The purpose of a health system is to keep the population healthy. Accordingly the financing, reporting, and management should be aligned to this aim. Our "illness industry" (it is focussed on curing illness rather than health and could hardly be called a system) and particularly in primary care has the incentives almost directly opposite to what we as citizens want a system to achieve.

Estimates of the extent of illness that is preventable vary significantly but are at least 30%. Imagine the savings out of our current health budget if we achieved this. Then add to it the improvement in the general economy as workers took fewer sick days.

To achieve this we could:
1. Pay general practitioners when their patients are well (not when they are sick as at the moment)
2. Give bonuses to general practitioners who get their patients to live healthy lifestyles (as reported by Mike Moore in "Sicko")
3. Remove the barriers to nurses and allied health practitioners working from within general practices or wellness centres earning income from the MBS so that they could engage in preventative care.
4. Give GPs the funding to buy pharmaceuticals (and pathology and radiology services) for their patients with any savings going to the practitioner
5. Remove siloed funding so that practices could make tradeoffs between different modes of care - so that they could encourage patients to take physical activity rather than prescribing antidepressants.

This would require some structural changes such as patient registration with a practice, and monitoring against underservicing (just as we currently monitor against overservicing).

Measures such as these would encourage the truly multidisciplinary care that is needed to combat the huge growth in chronic disease and tackle the tsunami of obesity that will challenge our economy as chronic disease takes over. There is arguably enough money being applied to health care but it is poorly targeted and doesn't achieve what we want in keeping us healthy.

Most of all we need political and bureaucratic courage and leadership to move away from a system that is dominated by professional interests.

johnw, in this area and many others, there are good ideas put forward that have no real prospect of achievement. the fundamental problem is not medical, it is the total sequestration of power in parliament. if we had cir and direct election, democracy for short, the citizens could compel pollies to deliver service. but we don't, and we can't.

btw, the best reorganization of medical service would be to key in the age of the patient: kids get whatever they need, oldies are progressively less eligible for expensive treatment. why put a 10,000$ hip in some one that's going to die soon?

"why put a 10,000$ hip in some one that's going to die soon?"

Demos, I'm sure you won't feel that way if you should have the good fortune to reach old age and snap your neck of femur.
Maybe you're one of those who believe older people have nothing further to contribute to their country, but even so, hip replacements are a poor subject to use for your argument against keeping older people alive. I work in the health system and have seen remarkable results when an aged person receives an artificial hip joint after having experienced years of intolerable pain.

You may believe (wrongly from my personal perspective) that you should simply let old people die to free up money for other age groups, but I could then say......what about young people who smoke, who binge drink, who drive in a sociably unacceptable manner, who eat to excess without exercise and go on to develop Diabetes Type 2? Do we not bother to treat the cancers, provide care for those who are alcohol damaged, not treat the shocking injuries in young drivers who have made a terrible mistake, or provide treatment to those who, through lifestyle choices develop diabetes?

While it's true that not nearly enough is being done to prevent disease, we cannot simply switch funding from care to prevention. Besides, how are you going to stop people from smoking, binging or speeding in their cars? Fines and legislation haven't been effective and those problems are only the tip of the iceberg compared to drugs.

We now live in a society where people's 'perceived' rights overrule constraint and harmony. Just watch it get worse, much worse, as corporate corruption and population explosion continue to destroy what's left of the Western lifestyle.

Thank you Ian for putting some issues very clearly, and thank you previous contributors for also adding constructively to the debate.

May I suggest Ian that your policy formulations seem to ignore one fundamental, and crucial, aspect.

In the best of all possible worlds all people would strive for the public good without consideration of their personal advantage or gain - that is Utopian socialism. I am a failed Utopian Socialist because it just doesn't work. The reality, and post-Eden fact of life, is that we humans need monetary incentives to strive for excellence and work our guts out. We simply have to acknowledge that the bestest medical system will have to provide incentives to health workers that go beyond the great feeling of having contributed to the public good. Hence, the need for some optimal combination of socialistic medicine and fee for service.

"we have free public hospitals,"

WRONG, every person who pays taxes contributes to our 'free public hospitals.'

Secondly even now a system of co-payments exists, sometimes indirectly. There is a trend that hospitals are now beginning to charge car parking fees, when previously is was free to park your car.

Thirdly, patients with numerous co-morbities are being kept alive much longer.

"Indeed, competition between private and public service providers can be quite healthy."

WRONG, in some states it is impossible to be treated by a urologist within the public system, because they have a monopoly on services. So if you for example prostate cancer and are a public patient, unless you fork out for private treatment, your outcome will not be as good as a private patient.

Radiological services are another one where the radiologists is employed in the public system and also runs a private radiological service. Guess where the radiologist spends most of their time?

Australia has a population of 21 million people. There is no reason why 1 health insurance scheme can't cover the whole population efficiently. A country the size of the United States with 350 million people may suffer diseconomies of scale trying to have one scheme for all its population, and until recently had to run multiple databases for that number of people.

At the moment Australia has about 100 competing health funds, operating under Department of Health regulations that restrict the largest funds from under cutting their premiums to run the small inefficient funds out of business.

The Australian health Insurance system is very profitable, the large establish mutuals like Hospital Benefits Association, and HCF have been bought out by overseas corporations like AXA. This is where the Australian tax payer bleeds $1 billion into the profits of the health insurance industry.

DEMOS has raised the vexed issue of whether there should be limits placed on the treatments offered to patients with poor prognosis. I think that individual doctors make these "life and death" or "quality of life" decisions on a daily basis at the moment. Does DEMOS want a more transparent and auditable method of deciding what treatments patients will be offered.

I believe that all Australians health care has been immeasurably improved by the introduction of the universal health care irrespective of individual patients ability to pay. Doctors can now offer treatments confident that they will be paid, and they have more experience in treating particular conditions because they have more patients to practice on.