Options for finance in primary care in Australia

Abstract

A number of policy initiatives aimed at reform of primary health care financing are currently either being debated nationally, or trialled in different jurisdictions. Commonwealth Government austerity and an interest from a wide range of stakeholders to mobilise capital from different parts of the economy have provided an incentive to explore new finance policy options for primary health care. However, recent reviews of primary health care finance have focused on contrasting the different payment systems, rather than the financing of primary health care in a more systemic sense. Finance is more than just an approach to payment, reflecting the flows of capital that structure service. Debates centred on payment systems (such as fee-for-service, salaries, capitation, pay for performance and activity–based funding) tend to eclipse the conceptual underpinnings of primary health care finance. This issues brief explores policy options that move beyond payment systems. It approaches primary health care from a deeper perspective with a focus on how to link objectives to outcomes through different financing approaches. For example, the separation of primary health care payment systems (mostly fee for service) from hospital payment systems (activity-based funding) creates numerous boundaries between parts of the sector. Although different payment systems separate health care into discrete segments, the lived reality for many people managing their health care is that they need to move across these fragmented elements of the system, with little overall sense of outcome. This issues brief will identify ways to consider primary health care finance policy options, by focusing on the objectives of different financing systems, how they connect to financial tools (such as impact investing), with a focus on health outcomes. It aims to broaden and deepen debate about primary health care finance. It is anticipated that the issues brief will also be a starting point for a structured debate through policy engagement events between policy makers, academics and practitioners about new models of finance for primary health.