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Economics and Indigenous Australian Health Workshop A Community Report from VicHealth Koori Health Unit Published by: Onemda VicHealth Koori Health Unit (formerly VicHealth Koori Health Research and Community Development Unit) Centre for Health and Society, School of Population Health, The University of Melbourne

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  • Economics and IndigenousAustralian Health Workshop

    A Community Report fromVicHealth Koori

    Health Unit

    Published by: Onemda VicHealth Koori Health Unit(formerly VicHealth Koori Health Research and Community Development Unit)Centre for Health and Society, School of Population Health, The University of Melbourne

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  • © VicHealth Koori Health Unit 2005

    ISBN 0 7340 3085 1

    First published in June 2005 by the Onemda VicHealth Koori Health Unit (formerlyVicHealth Koori Health Research and Community Development Unit).

    This work is copyright. It may be reproduced in whole or in part for study or trainingpurposes, or by Aboriginal and Torres Strait Islander community organisations subject to an acknowledgment of the source and no commercial use or sale. Reproduction forother purposes or by other organisations requires the written permission of the copyright holder(s).

    This report is available gratis. Additional copies of this publication can be obtained from:Onemda VicHealth Koori Health Unit, Centre for Health and Society, Level 4/207 BouverieStreet, University of Melbourne, Vic. 3010.Tel: 61+3 8344 0813 Fax: 61+3 8344 0824 E: [email protected]

    Editor: Michael OtimProduction Editor: Jane Yule Copy Editor: Cathy EdmondsOriginal Artwork: Michelle Smith & Kevin MurrayDesigned and Printed by the University of Melbourne Design & Print Centre

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  • iiiA Community Report from VicHealth Koori Health Unit

    CONTENTS

    FOREWORD 1

    INTRODUCTION 3

    ATTENDEES AT THE WORKSHOPS 4

    COMMUNITY WORKSHOP, 26 NOVEMBER 2001

    HEALTH ECONOMICS WORKSHOP, 29–30 NOVEMBER 2001

    GLOSSARY 7

    BACKGROUND 8

    SECTION A: COMMUNITY WORKSHOP 9

    WORKSHOP DISCUSSION AND ISSUES 10

    SECTION B: HEALTH ECONOMICS WORKSHOP 11

    HEALTH ECONOMICS WORKSHOP AGENDA 12

    SESSION 1. INDIGENOUS HEALTH POLICY: CURRENT ISSUES AND 13

    DIRECTIONS

    SESSION 2. FUNDING AND EXPENDITURE 17

    SESSION 3. PRIORITY SETTING AND RESOURCE ALLOCATION 19

    DINNER SPEECH 22

    SESSION 4. BUILDING A POLICY-RELEVANT RESEARCH AGENDA 23

    SESSION 5. MAPPING A RESEARCH AGENDA 1 26

    SESSION 6. MAPPING A RESEARCH AGENDA 2: WHAT ARE THE PRIORITIES? 28

    SESSION 7. DEVELOPING THE CAPACITY FOR RESEARCH ININDIGENOUS HEALTH ECONOMICS 29

    RECOMMENDATIONS FOR RESEARCH 30

    WORKSHOP EVALUATION 30

    REFERENCES 31

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  • 1A Community Report from VicHealth Koori Health Unit

    FOREWORDOver the past thirty years Aboriginal health advocates have worked hard to focusgovernments on the health needs of Aboriginal and Torres Strait Islander people. One ofthe key challenges has been reforming the Australian health system so that the resourcesavailable for health match the need in our communities. One of the consequences of thedevelopment of Aboriginal community controlled health services, and other Indigenousspecific programs, is that there is now a considerable body of, and expertise in, the typesof services that can make a difference. There has also been good progress in gettinggovernments and other stakeholders in the health system to agree to some keypriorities—such as the development of primary health care. Debate has been vigorousand, at times, heated. Today, one of the key challenges is to link the reform of healthfinancing with the development of services that have been shown to improve Indigenoushealth outcomes. However, if we are to take the next step, we need to take a closer lookat the economy of Aboriginal health.

    Comprehensive primary health care has been identified as a key strategy in Aboriginaland Torres Strait Islander health. This is linked to strategies that are implementedthrough other sectors, such as housing, education or employment. The development ofcapacity in primary health care is a critical component of a broader health system reformstrategy, as it is within this part of the health system that the links between primaryclinical care, health promotion/population health strategies and communitydevelopment is made. These links are important for achieving health gain. Within thiscontext Aboriginal community controlled health services play a critical role, as domainstream health and community services. However, if this system of care is going tobe effective we need to have a closer look at how it is financed. This means that weneed to have a better understanding of how priorities are set in the allocation of healthdollars, and to investigate the economic issues that impact upon the provision ofeffective and efficient services.

    Aboriginal communities, through the advocacy of peak bodies such as the NationalAboriginal Community Controlled Health Organisation (NACCHO) and its State affiliates,have advocated for the reform of health financing for nearly a decade. One of thereasons that NACCHO and others lobbied for the health portfolio to take responsibilityfor the Commonwealth’s Aboriginal health program was to get more leverage on theAustralian health financing system. It is important that the reform of the financing ofhealth care is linked to the development of services that we know will affect Aboriginalhealth outcomes. For this reason, Commonwealth and State/Territory governments andthe Aboriginal community sector have become partners in the implementation ofprograms such as the Commonwealth Primary Health Care Access Program—an initiativeaimed at improving Aboriginal access to primary care services. Economic analysis has arole to play in the evaluation of initiatives such as this one.

    Over the years, one thing that we have learnt in advocacy is that evidence can be aneffective tool—both in getting the attention of policy makers and politicians, and in theshaping an effective reform agenda. Our mob has traditionally been suspicious of theresearch process. But in the right hands, or through the right partnerships, it is possible todevelop a research agenda that is focused on addressing those gaps in knowledge thatare critical to reforming policy and practice. Health economics can also make acontribution to developing a policy-relevant research agenda in Aboriginal health. Thiswill require an ongoing conversation between researchers, Aboriginal people and policymakers. It is, however, fundamental to our broader agenda in Aboriginal health that wehave this conversation. This report is one contribution to that end.

    Professor Ian Anderson, Director

    VicHealth Koori Health Unit

    Centre for Health and Society, School of Population Health

    The University of Melbourne

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  • 2

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  • 3A Community Report from VicHealth Koori Health Unit

    INTRODUCTIONTwo workshops took place within one week, the first on Monday, 26 November 2001 andthe second on 29–30 November 2001. The first, a Community Workshop that lasted abouttwo hours, was a consultative meeting with Koori community members in preparationfor the second one (Health Economics Workshop). The Health Economics Workshop tookplace over two consecutive days, and discussions involved economics and the health ofIndigenous Australians. Both workshops were well attended and had positive feedbackfrom the participants.

    This community report is broadly divided into two sections: Section A is a summary of theCommunity Workshop, while Section B contains summaries of the papers that werepresented at the Health Economics Workshop. These summaries are grouped in thefollowing themes:

    ✓ Indigenous health policy: current issues and directions.

    ✓ Funding and expenditure.

    ✓ Priority setting and resource allocation.

    ✓ Building a policy-relevant research agenda.

    ✓ Mapping research agenda and developing the capacity for research in Indigenoushealth economics.

    Aims of the workshops

    The aim of the Community Workshop was to solicit the views of the community on theissues they consider critical and of priority in Aboriginal health. These views were to bepresented in the second workshop for discussion to help the participants when designingresearch agenda for health economics. This workshop was internally organised by theVicHealth Koori Health Research and Community Development Unit (now OnemdaVicHealth Koori Health Unit), hereafter referred to as the Koori Health Unit.

    The aim of the Health Economics Workshop was to develop a policy-relevant researchagenda in Indigenous health economics. The workshop was organised in conjunctionwith the Centre for Aboriginal Economic Policy Research (CAEPR) at the AustralianNational University (ANU) and funded by the Office for Aboriginal and Torres StraitIslander Health Services (OATSIHS). It took place in the Graduate Centre, MelbourneUniversity, and more than fifty participants attended from all over Australia. Participantscame from the Indigenous community, academia and the bureaucracy such as:

    • National Aboriginal Community Controlled Health Organisation (NACCHO), AboriginalMedical Services Alliance Northern Territory (AMSANT), Aboriginal Congress,Kimberley Aboriginal Medical Services Council (KAMSC), and Redfern AboriginalMedical Service (AMS).

    • Aboriginal Affairs Victoria, Department of Human Services (DHS), OATSIHS offices inCanberra and Victoria, Commonwealth Department of Treasury (DoT), CommonwealthGrants Commission (CGC), and Australian Bureau of Statistics (ABS). Others were fromQueensland Health (QH) and WA Health.

    • Menzies School of Health Research, Cooperative Research Centre for Aboriginal andTropical Health (CRCATH), Social and Public Health Economics Research Group(SPHERe) at Curtin University, and Centre for Health Program Evaluation (CHPE) atMonash University.

    The following topics were discussed in the Health Economics Workshop: Indigenoushealth policy—current issues and directions; funding and expenditure; priority settingand resource allocation; and developing the capacity for research in Indigenous healtheconomics. The Koori Health Unit is publishing the original papers as a monograph titledEconomics and Indigenous Australian Health. If you would like a copy of this monograph,please contact Nicole Waddell on Tel. (03) 8344 0813 or e-mail: [email protected]

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  • 4 A Community Report from VicHealth Koori Health Unit

    Community Workshop, 26 November 2001

    Dr Sarah BergDepartment of Human Services (DHS), Melbourne

    Mr John Austin ABS, Melbourne

    Ms Anne GarrowVictorian Aboriginal Health Service (VAHS),Melbourne

    Ms Anke van der SterrenVAHS, Melbourne

    Mr Rick Henderson VAHS, Melbourne

    Mr Ted Chessells VAHS, Melbourne

    Dr Dick Sloman VAHS, Melbourne

    Ms Jan MuirDepartment of Rural Health, Shepparton

    Mr Graham AtkinsonYuruga Enterprises Pty Ltd, Melbourne

    Professor Ian AndersonVicHealth Koori Health Research & CommunityDevelopment Unit (VKHRCDU), Melbourne

    Ms Nicole Waddell VKHRCDU, Melbourne

    Ms Angela Clarke VKHRCDU, Melbourne

    Dr Nili Kaplan VKHRCDU, Melbourne

    Ms Asmira Korajkic VKHRCDU, Melbourne

    Dr Priscilla Pyett VKHRCDU, Melbourne

    Dr Kim Humphery VKHRCDU, Melbourne

    Mr Michael Otim VKHRCDU, Melbourne

    Health Economics Workshop, 29–30 November 2001

    INVITED GUESTS AND SPEAKERS

    Ms Donna Ah CheeDeputy Director, Aboriginal Congress, Alice Springs

    Dr Katrina AlfordDepartment of Public Health, The University of Melbourne

    Professor Jon Altman Director, CAEPR, ANU

    Ms Pat Anderson Chairperson, NACCHO and Chief ExecutiveOfficer (CEO), Danila Dilba Health Service,Darwin

    Professor Tony Barnes Director, CRCATH, Darwin

    ATTENDEES AT THE WORKSHOPS

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  • 5A Community Report from VicHealth Koori Health Unit

    Ms Carol Beaver Director, Health Economics Unit, TerritoryHealth Services (THS), Darwin

    Dr John Boffa Aboriginal Congress, Alice Springs

    Mr Graham Brice NACCHO, Canberra

    Mr Paul Briggs Victoria Community

    Ms Maria Jolly Health Strategies Division, Department ofHealth and Aged Care (DHAC), Canberra

    A/Professor Rob Carter Deputy Director, Program Evaluation Unit, The University of Melbourne

    Ms Joan Cunningham Menzies School of Health Research, Darwin

    A/Professor Peter d’AbbsTropical Public Health, Queensland Health

    Dr John Deeble National Centre for Epidemiology andPopulation Health (NCEPH), ANU

    Dr Jeannie Devitt CRCATH, Darwin

    Professor Stephen Duckett, Dean, Faculty of Health Sciences, La Trobe University

    Ms Helen Evans First Assistant Secretary, OATSIHS, DHAC,Canberra

    Ms Trish Fagan Medical Advisor, DHAC, Canberra

    Ms Mandy Fitzpatrick DoT, Canberra

    Mr John Goss Australian Institute of Health and Welfare(AIHW), Canberra

    Dr Mathew Gray Australian Institute of Family Studies,Melbourne

    Mr Robert Griew Population Health Division DHAC, Canberra

    Mr Ian Hamm OATSIHS, Melbourne

    Dr Boyd Hunter CAEPR, ANU, Canberra.

    Mr James Jordan Portfolio Strategies Division, DHAC, Canberra

    Mr Dale Keehne OATSIHS, DHAC, Canberra

    Ms Helen Kehoe NACCHO, Canberra

    Ms Allison Killen OATSIHS, DHAC, Canberra

    Ms Marian Kroon OATSIHS, DHAC, Canberra

    Mr Christopher Lawrence Redfern AMS, Sydney

    Dr Jenny Lewis Centre for the Study of Health and Society (CSHS), University of Melbourne

    Dr Robyn McDermott Tropical Public Health, Queensland Health

    Ms Mary McDonald OATSIHS, DHAC, Canberra

    Dr Louise MorautaDeputy Secretary, OATSIHS, DHAC, Canberra

    Dr Richard Murray Director, KAMSC

    Mr Malcolm Nicholas Assistant Secretary, Revenue, Budgets andIT, CGC, Canberra

    Mr John Pilla KPMG, Adelaide

    Professor Jeff Richardson Director, Health Economics Unit, CHPE,Monash University

    Mr Craig Ritchie CEO, NACCHO, Canberra

    Ms Joy Savage Acting Director, Sexual Health andImmunisation Section, OATSIHS, Canberra

    Dr Leonie Segal Deputy Director, Health Economics Unit,CHPE, Monash University

    Ms Bev Sibthorpe NCEPH, ANU, Canberra

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  • 6 A Community Report from VicHealth Koori Health Unit

    Ms Julienne Stephens Aboriginal Affairs, DHS, Melbourne

    Dr John Taylor CAEPR, ANU, Canberra

    Dr Rhema Vaithianathan Department of Economics Research, ANU, Canberra

    Mr Simon Zheng Australian Bureau of Statistics, Melbourne

    FROM THE VICHEALTH KOORI HEALTHRESEARCH & COMMUNITYDEVELOPMENT UNIT

    Professor Ian Anderson

    Ms Angela Clarke

    Ms Nicole Waddell

    Ms Asmira Korajkic

    Dr Kim Humphery

    Dr Priscilla Pyett

    Mr Ian Scott

    Mr Michael Otim

    APOLOGIES

    Ms Terry Dumbar Business Manager, CRC, Darwin

    Ms Salina BernardVictorian Aboriginal Community ControlledHealth Organisation (VACCHO), Melbourne

    Mr Jason EadesAboriginal Affairs Vic

    Mr Shane HoustonWA Health, Perth

    Mr William Smiley JohnstonATSIC, Canberra

    Ms Lyn McGuinessVACCHO, Melbourne

    Dr Phillip MillsTropical Public Health

    Professor Gavin Mooney Curtin University, Perth

    Mr Yin ParadiesCRCATH, Darwin

    Mr Enrico SondaliniFunding & Systems Policy, NSW Health, Sydney

    Mr Jim PearceFunding & Systems Policy, NSW Health, Sydney

    Dr John WakermanCentre for Remote Health, Alice Springs

    Mr Ted WilkesDerbarl Yerrigan AMS, WA.

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  • 7

    GLOSSARYABS Australian Bureau of Statistics AIHW Australian Institute of Health and Welfare AMS Aboriginal Medical Service, RedfernAMSANT Aboriginal Medical Services Alliance Northern Territory ANU Australian National UniversityATSIC Aboriginal and Torres Strait Islander CommissionCAEPR Centre for Aboriginal Economic Policy Research, ANU CCT Coordinated Care TrialsCD Chronic Disease CHPE Centre for Health Program Evaluation, Monash UniversityCGC Commonwealth Grants Commission COAG Council of Australian GovernmentsCRCATH Cooperative Research Centre for Aboriginal and

    Tropical HealthCSHS Centre for the Study of Health and Society,

    University of MelbourneDHAC Department of Health and Aged CareDHS Department of Human Services, MelbourneDoT Department of Treasury, CanberraGPs General PractitionersHBG Health Benefit GroupKAMSC Kimberley Aboriginal Medical Services CouncilKWCCT Katherine West Coordinated Care TrialMBS Medicare Benefits SchemeNACCHO National Aboriginal Community Controlled Health OrganisationNCEPH National Centre for Epidemiology and Population Health, ANU NHS National Health Survey, ABSNT Northern Territory OATSIHS Office for Aboriginal and Torres Strait Islander Health ServicesPBS Pharmaceutical Benefits SchemePHC Primary Health Care PHCAP Primary Health Care Access ProgramPIRS Patient Information and Recall SystemsQH Queensland HealthSPHERe Social and Public Health Economics Research Group,

    Curtin UniversityTHS Territory Health ServicesVAHS Victorian Aboriginal Health ServiceVKHRCDU VicHealth Koori Health Research &

    Community Development Unit (now Onemda VicHealth Koori Health Unit)

    A Community Report from VicHealth Koori Health Unit

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  • 8 A Community Report from VicHealth Koori Health Unit

    BACKGROUNDThe Koori Health Unit at The University of Melbourne aims to actively seek to enhancecollaborative research and networking amongst researchers in the field of Indigenoushealth in Australia. Very little research on economics and Indigenous health has beendone in Australia, partly because there are very few health economists in Australia andpartly because, in general, economists have not been in Aboriginal health. As a result, thelink between policy development and research in health economics is considerably weak.

    There is general agreement in published literature and policy documents that Aboriginalpeople exhibit the worst indicators of health in Australia. The level of expenditure onAboriginal health services does not seem to reflect the gravity of the situation (Deeble et al. 1998). Appropriate levels of investment in Indigenous Australian health arerequired, among other measures, to address these problems: how health care can befinanced to achieve effective and efficient solutions needs to be addressed (McDermott1998; Stamp et al. 1998).

    Thus, the following fundamental questions:

    • Do policy makers have enough information and data when they allocate resources to Aboriginal health, given the limited health economic research done on Aboriginal health?

    • Do health economists and other researchers provide policy-relevant research findings to the policy makers and Indigenous health advocates?

    • How can the Australian primary health care system per se be reformed in order todeliver appropriate, cost-effective and timely services to the Aboriginal communities?

    • To what extent can investments in primary health care be related to health outcomes?

    • Do we have any benchmarks or minimum standards on primary health care interventions that could be used for evaluation purposes?

    • How do we build collaborations between policy makers, researchers and Indigenous communities that will lead to the development of a strategic research agenda in Indigenous health economics?

    In an attempt to address these fundamental questions, the Koori Health Unit organisedthe Health Economics Workshop. It was an invitation-only workshop, which aimed toachieve the following:

    – To facilitate the development of a policy-relevant research agenda in Indigenoushealth with a specific focus on primary health care services.

    – To bring together current and potential contributors to economics of Indigenoushealth in order to:

    – foster exchange; and

    – encourage the development of a network of common interest.

    – To support the development of a rigorous and relevant research agenda in Indigenoushealth economics by building links between analysts, practitioners and policy makers.

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  • 9A Community Report from VicHealth Koori Health Unit

    SECTION A: Community WorkshopThe Community Workshop aimed to consult the Koori community on issues of researchpriorities in Aboriginal health, and to canvass and gather information that would beuseful in developing a research agenda at the Health Economics Workshop. Severalmembers of the Koori community and organisations such as VAHS attended this workshop.

    A brief presentation on the Deeble II report, Expenditures on Health Services forAboriginal and Torres Strait Islander People 1998–99 (AIHW 2001), took place. It was thenfollowed by lengthy discussions about the implications of this report for the Kooripeople. Most of these discussions centred on the findings or issues to do with themethodology of the report.

    The Deeble II report essentially refined some of the methods used in the Deeble I report,Expenditures on Health Services for Aboriginal and Torres Strait Islander People (Deebleet al. 1998), in order to improve data estimates. Its findings included the following:

    • Medicare Benefits Scheme (MBS) and Pharmaceutical Benefits Scheme (PBS) benefits had increased since 1995–96 (to 41% MBS and 33% PBS of the non-Indigenous average), but were still far from equal, however measured.

    • There was a decreasing level of Aboriginal access to Medicare and PBS funding as remoteness increased, leading to increase in admissions to hospitals.

    • Given the poor health status of Aboriginal and Torres Strait Islanders, allocation ofhealth resources did not reflect needs. For example:

    • Total recurrent expenditure per person on Aboriginal health was approximately 22% higher than that on, or by, other Australians.

    • Aboriginal people were on average much higher users of publicly funded healthservices than other Australians.

    • Assuming relative income positions, public health expenditures on Aboriginaland Torres Strait Islander people appeared no different from that of similar andcomparable Australians.

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  • 10 A Community Report from VicHealth Koori Health Unit

    WORKSHOP DISCUSSION AND ISSUES

    One key issue that arose from the discussions in the workshop was that IndigenousAustralians had low levels of access to Medicare and pharmaceutical benefits. Thisreflected how many fewer visits Indigenous Australians paid to the generalpractitioner (GP) services and to chemists for prescribed medications.

    Participants felt that in order for any health intervention approaches to have asignificant impact on the health of Indigenous Australians, there was a need toshift approach and funding to primary health care.

    There is an urgent need to address population data and Aboriginal identificationadministrative datasets in hospitals and public health programs.

    Funding for Aboriginal health is not focused on infrastructure investments, but onrecurrent expenditure (as per mainstream services), yet Aboriginal healthinfrastructure is poor. There is a need to develop Aboriginal health infrastructure,including new buildings, equipment, etc., and to provide funding for more nursesand health workers.

    Aboriginal health intervention approaches are piecemeal, yet there is an urgentneed for a holistic approach. Thus, sectors such as education, income, employment,housing, dispossession and nutrition need to be addressed if significantimprovement is to be realised in Aboriginal health.

    The issue of program evaluation in Aboriginal health raised various questions:What programs really work? How much do these programs cost? Are theseprograms focused on solutions to problems, as opposed to describing them? Whichprograms are more cost-effective (value for money)? Should we employ dieticians,rather than subsidising fruits and vegetables in Alice Springs for example, to solvenutritional problems?

    Further questions were raised about the issue of priority setting: Aboriginal healthneeds more funding, but where should it be provided first? Which areas are morecritical—preventive or curative health? Is primary health care, as opposed tosecondary health care, more critical? Will these issues need to be solved first,before Aboriginal health problems are overcome?

    Ideas, suggestions and issues of concern from this Community Workshop werepresented at the Health Economics Workshop that was held on 29–30 November2001 and were considered extremely useful and vital. These findings were laterfound to be very helpful, as participants were able to include community concernsand preferences in the development of a health economics research agenda.

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  • 11A Community Report from VicHealth Koori Health Unit

    SECTION B: Health Economics WorkshopThis workshop was held in the Graduate Centre at The University of Melbourne. Theauthors of the workshop papers briefly presented their papers and then participated inthe discussions that followed their presentations. They clarified issues raised in the papersand drew out issues for further research. The following topics were discussed:

    ✓ Indigenous health policy—current issues and directions.

    ✓ Funding and expenditure.

    ✓ Priority setting and resource allocation.

    ✓ Building a policy-relevant research agenda; mapping the research agenda.

    ✓ Developing the capacity for research in Indigenous health economics.

    The Koori Health Unit had approached potential authors on the above topics, and thepapers (or their drafts) were pre-circulated. Authors had been asked to speak about theircentral ideas and results in the workshop. In the discussion of issues and/or questionsimmediately after the presentation, members of the audience provided critical responses,and some challenged the ideas and/or implications from the paper. At points during theworkshop, a panel provided commentary and critical responses on the cumulative issuesand pictures raised in the papers.

    In order to facilitate the discussions and to include and engage wider groups in theprocess, a simple survey questionnaire was circulated to relevant organisations andindividuals prior to the meeting. The questionnaire asked a short series of open-endedquestions on matters relevant to the discussion during the workshop. A summary of theopinions/answers was presented at the workshop. The broad questions asked included (a) ideas for research; (b) policy issues that need to be addressed in Indigenous healththat relate to health economics; (c) tools or infrastructure needs; and (d) priorities.

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  • 12 A Community Report from VicHealth Koori Health Unit

    DAY 1Thursday 29 November 2001

    SESSION 1: Indigenous Health Policy:Current Issues and Directions

    9.15–10.30Mary McDonald (OATSIHS): ‘Critical issuesfor an Indigenous health economicsresearch agenda’

    Craig Ritchie (NACCHO): ‘Aboriginalcommunity perspectives in healtheconomics research’

    Rhema Vaithianathan: (ANU): ‘Response:The relationship with the mainstreamagenda in health economics research’

    Chair: Paul Briggs (Victoria Community)

    SESSION 2: Funding and Expenditure

    11.00–12.30John Taylor / Boyd Hunter / MatthewGray (CAEPR): ‘Health Expenditure andIncome among Indigenous and otherAustralians’

    John Deeble (NCEPH) / John Goss (AIHW):‘The second national expenditure analysison Aboriginal health services’

    Chair: Jeff Richardson (CHPE)

    SESSION 3: Priority Setting andResource Allocation

    1.30–3.15Malcolm Nicholas (CGC): ‘The IndigenousFunding Inquiry: Key findings’

    Gavin Mooney (Curtin University):‘Weighted capacity to benefit and "mesh"infrastructure: An alternative approach tofunding in Aboriginal health’—presentedby Robert Griew (DHAC)

    Leonie Segal (Monash University):‘Resource allocation in Australia: Key issues’

    3.30–4.15Mandy Fitzpatrick (DoT): ‘Informationneeds and budget priority setting: Thecase for Aboriginal health’

    6.00Dinner speaker: Stephen Duckett (La Trobe University)

    DAY 2Friday 30 November 2001

    SESSION 4: Building a Policy-Relevant Research Agenda

    9.00–10.30Robyn McDermott (QH) / Phillip Mills(Tropical Public Health, QH): ‘Public healthpriority setting: Case study from the Torres Strait’

    Robyn McDermott (QH): ‘Improvingeffectiveness in primary health care’

    Peter d’Abbs (QH): ‘An evaluation ofKatherine West Coordinated Care Trial’

    Richard Murray (KAMSC): ‘Economics andprimary care: A practitioner’s perspective’

    SESSION 5: Mapping a ResearchAgenda 1

    11.00–12.30Carol Beaver (THS): ‘Health economics andits influence on decision-making in thepublic sector. Lessons from nine years oftrial and error in the Northern Territory’

    Jon Altman (CAEPR): ‘The establishment ofa corpus on Indigenous economic policyresearch: Lessons for Indigenous healthresearch’

    SESSION 6: Mapping a ResearchAgenda 2: What are the Priorities?(Moderated Discussion)

    1.15–2.15Michael Otim and Ian Scott (VKHRCDU):‘Priorities for Indigenous health research:Findings from a survey’

    Chair (DHAC): Robert Griew

    SESSION 7: Developing the Capacity for Research in Indigenous Health Economics

    2.15–3.30Tony Barnes (CRCATH): ‘Dataissues–deficiencies and opportunities’

    Discussion

    HEALTH ECONOMICS WORKSHOP AGENDA

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  • 13A Community Report from VicHealth Koori Health Unit

    On the opening day of the workshop,(then Associate) Professor Ian Andersonwelcomed the participants and Aboriginalcommunity leaders. He stressed the pointthat a research agenda, which comes outof this kind of consultative process, wouldmost likely be of benefit to both thecommunity and policy makers.

    SESSION 1. Indigenous Health Policy:Current Issues and Directions

    Paul Briggs chaired this session, whichinvolved papers prepared by MaryMcDonald (OATSIHS) and Craig Ritchie(NACCHO), and a commentary by DrRhema Vaithianathan (ANU) on the paperfrom OATSIHS.

    Mary McDonald (OATSIHS): ‘Critical issuesfor an Indigenous health economicsresearch agenda’

    The first presentation was by MaryMcDonald, and she emphasised the needfor decision-making, which is based onevidence. Across the health system,however, the availability of relevanthealth economics research varies,particularly in the area of Indigenoushealth. She hoped that the workshopwould be able to contribute to thedevelopment of a strategic researchagenda for health economics researchcapable of informing and influencingfuture policy development.

    Ms McDonald spent some time reflectingon issues in Indigenous health in order tounderstand the national policy agenda.These issues included the following:

    • The Australian Indigenous population isone of the least healthy in thedeveloped countries.

    • The Australian Indigenous populationdoes not have the same access tohealth services as the rest of thepopulation.

    • Members of the Australian Indigenouspopulation die nearly twenty yearsyounger than the rest of thepopulation.

    • The Australian Indigenous populationhas high infant mortality rates.

    • The cause of excess deaths in theAustralian Indigenous population ismainly circulatory diseases, respiratorydiseases, injury and endocrine diseases.

    She explained that the causes of the poor

    health of Indigenous Australians could bedue to the following factors:

    • Low income due to low paying jobs.

    • Low levels of education.

    • Loss of identity and dispossession.

    • Poor environmental health, poornutrition and lack of physical activity.

    • Excessive use of alcohol and tobacco.

    She explained that the Commonwealthgovernment’s approach focuses on primaryhealth care, and the model ofcomprehensive primary health care isparticularly appealing. This model of careinvolves a range of preventative,promotive, curative and rehabilitativeservices, and uses community involvementand community capacity buildingstrategies (Anderson et al. 2000).

    OATSIHS identified the following areas ofcritical health economics research:

    (a) Health services research

    Communities, health services andgovernments need information to informdecisions about resource allocation andthe organisation of health services. Someideas are listed below:

    • Assessment of costs and benefits ofdifferent models of service delivery andorganisation.

    • Improved efficiencies at the local leveland assessment of differences in needs.

    • Development of robust evaluationmechanisms that could be used byhealth service providers to evaluatetheir services and specific interventions.

    (b) Health system research

    This would involve priority setting in thecontext of the overarching policy goal ofimproving the health status, givenavailable funds. Research at this levelwould be directed at the ‘big picture’questions. What investments will be mosteffective in achieving our objectives?What structures will be most effective?What timeframes are required for change?And how do we achieve change? Whatlevers are available to promote bothtechnical and allocative efficiency withinthe context of culturally appropriateservice provision?

    (c) Non-health sector interventions thataddress determinants of health

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  • 14 A Community Report from VicHealth Koori Health Unit

    Research would extend beyond the healthsystem to consider the impacts of non-health sector actions such as:

    • What the whole-of-governmentpriorities should be, given the healthdeterminants.

    • Prioritising needs in the communities.

    Ms McDonald concluded by stating thathealth economics has an important role toplay in informing the provision ofeffective health care for Aboriginal andTorres Strait Islander peoples. Aframework setting out agreed priorityareas for research would be a usefuldevelopment and would assist in ensuringthat the research effort is targeted tomaximise its effectiveness.

    Dr Rhema Vaithianathan (ANU) ‘Response:The relationship with the mainstreamagenda in health economics research’

    Dr Rhema Vaithianathan from the ANUgenerated a lot of discussion andexcitement with her commentary on theOATSIHS paper, ‘Critical issues for anIndigenous health economics researchagenda’, presented by Mary McDonald.She stated that she was hoping ‘toprovoke some debate’, which she did. Inher presentation, she seemed to implythat health economics was no good inAboriginal health—health economistsresponded by seeking a chance to defendtheir profession.

    Dr Vaithianathan argued that healtheconomic approaches to the evaluation ofAboriginal community-based healthprograms had failed to capture criticalissues in Indigenous communities such asthe power of social connectedness andsocial infrastructure. She stated, ‘Not allthat is valuable is able to be valued’. Inother words, a health service that is notefficient doesn’t just mean that it spendstoo much money for what it does. Whatwe could look at is whether it helps buildthese networks in the community.

    Social connectedness helps the people totrust and believe in the services beingprovided, and to learn about how suchservices can help them for many years tocome. She argued that socialconnectedness, for example, in spite of thevital role it plays in diffusing knowledgeand practices in the community, cannoteasily be captured in economic evaluationstrategies: yet social connectedness can

    help us understand how healthpromotion, for example, can be effectivelyhandled in Aboriginal communities. Shesuggested the use of a ‘rights-basedapproach’ to set priorities in Aboriginalhealth: thus, she argued, if it is the rightof Aboriginal populations to have a lifeexpectancy that is the same as the non-Aboriginal population, then governmenthas to spend as much money as it can toachieve that equality in health status.

    Health economists present at theworkshop argued that health economicsprovides tools for setting priorities inAboriginal health, and that healtheconomics can critically help. Theyacknowledged the fact that most modelsfor economic evaluation do not purport tolook at systems, even in the purest forms;rather, they are useful for analysing healthprograms, which have criteria of what isgood and what is bad.

    Craig Ritchie (NACCHO): ‘Aboriginalcommunity perspectives in healtheconomics research’

    Craig Ritchie, the CEO of NACCHO, gave asoul-searching presentation on theAboriginal community perspectives inIndigenous health economics research.This paper looked at recent developmentsin funding arrangements for Aboriginalhealth, and acknowledged positivedevelopments in the area. However, itcriticised and questioned the slow pace ofchange. He asked, ‘When the need isindisputable and appropriate tools havebeen developed, can there be any logicalreason why funding increases areincremental rather than fundamental?’

    He explained that research—well-targeted, community initiated andcontrolled, and practically focusedresearch—undoubtedly has its place inachieving better health outcomes forAboriginal people. NACCHO is supportiveof such research and has not onlydeveloped proposed areas for research butis moving forward its proposed researchunit. How much research is needed tofurther establish the health inequalitybetween Aboriginal and non-Aboriginalpeople? Which area of public policydevelopment is based on completeknowledge of all possible researchquestions—and why should these criteriabe applied to the field of Aboriginalhealth? The main problem Aboriginal

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    health faces is lack of adequate funding.He posed a question as to whether or nota lack of research is impeding moreequitable funding for Aboriginal health.

    What are the barriers to adequate fundingfor Aboriginal primary health care?

    NACCHO contends that structural issues, notlack of research, are impeding adequatefunding.1 He explained that significantprogress in developing the ‘machinery’ forimproving Aboriginal health had beenmade in recent years. In addition, we nowhave a Commonwealth-set benchmark forAboriginal health funding. Although theremight be debate about the level of thebenchmark, its adoption by theCommonwealth is undoubtedly a significantstep forward. There is no logical reason whyall Aboriginal communities should not bebrought up to this baseline immediately—there is simply a lack of funds.

    Research can help direct the Aboriginalhealth dollar to be spent in the mosteffective way, but a lack of research iscertainly no reason to withhold funds.Barriers that impede improved funding forAboriginal health are likely to include:

    • Structural factors—the Federal systemand the sharing of responsibility forhealth between State/Territory andCommonwealth levels has long beenidentified as a significant barrier toimproving Aboriginal health.

    • Lack of coordination—Aboriginal healthis influenced by many socialdeterminants such as employment,housing and education. Therefore, manyplayers are outside the health system,but need to be working together beforepositive change can be made.

    • Political factors—the three-yearelection cycle tends to encourage short-term thinking. This environment is notconducive to addressing long-termissues such as Aboriginal health.

    • Area specific factors—health is a highlycompetitive environment and theneeds of acute care often takeprecedence over illness-preventive andhealth promotion measures.

    • Societal trends—environments of rapidchange, economic instability and thelike can generate societal insecurity.

    The emergence of One Nation as apolitical force demonstrated how thesetrends can lead to increasedxenophobia, racism and conservatism.

    • National commitment—some issues,even those that may have significantimpediments, galvanise action at anational level and achieve fundamentalchange. For example significant reformof gun control was achieved in thewake of the Port Arthur massacre.Aboriginal health to date has notachieved that level of nationalconsensus, and is often seen as anelectorally unattractive issue.

    NACCHO categorised issues for researchinto what Mr Ritchie called first andsecond order research issues.

    First order or fundamental researchpriorities would include the following:

    • First, there needs to be someinvestigation of influences on structuralinput, social input, priority setting andfunding, and resource allocations inAboriginal health.

    • Second, there is need to develop betterdata on health expenditure. Perhaps aspecific survey needs to be designedand implemented rather than relyingon the strength of data sources thatare not designed for the purpose ofmeeting Aboriginal health expenditure.

    • Third, there is need to determine somelevels of funding required. For exampleif Aboriginal people are three times assick as non-Aboriginal people, it maybe insufficient to spend only threetimes as much on Aboriginal health ason non-Aboriginal health.

    In the terms of second order researchpriorities, these would include thefollowing:

    • Evaluation of primary health care,recognising community developmentssuch as services accessibility, availability,and acceptability.

    • Development of some funding modelsfor remunerating GPs and healthprofessionals in population health.

    • Economic analysis of mainstream budgetinitiatives, particularly those beingchannelled through the PBS and Medicare.

    1 The PHCAP initiative in remote areas is benchmarked at four times the average use of MBS, and in non-remote areas at two times average MBS usage.

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    • Identification and dissemination of themost cost-effective approaches in theAboriginal health sector.

    • Analysis of the cost-effectiveness and health benefits of community-controlled health services.

    • Assessment of optimal fundingbetween physical health and social andemotional well-being.

    • The role of price of food in nutritionshould be investigated because ruraland remote areas suffer increased costs,particularly of fresh food items.Possible subsidies to rural and remoteareas which can target fruit andvegetable supplies, in particular, shouldbe researched, as well as increases ofwage/welfare rates to acknowledge the

    relative disadvantage of consumersliving in remote areas and Aboriginaland Torres Strait Islander communities.

    • Incentives for well persons’ healthchecks (Aboriginal and Torres StraitIslander population) in primary healthcare should be researched. There areno financial incentives (for primaryhealth care providers to Aboriginalpopulations) used as levers for the earlydetection of chronic disease as part of awell person’s check. NACCHO hasdeveloped a detailed evidence-basedproposal for financing well persons’health checks using the MBS as theincentive lever. However, otherfinancial levers may be potentialincentives, and these options should be investigated.

    Summary of Session 1

    The speakers in this session emphasised the need for decision-making based onevidence. The evidence in the area of Indigenous health is particularly poor. MaryMcDonald hoped that the workshop would be able to contribute to thedevelopment of a strategic research agenda for health economics research capableof informing and influencing future policy development. She explained thatOATSIHS had identified health services, health systems and non-health sectordeterminants of health as areas for critical health economics research. Assessmentof need, evaluation of services and identification of non-health determinants ofhealth would be crucial for communities and agencies in their priority-settingprocesses. Thus, health economics has an important role to play in informingdecision-makers about the provision of cost-effective health care for Aboriginaland Torres Strait Islander peoples.

    Dr Rhema Vaithianathan responded that health economic approaches toevaluation of Aboriginal community-based health programs were most likely to beundermining community efforts to make use of the power of social connectednessand other social infrastructure. Economic approaches, she argued, tend to renderhealth services that spend too much money for their services and are inefficient,yet some of the services provided are priceless. These priceless services couldinclude social/cultural networks in the community. She argued for the use of non-economic models for setting priorities in Aboriginal health, such as a ‘rights-basedapproach’. Thus, if it is a right for Aboriginal populations to have life expectancywhich is the same as the non-Aboriginal population, then government has tospend as much money as it can to achieve that equality in health status. However,she was not able to expound on how this approach could be used as a formula inpriority setting.

    Craig Ritchie explained that the main problem facing Aboriginal health is lack ofadequate funding. He said that research has its place in achieving better healthoutcomes for Aboriginal people, and NACCHO supports such research. However, hesaid, structural issues, not lack of research, are impeding adequate funding. Suchissues include: Federal system and the sharing of responsibility for health betweenState/Territory and Commonwealth levels; lack of a co-ordinated approachbetween the many players outside of the health system, such as employment,housing and education; and other political factors and lack of a nationalcommitment. He therefore argued for the prioritisation of research.

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    SESSION 2. Funding and Expenditure

    After a brilliant morning of policy-relateddiscussions, it was time for some ‘hard, dryand possibly boring’ stuff to be discussed.In this session, Doctors Matthew Gray,Boyd Hunter and John Taylor discussed therelation between income and healthexpenditure for Indigenous and non-Indigenous Australians. After this, JohnGoss and Dr John Deeble presented theirfindings from an earlier report they hadwritten entitled Expenditure on HealthServices for Aboriginal and Torres StraitIslander People.

    Dr John Taylor / Dr Boyd Hunter / DrMatthew Gray (CAEPR): ‘Healthexpenditure and income amongIndigenous and other Australians’

    This paper asked about the relationshipbetween income and health expenditurefor the Indigenous and non-Indigenouspopulations. The analysis drew outdifferences in expenditure between theIndigenous and non-Indigenouspopulation holding a constant incomelevel. The paper revealed that for allAustralians in the same income groups,there was no significant difference in totalspending on Indigenous people comparedwith other Australians. However, ifhospital expenditure is excluded, thenIndigenous expenditure is significantlylower for respective income groups. Thatis, controlling for income, Indigenousexpenditure (other than on hospitals) ismuch lower than for other Australians.

    The study analysed data from the 1995National Health Survey (NHS) conductedby the ABS. The questions asked in the1995 NHS established the utilisation levelof medical services. This data included GPvisits, specialist visits, allied health,hospital visits and pharmacy visits.Previous analysis of the distribution ofhealth expenditure in Australia had notedthat total health spending per capita washigher for Indigenous Australianscompared to the rest of the population.However, the size of higher expenditurewas less than might be expected given thesize of the gap in health outcomes.Because of the relatively low incomes ofIndigenous people, this pattern of higherspending was seen as an indication ofgreater public expenditures on poor

    people rather than on rich, as notions ofequity would suggest is appropriate.

    The main weakness of the study was thatit used poor quality data; therefore, itrestricted what could be said withconfidence about the relationshipbetween health expenditure and incomestatus for the Indigenous population.Thus, authors were unable to directlyestimate the relationship betweengovernment health expenditure andincome. Furthermore, the authors hadexcluded 20% of the Indigenouspopulation who live in sparsely settledareas of Australia from the analysisbecause of measurement errors. This wasthe very group which available datasuggests has the poorest health outcomes.Future research needs to clarify the role ofmeasurement error in Indigenous income,and hence identify the extent to whichincome status can be usefully applied asan instrument for policy analysis.

    Dr John Deeble (NCEPH) / John Goss(AIHW): ‘The second national expenditureanalysis on Aboriginal health services’

    John Goss presented the results from thesecond national expenditure analysis onAboriginal health services, using 1998–99data that he and Dr John Deeble hadconducted. Dr Deeble providedcommentary on the findings, which werealso discussed in the CommunityWorkshop.

    The second national expenditure analysison Aboriginal health services, or Deeble IIreport, had refined some of the methodsused in the Deeble I report in order toimprove MBS and PBS estimates. It usedthe BEACH Methodology (BetteringEvaluation and Care of Health), often usedin the national and continuing survey ofGP activity. A separate survey was alsoused to estimate PBS usage. The Deeble IIreport also extended the analysis inDeeble 1 by examining healthexpenditures for Aboriginal and TorresStrait Islander (ATSI) peoples in remoteregions of Australia (home to 27.5% ofthe ATSI population, compared with 2.6%of the non-Indigenous population)compared with more accessible regions.

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    Deeble II findings included the following:

    • The 1998–99 health expenditures weresimilar to those in the Deeble I report.

    • MBS and PBS benefits had increasedsince 1995–96 (to 41% MBS and 33%PBS of the non-Indigenous average),but were still far from equality,however measured.

    • There was a decreasing level ofAboriginal and Torres Strait Islanderaccess to Medicare-funding and PBS asremoteness increased, leading to anincrease in admissions to hospitals.

    • Aboriginal and Torres Strait Islanderhealth status was very poor comparedwith that of non-IndigenousAustralians, but these greater healthneeds were not reflected in greaterallocation of health resources.

    It is worthwhile noting that data producedfrom the Deeble II report wascomprehensive by world standards. Mostreports on Indigenous health expenditureare limited in scope: some only coverIndigenous-specific health programs andothers only cover Government-fundedprograms. The Deeble II study covered allhealth programs across government andprivate sectors.

    The fundamental limitation of this reportis that it only describes expenditure onhealth services. It does not analyse theconnection between health services andexpenditure and health. It is thereforedifficult to deduce what extra healthservices are needed in which areas inorder to improve the health of Aboriginaland Torres Strait Islander people.

    Summary of Session 2

    This session explored the relationship between income and utilisation of healthservices and levels of public expenditure on Aboriginal health. The paper byDoctors John Taylor and Boyd Hunter revealed that total spending on IndigenousAustralians compared with other Australians in the same income groups waspractically the same. However, if hospital expenditure is excluded, then Indigenousexpenditure is significantly lower for respective income groups.

    The findings from the second national expenditure analysis on Aboriginal healthservices revealed that MBS and PBS benefits had increased since 1995–96, but werestill far from equality with mainstream services. However, there was a decreasinglevel of Aboriginal and Torres Strait Islander access to Medicare-funded servicesand PBS as remoteness increased, leading to increases in admissions to hospitals.Furthermore, Aboriginal and Torres Strait Islander health funding did not reflectthe poor health status of Aboriginal people compared with health services of non-Indigenous Australians.

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    SESSION 3. Priority Setting andResource Allocation

    This session involved papers by MalcolmNicholas (CGC), Dr Leonie Segal (MonashUniversity), Prof. Gavin Mooney (CurtinUniversity) and Shane Houston (WAHealth), and Mandy Fitzpatrick (DoT).

    Malcolm Nicholas (CGC): ‘The IndigenousFunding Inquiry: Key findings’

    The ‘Indigenous Funding Inquiry’, as it wasknown then, resulted from part of anelection policy of September 1998: theMinister for Aboriginal and Torres StraitIslander Affairs promised to ask theCommonwealth Grants Commission to finda way to measure the relative‘disadvantage’ between Indigenousgroups, which would help them decidehow to better allocate funding. Thegovernment appointed a commission ledby four part-time commissioners, includingtwo Aboriginals. The terms of referencesincluded the following:

    • To develop a way to compare the needsof different Indigenous groups in termsof housing, health, infrastructure,education, and training anddevelopment.

    • To find out where Indigenous fundingcame from, and how much eachIndigenous groups was spending foreach of the above areas.

    • To use current information to set up ascale by which need could bemeasured.

    • To use this scale in the funding ofareas/regions such that funding isproportional to need.

    The inquiry found a few main facts, andwas able to point out some importantissues regarding resource allocation inIndigenous services. These included:

    • The health status of Aboriginal peoplein Australia is much lower than that ofother Australians.

    • The more distant and remote theIndigenous people are, the worse theirhealth.

    • The commissioners argued that at leasta doubling of current funding toAboriginal health would be fair(because it would take a lot more fundsto get the level of funding equal tothat for other Australians).

    • The commissioners also found thatAboriginal health services are receivingless, or just enough, money to providetheir services. None of these organisationsreceive more than what they need.

    Limits on the inquiry

    The commissioners noted many problemsduring the study. Most of the problemswere related to reliability of data anddata-gathering issues. They noted thatmost of the information used was fromthe 1996 Australian Census, which is notgood and reliable for the small percentageof people who are Indigenous.

    During the inquiry, many people preferreddealing with the big health status gapbetween Indigenous and non-Indigenouspeople, rather than the differencesbetween Indigenous groups. TheCommission, however, could notinvestigate this point further as it was notpart of the terms of reference(government had only wanted to knowabout differences between Aboriginalgroups). Trying to bridge the gap betweenIndigenous and non-Indigenous peoplewould mean the need to give morefunding to Aboriginal health, whereasalleviating differences between Aboriginalgroups would simply require the re-allocation of existing levels of funding.The Commission noted that this re-allocation would mean that somecommunities would lose money, whichothers would gain. Large changes in howresources are distributed could also resultin the lose of some of the advantages thatcommunities gain from long-term funding.

    Some other important services affectingthe quality of life for Indigenous peoplewere mentioned by participants, but couldnot all be covered by the Commission’sstudy. These areas were related to cultureand land, law and order, communityservices and welfare services.

    Dr Leonie Segal (Monash University):‘Resource allocation in Australia: Key issues’

    This paper looked at aspects of resourceallocation in the health sector andconsidered the rationale for an integratedpopulation-based health services planningand funding model called ‘singlefundholding’. Further, it described acomplementary priority-setting modeldesigned to allocate resources betweenprograms and services at the regional level.

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    A regional2 single fundholder model involves:

    The bringing together of all the ‘health’funds (scope to be determined) for theentire population of a region into a singleplanning and budget framework, to bemanaged by an agency made up of theconstituent members.3 The fundholderhas the sole responsibility for the planningand purchase of health services for thedefined population. The budget is basedon a population needs adjusted formula.

    In theory, the benefits of a regional singlefundholder model derive from theincentives inherent in the model. Thefundholder could be an Aboriginalcommunity-controlled organisation. It isparticularly pertinent for the resourcing ofhealth care for Indigenous Australiansbecause of:

    • Its capacity to achieve greater equity of access.

    • Its support for holistic and long-termservice planning, and healthpromotional and public healthapproaches.

    • The possibility of incorporating a widerange of health and human services inthe health services planning.

    • The support for engagement of thecommunity in the health servicesplanning task.

    • The opportunity for system-widechange and support for qualityassurance initiatives.

    • Its potential ability to control PBS andMBS budget blowouts, since Aboriginalpeople have a relatively low rate ofprivate medical services available.

    Health care reform for IndigenousAustralians is already incorporating theseconcepts: first, through the fourAboriginal coordinated care trials (CCT),particularly the Katherine West and TiwiIsland CCT. These represent an importantattempt to implement a regionally-basedfundholding and health services planningmodel, covering many but not all healthservices. These trials have been extendedand included within the Primary Health

    Care Access Program (PHCAP). Under thisprogram, several sites, which havecompleted joint regional planning, arefunded to support the delivery of acomprehensive primary health careservice—including clinical care, illnessprevention and early intervention. Theprogram is directed to the health needs ofIndigenous people, with funding reflectingneed and costs of service delivery.

    The key research question is how can thepromised benefits from adoption of apopulation-based approach to healthfunding and delivery be realised?Elements of the model are alreadyincorporated in PHCAP, such as the NSWArea Health Authorities which are fundedfor State services on the basis of a needsadjusted formula. Dialogue is requiredaround the key model attributes: (a) thefunding formula; (b) the preferredmanagement and administrativeframework; (c) the approach to prioritysetting; (d) quality assurance techniques;and (e) the role for and means of datacollection, analysis and feedback.

    Prof. Gavin Mooney (Curtin University) /Shane Houston (WA Health): ‘Weightedcapacity to benefit and ”mesh”infrastructure: An alternative approach tofunding in Aboriginal health’

    This paper was presented by Robert Griew(DHAC), in the absence of Prof. GavinMooney and Shane Houston. The paperdeveloped an approach to resourceallocation in Aboriginal health called‘Weighted capacity to benefit and "mesh"infrastructure’. The authors argue that thisapproach could also be used on thebroader issues of allocation betweenAboriginal and non-Aboriginal health. The approach was first used in asubmission by the Office of AboriginalHealth, Health Department of WA, to theCGC Inquiry into Indigenous Funding (CGC 2001). The authors argue that thebasis on which government or decision-makers allocate resources is normally lessthan ideal. Such resource allocationformulae tend to see the relevant issues inresource allocation in terms of ‘health

    2 There are also more limited single fundholder models, such as those restricted to a disease group, age group (such as theelderly), an insured population or a particular modality of care.

    3 Appropriate membership should reflect scope of the services to be covered, and include, at least, an Area Health Service(where relevant), the State or Territory Health Department, the Commonwealth Department of Health and Aged Care, consumerrepresentation and possibly relevant interest groups such as NACCHO, Divisions of General Practice.

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    need’ or the ‘size of the problem’ ratherthan the ‘capacity for Aboriginal people tobenefit’ when resources are allocated. Thisapproach concentrates on ‘capacity tobenefit’, and it is weighted to takeaccount of the relative disadvantage ofdifferent communities that might receivefunding through this approach.

    In this model, Aboriginal definition of‘need’ is not restricted to the size ofhealth problems but includes thefollowing four components:

    (i) Cultural security.

    (ii) Physical well-being.

    (iii) Good environment.

    (iv) Freedom from poverty.

    Cultural security is defined by ShaneHouston (2001) as being:

    … a commitment that the constructand provision of services offered bythe health system will notcompromise the legitimate culturalrights, views, values andexpectations of Aboriginal people.It is a recognition, appreciation andresponse to the impact of culturaldiversity on the utilisation andprovision of effective clinical care,public health and health systemsadministration. Cultural Security isabout ensuring that the delivery ofhealth services is of such a qualitythat no one person is afforded aless favourable outcome simplybecause they hold a differentcultural outlook.

    Communities and regions vary in terms ofgeographical position and remoteness,and hence cultural security may differ. Theneed to build into any approach anallowance for cultural security isimportant. This would ensure thatAboriginal people face no great accessbarriers to services because of culturaldifferences. For many services, especiallymainstream ones but also some specificAboriginal services, it is the case thatbarriers remain in terms of culturalappropriateness and the extent to whichservices are designed for Aboriginalpeople, and not just in terms of trainingstaff in cultural awareness.

    Can this approach be operationalised?Clearly that remains to be seen. However,

    the authors argue that it is important thatthe basis of such resource allocationformulae is sensible and reasonable andthat the issues of operationalisation,measuring and quantification come later.They have attempted to operationalise theformula for Western Australia (CGC 2001),and what they have achieved theresuggests that the approach can bepractically useful and that it is possible tomake it user-policy friendly.

    Mandy Fitzpatrick (DoT): ‘Informationneeds and budget priority setting: Thecase for Aboriginal Australian health’

    Mandy Fitzpatrick outlined the processesinvolved in drawing up theCommonwealth government’s budget fora financial period. She briefly explainedhow government draws up the budget,analyses current circumstances, prioritisesneeds and makes decisions. The processpoints to the use of, and need for, reliableindicators and data when assessing need.It has also been noted that Indigenoushealth issues are given high priority whenit comes to resource allocation andbudgeting. It is hoped that research willreveal more about this area and result inbetter, more appropriate fundingstrategies.

    She noted that the Treasury considersIndigenous health issues as high priorityissues, both within the health portfolioand across all portfolios, and that researchcan provide valuable information aboutthe causes and effects of Indigenoushealth problems that can then be used toinform policy makers. In particular,research can inform the Treasury of thedifferences between remote and urbanhealth issues and the importance ofhousing, education and employment toimproving Indigenous health outcomes.Research could also contribute throughmeasuring the effectiveness of currentinitiatives and identifying areas forimprovement.

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    DINNER SPEECH (by Professor Stephen Duckett, La Trobe University)

    Professor Stephen Duckett started hisspeech by telling a story of how somepeople in country Victoria wanted toconfirm if, indeed, the word ‘Woomera’ isan Aboriginal word meaning ‘too manysmall hospitals’. He had been quoted inthe papers as saying so. He was veryhumorous and had people laughing allthrough the speech.

    He talked about economics and itsapplication to address Indigenous healthissues. He briefly discussed issues in healtheconomics such as priority setting. Henoted that, like every part of economics,there is some debate about issues such aspriority setting. For example someeconomists would argue that explicitpriority setting actually has some

    disadvantages. Thus, it is not immediatelyclear that explicit priority setting isnecessarily the right way to go in all areasof public health. This is because itsometimes involves excluding someconsumers. He was, however, convincedthat economics can contribute to prioritysetting quite reasonably. It can certainlycontribute to clarifying assumptions,clarifying costs, clarifying concepts,clarifying benefits broadly and so on.

    He explained that the key part of thework he has done over the years hasinvolved working on technical efficiency.He added that in the first work that hedid in relation to Aboriginal medicalservices, which was back in the early1970s, he concluded that it was far betterto act on problems in Aboriginal healthsince the situation was so bad. He hadargued that one may as well invest moneyin services rather than trying to evaluate

    Summary of Session 3

    The Inquiry into Indigenous Funding found that the health status of Aboriginalpeople was much lower than that of other Australians; the more distant andremote that Indigenous people are, the worse their health is; Aboriginal healthservices are receiving less, or just enough, money to provide their services; and thatat least a doubling of current funding to Aboriginal health would be fair (becauseit would take a lot more funds to get the level of funding equal to that for otherAustralians). However, the commissioners noted problems of reliability of data anddata-gathering as issues that require redress.

    The papers by Prof. Gavin Mooney and Shane Houston, and Dr Leonie Segalpresented some models for resource allocation in Aboriginal health. Dr Segalsuggested the use of a ‘single fundholding’ model to address issues of resourceallocation in Aboriginal health because of theoretical benefits inherent in thismodel, such as issues of equity; the holistic nature of Aboriginal health; andengagement of the community in the health services planning task. She noted thatthis approach is already being implemented in some programs such as KatherineWest and Tiwi Island CCT; PHCAP; and the NSW Area Health Authorities.

    However, Prof. Mooney and Mr Houston argue that such resource allocationformulae (NSW Area Health models) tend to see the relevant issues in resourceallocation in terms of the ‘size of the health problem’ and are therefore notappropriate for Aboriginal health. Instead, they suggest a new model based on the‘capacity to benefit’ concept. This concept is weighted to take account of therelative disadvantage of different communities that might receive funding throughthis approach.

    The strengths of this approach lie in the expansion of Aboriginal health need toinclude cultural security, poverty and environmental issues, other than physicalwell-being. The use of cultural security as an integral concept is particularlyimportant as this would ensure that the delivery of health services is of such aquality that no one person is afforded a less favourable outcome simply becausethey hold a different cultural outlook.

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    them: the need that was being addressedby these services was so great that theevaluation wouldn’t help in settingpriorities and would probably be a wasteof money.

    Working in the area of Indigenous healthmight actually contribute to theunderstanding of the economicsprofession, and help economists generally.This is because you can’t work effectivelyin Indigenous health without recognisingthe importance of the community, withoutvaluing working with the community, andwithout actually engaging in community,not as subjects but as partners.

    SESSION 4. Building a Policy-Relevant Research Agenda

    This session involved papers by Dr RobynMcDermott and Dr Phillip Mills, Dr Peterd’Abbs and Dr Richard Murray, whichaddressed practical issues of priority settingin Aboriginal and Torres Strait Islanderhealth. The authors discussed whatinterventions or approaches in the field ofAboriginal health were actually working,and what lessons could be learned fromsome priority setting processes.

    Dr Robyn McDermott (Tropical PublicHealth, QH) / Dr Phillip Mills (TropicalPublic Health, QH): ‘Public health prioritysetting: Case study from the Torres Strait’

    Dr Robyn McDermott presented the papershe co-authored with Dr Phillip Mills. Inthis paper, the process of priority setting isdiscussed as being essential to address themajor threats to the health of the public.This paper is based on the priority settingprocess conducted in the Top End ofQueensland (district).

    The district had embarked on apopulation-based health strategy, underthe guidance of the Torres Strait HealthCouncil. This strategy reoriented thehealth services from individual-centredclinical services to focus additionally onpopulation-level outcomes. A strategy foreach public health priority was devised ata ‘summit’, where community and expertopinion was synthesised into a localimplementation plan. This plan tookaccount of both the scientific evidenceand local cultural, political and economicrealities. It was a combination ofintersecting community, public policy andhealth service responsibilities. When the

    strategy was later reviewed by the HealthCouncil and senior health providers in thedistrict, it was found that clinical serviceswere improving, but prevention programswere not. Thus, prevention programscompeted unfavourably with clinicalprograms for resources within the samestrategy. Dr McDermott and Dr Mills arguedthat this was due to the fact that cliniciansare powerful in the health system, bothfrom the point of view of commandingresources and having a relatively strongevidence base for most programs.

    They stated that priority setting is not anexplicit process but a function of fivecriteria:

    • Public outrage—how much it worriespeople.

    • Burden of disease—looking at thecombination of how many peoplepriority setting affects, how it affectsthem, how long it affects them for, andwhether it kills them or not.

    • Current cost to the health service andto the community—not just by thedisease, but also other illnesses that thedisease can cause.

    • Preventability—is there a good chanceand proof that we can stop peoplefrom catching this disease?

    • Identified national priorities—is theAustralian government also worriedabout the disease? This is important ingetting money and support from thegovernment.

    There is, therefore, need for effectivemechanisms that ensure that there is amore rational investment across the carecontinuum to maximise health outcomes.One such framework is the Health BenefitGroup (HBG) framework, which wouldmake investment choices more explicit.HBG framework would help the districtestimate how marginal investmentsupstream would affect outcomes. Thisframework allows movement fromprimary prevention to management ofend-stage disease in the continuum. Intheory, investments in better primaryclinical care should marginally decreasehospitalisation rates for preventablecomplications. Investments in upstreamprimary prevention would be expected toreduce incidence, or at least slow the rate, of increase in incidence of thechronic disease.

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    Dr Robyn McDermott (Tropical PublicHealth, QH): ‘Improving effectiveness inprimary health care’

    In this paper, Dr Robyn McDermott arguesthat it is possible to achieve equity issuesin health care and improved outcomes inchronic disease (CD) management bystructuring primary health care (PHC) towork differently. International and localevidence exists to demonstrate it. Forexample great gains can be achieved bysimply utilising local Indigenous staff moreeffectively, with few additional resources,to improve the quality of PHC in remotecommunities.

    This work is based on three studies innorthern Queensland, which sought toshed some light on the epidemiology,clinical effectiveness (including the use of ‘expert’ clinical systems and qualityimprovement) and economics (currentexpenditure) of type 2 diabetes (T2DM)among Indigenous people. There hadbeen increased investments in themanagement of CD. The results from thestudy showed that at least as muchattention needs to go toward improvingthe quality of the services and reach ofexisting PHC (including prevention) for chronic disease if outcomes are to improve.

    Dr McDermott concluded that improvingoutcomes is not merely a matter ofincreased investments, but well-managedPHC services. Well-managed PHC can beachieved through the reorganisation ofIndigenous PHC services. She argued thatthis reorganisation ought to be from anacute care model to one that supports CDmanagement systems and promoteseffective prevention. These would includepopulation-based services supported bypatient registers, expert systems, recallsystems and effective communication ofhealth information to clients andcommunity groups.

    Dr Peter d’Abbs (Tropical Public Health,QH): ‘An evaluation of Katherine WestCoordinated Care Trial (KWCCT)’

    In this paper, Dr Peter d’Abbs, SamanthaTogni and Ross Bailie evaluated theKWCCT. KWCCT is an Aboriginal CCTprogram,4 an offshoot of the ‘mainstream’CCT program, which in turn evolved fromthe Commonwealth government’s

    response to a discussion paper prepared in1995 for the Council of AustralianGovernments (COAG). The COAG paperargued that health services for patientswith chronic and/or multiple conditionscould be provided more effectively andefficiently through a system of fundspooling and care coordination(Commonwealth Department of Healthand Family Services 1995). TheCommonwealth agreed to fund a numberof trials in which these principles weretested. Nine ‘mainstream’ trials werefunded, as well as four Aboriginal CCT.

    The Aboriginal trials incorporated theprinciples of funds pooling and carecoordination, but also shared threedistinct features of their own, namely (1) acommitment to Indigenous communitycontrol; (2) a whole-of-population focus(whereas the mainstream CCT targetedclinical populations); and (3), in the case ofremote area trials, additional funds in theform of a capitation-based ‘cash out’ ofMBS and PBS benefits over and aboveexisting expenditure.

    Dr d’Abbs and members of the evaluationteam argued that the KWCCT was asuccess, particularly in three importantrespects:

    • The Health Board became an effectivemechanism for asserting Aboriginalcontrol over purchasing and providinghealth services in the Katherine Westregion.

    • Funds pooling and the addition of MBSand PBS ‘cash outs’ generated new andexpanded health services in the region.

    • The CCT brought about improvementsin clinical practice, as measured in aseries of clinical audits.

    However, they also contend that (a)success was a product of a number ofdevelopments and contingencies that hadnot been envisaged within the terms ofthe trial itself, and (b) the evaluationmethodology originally proposed for thetrial did not provide an adequateconceptual framework within which todescribe the evolution of the trials or toaccount for outcomes observed.

    Dr Richard Murray (KAMSC): ‘Economicsand primary care: A practitioner’sperspective’

    4 Although it was officially designated as an Aboriginal and Torres Strait Islander CCT program, no trials were conducted in theTorres Strait Islands. For convenience, therefore, we shall refer to the program simply as an Aboriginal CCT program.

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    Summary of Session 4The paper by Dr Robyn McDermott and Dr Phillip Mills reported the review of thepopulation-based health strategy of the Top End of Queensland (district) as apriority setting model. They found that prevention programs competedunfavourably with clinical programs for resources within the same strategy, andsuggested an alternative model (HBG) which would address an imbalance betweenthe two programs.

    In another paper, based on three studies in northern Queensland, Dr McDermottargued that it is possible to achieve equity issues in health care and improvedoutcomes in CD management without necessarily increasing investments. This canbe done by structuring PHC to work differently—simply utilising local Indigenousstaff more effectively, and with few additional resources, to improve the quality ofPHC in remote communities.

    Dr Peter d’Abbs and members of the evaluation team argued that the KWCCT waseffective in achieving the stated objectives. However, the national evaluationmethodologies for Indigenous Australian trials needed to be context specific. Theyalso contended that (a) success was a product of a number of developments andcontingencies that had not been envisaged within the terms of the trial itself, and(b) the evaluation methodology originally proposed for the trial did not provide anadequate conceptual framework within which to describe the evolution of thetrials or to account for outcomes observed.

    This paper provided a view ‘from theground’ on some Indigenous healtheconomics issues from a Kimberleyperspective. It attempted to contextualisethe often-abstract debate around needsassessment, application of resourceallocation models and determination ofthe value of health investments.

    The Kimberley is a remote and climaticallyharsh region of Australia with apopulation dispersed across a vast area of421,130 square kilometres. The Aboriginalpopulation, estimated at 15,500 in theKimberley Regional Aboriginal HealthPlan, makes up 40% of the regionalpopulation overall (Atkinson et al. 1999).Over a quarter of the total WA Aboriginalpopulation lives in the Kimberley.

    From 1993 to 1998, 80% of total bed-daysacross the six Kimberley hospitals were forAboriginal people, as were 65% of allbed-days spent in Perth teaching hospitalsby Kimberley residents. Age standardisedmortality rates for Aboriginal people inthe Kimberley are threefold higher thanfor the general population. This reflectshigher acute infectious morbidity(pneumonia, gastrointestinal disease andsuppurative skin disease), cardiovasculardisease (ischaemic heart disease, renaldisease) and injuries (accidental, MVA and other).

    A review of expenditure on health servicesin the Kimberley region was undertakenas part of the Kimberley RegionalAboriginal Health Plan in 1999. Total

    expenditure through State communityhealth and Aboriginal community-controlled health services in 1997/98 was$9.7 million. Hospital expenditure in theregion for the same year was $28.5million. However, primary care typeservices are also provided throughhospitals. Per-person expenditure onprimary care-type services for Aboriginalpeople in the Kimberley was estimated as$810 per head (compared with $805 forthe non-Aboriginal Australian in theKimberley). Estimated Aboriginal hospitalexpenditure of $1168 per-person is aboutthe same as State-wide Aboriginal per-person expenditure of $1147.

    The Kimberley experience illustrates manyof the common themes in health serviceprovision for remote Aboriginalcommunities: demonstrably inadequateglobal health care resources; over-relianceon hospital-type services for primaryhealth care; cultural safety issues forhealth services that employ predominantlynon-Aboriginal ‘itinerant’ staff; and failureof government policy in application ofequity principles.

    There are various views on how to leverchange in Aboriginal health. Whilecollection and use of data on poor healthstatus, deficient health servicecapacity/quality and inadequate healthfunding are important, there is noevidence that a lack of such data isresponsible for government failure tocommit the necessary resources and effort.

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  • SESSION 5. Mapping a ResearchAgenda 1

    Carol Beaver and Prof. Jon Altmanpresented at this session. Theirpresentations involved experiences drawnfrom the Northern Territory (NT)Department of Health and from CAEPR asa research unit in the ANU.

    Carol Beaver (THS): ‘Health economics andits influence on decision-making in thepublic sector. Lessons from nine years oftrial and error in the Northern Territory’

    Based on her nine years of experiencewith THS, Carol Beaver explained what‘health economics’ is and its relevance tohealth care. She explained that economicsis not really about money; it is aboutmeasuring things in terms of a commonvalue, and money does just that. Thus,money is used as a common measure for‘value’.

    Estimating the value of everything in acommon unit allows us to compare theworth of one thing to another. When wecan compare things against each other, itmakes it easier to find the things that areworth more than the others. We can thenprioritise these things. Ms Beaver pointsout that by measuring the value ofeverything, economists aren’t out to saveas much money as they can by spendingthe least amount. They are moreconcerned with the ‘re-allocation’ ofresources—to take the extra money fromsome place where it is not being used andput it in another area that doesn’t haveenough and needs it more. She says it’s allabout rearranging and juggling things sothat everyone and everything gets themoney they need to perform theirfunctions.

    To be able to re-allocate funds, decision-makers need to know up-to-dateinformation on the situation of resources,the services they fund, and the need forthat service. Research is about askingquestions to be able to answer some ofthese questions. In the area of healthresearch, it is important to find where thesick or needy people are, who they are,what kind of help they are currentlygetting, and how much more they need. Ahealth economist worries about howservices can provide adequate treatmentand services to the sick without runningout of time, money, or help.

    Economics and data can be very powerfulif used properly. Ms Beaver gave anexample about NT hospitals: their data onwhat they are doing, and what it costs,are currently so good that they can use itto easily request funding because they canshow what they’re going to do with themoney and back it up with data of theircurrent needs, the number of patientsthey see, the resources these patients use,and what these resources cost. The betterthe information or data available, themore informed and reliable decisions canbe made.

    Eight to nine years ago, however, beforethe use of health economics, NT hospitalsdid not have as much control orknowledge about their services. Ms Beavermentioned that decision-makers in the NTnever even thought to consider moneyissues when making decisions aboutservices. Changes in the government’sfunding policy, however, forced the THS totake a more economical view of theirspending. The new system determines theamount of money to be given to anyhealth institution based on how manypeople they treat, rather than a big roundamount regardless of their numbers ofpatients or services. As a result, the THSasked economists to help them thinkabout certain decisions and weigh upwhat might be the best way to useresources to achieve particular goals.

    In 1994, as part of this shift in focustowards an economic perspective,different workshops and seminars wereorganised to teach people a bit abouteconomics, the work that economists do,and how economists can support and helpdecision-makers take an economicperspective in the area of health.Currently, health economists in the THSare developing and testing new anddifferent models to find those that canserve the health services best.

    Professor Jon Altman (CAEPR): ‘Theestablishment of a corpus on Indigenouseconomic policy research: Lessons forIndigenous health research’

    Prof. Jon Altman’s paper looked at theestablishment of a collection of writings,or what he termed ‘corpus’, of Indigenouseconomic policy research at CAEPR andhighlighted some lessons from thisexperience for Indigenous health research.He argued that the CAEPR model for

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    generating a corpus on Indigenouseconomic policy research has been soundand that, at least structurally, such amodel could be transportable to theIndigenous health research arena. Heexplained that the CAEPR model isproclaimed on a partnership between theuniversity sector, the bureaucracy andIndigenous stakeholders, which makes itpotentially problematic. In conclusion, hehighlighted some tensions and trade-offs—some reconcilable, someirreconcilable—that all require constantmanagement.

    He started with a brief description ofCAEPR and its development since 1990. Hethen defined and described the CAEPRcorpus before focusing on a number ofissues mainly from the last five years.According to Prof. Altman, these issueswere central to the continued developmentof this corpus on Indigenous economicpolicy and were able to contribute to policydevelopment. He also briefly looked at thelessons that the CAEPR experience may beable to provide Indigenous healtheconomics research, highlighting somesimilarities and differences between thesetwo broad areas of research. Finally, hecited challenging issues faced by university-based researchers examining contemporaryand very complex Indigenous policy andapplied research issues.

    What are some of the features of CAEPR’sresearch that are manifest in its corpus,however defined? He explained that thereare five elements that have become thehallmark of CAEPR’s approach (andcorpus):

    • CAEPR research is independent,rigorous, often interdisciplinary and,whenever possible, empirically verified.

    • CAEPR research goals are long-term,yet also highly responsive to Indigenouspublic policy priorities: these require anappropriate trade-off between long-term research goals and short-termresponsiveness.

    • CAEPR research methods emphasisecommunity-based fieldwork andcollaboration whenever possible:community-based fieldwork andcollaboration and engagement with