer federal programs) has its own values; it is a different world, with a different language, and with different ways of operating. One of the best things I did was to place on my personal staff a former senior civil servant as my chief policy adviser—Barbara Hayes, whom you’ve met. It was like turning up on a desert island, full of hostile natives, and finding someone who spoke my language.

Iglehart: You’ve been health minister for almost five years. You must have aspirations that reach beyond this post, perhaps another Cabinet post or other political responsibilities. What are your ambitions?

Wooldridge: That’s a hard question to answer because I have tried to keep my aspirations modest. I do have one trait for which I thank my dad; he taught me never to fear failure, so I judge my successes not so much in terms of outcomes but, rather, my personal effort. If you’ve done your best, the outcome almost becomes a byproduct. I’m forty-three, have two young kids and a wife who believes in public service; this is a joint project. I take each term in Parliament as it comes. Everyone in politics aspires to rise as high as he or she can, but I’m sure there is life after politics. What I have learned in thirteen years of public life is that there is a point to trying to make a difference in the world. I may be battered and bruised, but I still actually believe that an individual can make a difference.

Editor's Notes

 
Michael Wooldridge was appointed to Australia’s cabinet as minister for health and aged care in March 1996. He is also a member of the Cabinet Expenditure Review Committee. Wooldridge entered Parliament as the member for Chisholm in 1987. Prior to entering politics he worked as a trainee in surgery at Melbourne’s Alfred Hospital and practiced locally as a general practitioner.

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