Health Costs in Australia, NZ, Hong Kong and Japan

Government officials in Australia, New Zealand, Hong Kong and Japan feel their efforts so far to contain health care costs have failed, apart from global budgets with expenditure caps, says Cost Containment, Quality and Change, a new Financial Times Management Report study.

Quality of care in the four countries is fair at best, and suffers from financial constraints imposed by cost containment, says author Eleanor Feldbaum. Queues for services and surgery have created a two-tier system, with people who can afford private insurance and services opting out of the public system. Mechanisms are being developed to assess quality, but the extent to which they are used will depend on willingness to invest. Consumer rights and protection from non-harmful health care are not hallmarks of any of the systems. Doctors, who have been given authority to assess care quality and to discipline those who are negligent, and to whom patients have given their trust, have not fulfilled this obligation in any of the countries. All four nations will begin to exploit information technology to try to measure medical appropriateness and outcomes, and infrastructure investments may become more generous when governments realize that increasing health care quality may be the most effective way to contain costs.

The four health systems are remarkably similar, says the study. All promise comprehensive care provision and are concerned about escalating costs. They are interested in quality, but measurement mechanisms are not in place. They have begun to look at outcomes and effectiveness, but cost concerns have hit quality of care. Attempts to use management strategies to cut demand are relatively new and limited; only New Zealand requires general practitioners to act as gatekeepers to refer patients to specialists and hospitals, while Japan has added an incentive fee to the doctor payment schedule for referrals, and Australia rebates at a substantially lower level for unreferred specialist visits and services. These three also have mechanisms for retrospective utilization review of doctors' and hospital practices. New Zealand plans to institute managed care in contracts with health care providers, while Australia has given private insurers authority to manage patient care. In Japan, utilization review has not been successful, and it is doubtful if primary care doctors will be successful gatekeepers, as patients can select any GP or specialist they wish.