Health care reform and structural interests: Casemix as a tool for reform in the Australian health industry

This thesis uses a policy research framework to examine the development, implementation and evaluation of the casemix-based health care reform policies that were embedded within the 1988 and 1993 Medicare Agreements between the Commonwealth Department of Health and states and territories of Australia. Alford's (1975) conceptual framework of structural interests is used to examine the power of strategically placed interests in health care, and the barriers and challenges those interests pose to reform of the hospital system in particular. Alford (1975:14) argued that health systems must be understood in terms of the continuing struggle between the dominant structural interests (mainly doctors) and the challenging structural interests (government bureaucrats, health administrators, health planners and academic researchers) who try to reform the health system. Casemix-based hospital management information and funding systems provide tools for understanding hospital activity and costs and in doing so, provide incentives for improving efficiency and reforming clinical practice. The aims of the study were to gain a better understanding of the processes used in developing the reform policies; to explain in an analytical way, who influenced what was decided in relation to policy development and implementation; to examine the impact of the implementation of casemix-based funding policies in two Australian states from the points of view of the structural interests in health care; and to summarise the implications for future health care reform policy development m Australia. The data collection methods used for this study include depth interviews with fifteen casemix 'elites', a focused synthesis of important documents related to casemix policy, and secondary analysis of hospital activity data to evaluate the impact of casemix-based funding in the States of Victoria and South Australia. The findings clearly demonstrate that the inclusion of the casemix-based reform policies into the 1988 Medicare Agreements was a deliberate approach by the challenging structural interests to signal a new era of reform and accountability for the Australian public hospital system. The use of the Casemix Development Program as a policy instrument was seen by the stakeholders to have a positive impact in terms getting commitment to policy direction and for developing expertise in casemix-based systems, but it was criticised for a lack of research priorities and the subsequent waste of funds. Casemix-based funding systems were seen by the stakeholders to have both positive and negative aspects. Both the challenging and dominant structural interests agreed that there was an improvement in management information and financial systems, giving them better information for budget allocation and resource management. This resulted in improved hospital access and efficiency, as measured by patient throughput, length of stay and average cost per casemix-adjusted separation. The dominant structural interests found that with better information and more accountability for resource use there was an improved focus on team work and patient management. Despite these improvements, there was a belief among the dominant structural interests that quality of care had deteriorated under casemix-based funding. Negative aspects of casemix-based funding systems were seen to include a focus on technical efficiency at the expense of allocative efficiency and an emphasis on acute hospital services and throughput without consideration of the resources required for other services; particularly community services which had to deal with early discharges. Stakeholders also felt that there was increased pressure on bedside clinical staff with the increases in patient throughput and acuity, and that these pressures threatened the ability of so called teaching hospitals to adequately train health professionals and to conduct research. While the casemix-based reform policies resulted in a coalition of the challenging and dominant structural interests to improve health care delivery in Australia, there is no evidence to suggest that there has been any real change in the social, economic and political structures which reinforce medical dominance in health care in Australia. Recommendations for future policy research and policy learning are made with a view to improving the nature of health care reform policy and its impact on the health of the Australian population