By Kim Powell in Sydney

Australia’s healthcare system is a product of a “bygone era” and in order to meet the challenges of an ageing population, a more integrated and flexible approach to prevention and care needs to be adopted, Professor Hal Swerissen, the acting dean of La Trobe University’s Faculty of Health Sciences, told delegates at the Developing Australia’s Regions conference in Sydney in July.

“The sorts of things that were killing people one hundred or so years ago were infectious diseases, like tuberculous,” he said.

“Now the sorts of things that kill people are heart disease and cancer. Two thirds of us will die of heart disease and cancer. So we need a different sort of health system than we had 100 years ago.”

Accordingly, governments and healthcare professionals need to be thinking about what challenges the ageing population will create, according to Professor Swerissen.

“By 2025, there’s going to be a 100 per cent increase in the number of people over the age of 75,” he said.

“There are 1.2 million people over the age of 75 at the moment, and that will go up to about 2.5 million people as the baby boomers make their way through the system.

“The other part of that is many of the people working in the health workforce will retire in that period so we’re going to have very significant pressures on the healthcare system. As a result of that we’ll need a doubling of total expenditure on aged care services across the country and we’ll probably need a fifty per cent increase in health services.”

In order to address this and the other problem of attracting and retaining healthcare staff in the bush, Professor Swerissen recommends that Australia abandon the current funding model that is based on outputs and services, and instead focus on flexible funding.

One approach is to start thinking about non-metropolitan areas in terms of catchments and populations, and integrating them to provide a service delivery system that can respond to the needs of rural communities. He said a good place to start was in areas of workforce shortage, where it was difficult to attract healthcare workers.

“We need to start thinking about these areas as somebody needs to be responsible for them – similar to what New Zealand has been doing for the last ten or fifteen years now – starting to think about local governance arrangements, about who is going to be responsible for the health of these people because currently in rural communities, nobody is. Nobody.”

By allowing small rural health services to move money across program lines as it was needed, competitive salaries could be offered to attract staff and more funding spent on prevention.

“You could also use the workforce more flexibly, because you wouldn’t be limited to funding for specific item numbers or procedures,” Professor Swerissen said.

“You could have contract variations depending on the needs of catchments. The consumer part of the equation can remain roughly the same, it’s just that the purchasing arrangements by governments change so you achieve a much more flexible set of arrangements. As the demand for services increases, more and more of those healthcare staff are going to be pinched into metropolitan cities so you need to create competitive advantage and one way of doing that is changing the funding model.”

Professor Swerissen called for an integrated system that flows across community, hospital and aged care boundaries, particularly in rural areas where aged care facilities currently are not feasible.

“At the moment one of the things that happens is you can get stuck in a hospital because there’s no aged care place for you,” he said.

“There are viability issues in small rural communities because basically to run an aged care facility you have to have about 35 to 40 beds to make it viable.

But in many small rural communities it’s not possible to do that and one way of doing that is blending the hospital system and the aged care system and allowing flexible funding for the person depending on what their state of health needs are rather than which bed they happen to be in.”

Professor Swerissen has been working with the Victorian Government on ways small rural health services might develop over the next decade, and some very remote areas have adopted this integrated approach for funding arrangements for indigenous healthcare.

“Doing something like this is probably a good trial for the broader healthcare system if we can start dealing with areas where we’re clearly not solving the problems, [and] where we’ve got workforce problems,” he said.

“It’s probably a relatively modest investment across the board for government because only ten per cent of the population lives in those outer regional areas and not all of [them] are areas of workforce disadvantage for healthcare. So it’s a good place to start where there are some obvious advantages to moving forward.”