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Computer Graphics	Medicare - Large and Small Issues in Perspective Despite the generally favourable performance of the health sector, a perception has been created that there is a deep seated malaise in Medicare. While there are undoubted problems - some discussed below - a disappointing feature of the popular debate is the extent to which it has been directed by particular interests and ideologies into issues that, in the long run, probably have limited or unknown significance for costs or health benefits. Without attempting a full justification for their inclusion, some of these issues are listed below. Privatisation to increase efficiency There is no compelling evidence that private hospitals in Australia or elsewhere outperform government run institutions. (This contrasts with such comparisons in other sectors.) The evidence strongly indicates that nationalised and monopolised insurance is administratively cheaper than private insurance as the functions carried out are drastically simplified. Private interests and ideology clearly drive this debate. Co-payments to control `costs' On the best evidence, changes in co-payments cannot explain a significant part of the rising US costs and US co-payments have fallen significantly over time. In Australia they have not. The real issue here is doctor control over medical incomes and attempts by the Department of Finance to shift costs away from government. Fee for service payments and medical expenditures Despite a priori reasons why fee for service payments may increase medical expenditures, there are also reasons and evidence that they may do the opposite. The issue is unresolved and the debate primarily driven by ideology. Private health insurance to fund expenditures that governments cannot afford. The view that governments cannot afford health spending is a political and not an economic judgment. Taxes and the Medicare levy could, in principle, be raised to virtually any level. Again the assertion is promoted by private sector self interest and ideology. Private health insurance as a technique for forcing the wealthy to pay an equitable share This self evidently wrong argument is promoted for the same reasons as the previous argument. Both taxes and the Medicare levy are income related. If the only concern was equity then the progressivity of both of these sources could be increased. Despite this, Medicare does have a serious inequity. Those wishing eligibility for private hospitalisation must pay twice. But presumably, for historical and political reasons, the case for an `opt out' provision in Medicare for those seeking private cover is seldom argued. The source of finance Generally, issues associated with public out-of-pocket and visible expenditures receive high profile. In particular, changes or proposed changes in the Medicare levy or private health fund premiums are given considerable prominence. Interesting work by Butler and Smith recently demonstrated that, despite the appearance of radical shifts in the funding of health services, there has been remarkable stability in the overall source of funding. In 1961, government direct expenditure or tax expenditures accounted for 62% of total health revenue. By 1987 this had risen to 71%. Medibank and Medicare resulted in an overall increase in the public share of expenditure of only 6 and 8 percentage points respectively. By contrast with these hotly debated issues, the quantitatively significant determinants of cost and benefits have received comparatively little attention. This is probably attributable to the technical nature of many of the issues; the fact that they are not, generally, the subject of simple ideological opinion and the lack of powerful interest groups promoting a particular point of view. An incomplete list of such issues would include the following. The cause of rising expenditures While the ratio of health spending to GDP has been stable since 1976, real resource expenditures have risen significantly. The reason for this in Australia and in other countries is poorly understood. Value for money: which services are cost effective or even efficacious In the Dutch inquiry into the reform of its health system, it was estimated that only 25% of current practice had been evaluated even for clinical efficacy. Economic evaluation is even less common. Best practice protocols Five-to-ten fold variation in the rates at which procedures are delivered between countries, states and small areas suggests that, relative to a hypothetical best practice, some populations are either seriously over or under treated. Best use of the work force Australia's delivery patterns have been highly conservative. Integration via community health centres was largely stillborn because of opposition from the medical profession. Highly skilled GPs and pharmacists are under-utilised and the optimal use of physician assistants does not appear to be on the agenda. Case payment This has, appropriately, been a major issue amongst professional health service researchers. Hospital efficiency The role of alternative payment mechanisms - purchaser-provider and managed competition has received little public discussion. Access for selected population sub groups Geographic isolation and cultural barriers reduce equity as documented in the National Health Strategy.