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Whose money is it anyway?

 

Several articles passed through my in-box this week. Both of them reminded me of daily life as a nurse. Both raise the issues of billions of health dollars wasted every year while powerful health unions fight health reform.

First. A story from America about expensive drugs being routinely thrown away. Why is this money being wasted? Because chemotherapy drugs come in excessively large packages and once opened, can’t be reused.  The result is that nurses routinely discarded unused cancer due to over priced packaging. These same drugs are NOT being wasted in Europe. Why? Because the Europeans refuse to allow drug companies to sell them excessive amounts of drugs packed in single use containers. Their health system is public. This gives the Europeans the power to demand that drug companies use a more cost effective packaging system. The result is that a cancer drug in America costs far more than the same drug in Europe. Less drug is wasted, the health dollar is money is spent more wisely. The pharmacy industry ends up with lower profits. The health budget has less waste.

When I worked as a nurse, the majority of intravenous morphine was routinely thrown away.  The issue was the impractical packaging. Morphine commonly came as 10mg in 1 mils of solution. Patients use 2 to 3 mgs on average. The rest of the drug was routinely discarded. A great performance was made about a ‘second nurse watching the disposal of the morphine into the sharps bin’. No one showed any interest in the millions of dollars wasted in tax payers money. I would estimate that the majority of morphine supplied to Australian hospitals is thrown away, due to impracticable packaging. The producer gets to sell more than the supplier actually needs. More profits for drug companies. More money wasted for the tax payers.

Secondly a story about unnecessary and high fees being paid to private doctors and private pathology companies. This relates to work that modern technology has made routine and cheap to deliver. Why is money being wasted? Because every time the Australian health department tries to modernize the Medicare fee structure, both private doctors and pathology companies cry ‘doomsday’ and run to the media with stories of blind patients dying from cancer metastasis that could have been picked up early. Once again, countries with large public systems and a history of good bookkeeping pay far less for the same health services. Their taxpayers get good health services, modern IT and an effective payment system.

Australian GP’s have pointed out that they operate in a highly competitive and low-cost market, performing the majority of health services while sticking to bulk billed fees that have not changed since 2013. By contrast, private medical specialists can charge 4 to 6 times the public fee for the same services, keep both their fees and their error rates secret from the public, avoid any competition to drop prices and raise standards and work in plush hospitals that are subsidized by taxpayers rebates for private health insurance.

Privatized healthcare means less power to negotiate down prices with powerful health unions and multinational companies. This can lead to higher prices and lower standards for patients.

Australia’s private health sector is expanding. Currently, 1/3 of hospital beds are private in Australia. Australians and Americans waste billions on  over servicing, over pricing and preventable errors.

It’s time to take a leaf out of the European British and New Zealand health funding book.

 

References

  • Money estimated to be wasted by over servicing in Australia 33% 33%
  • Australians pay more for generic drugs than the UK 40% 40%