As our faltering health system wobbles on in deep distress, under poor and inept management, JON STANHOPE & KHALID AHMED prescribe a look at the acclaimed Oregon Plan, which held legislators directly accountable when things went wrong.

“The physician should not be placed in the position of defending a public policy that is more interested in saving money than in providing medically necessary services.”

No; this is not a quote from one of the six orthopedic surgeons or the two anaesthetists who have recently abandoned Canberra’s public hospital system, or any of the clinicians still in the system who worry that their patients’ care is compromised by a lack of funding.

The quote is from a 1992 paper by a practising doctor and ethicist John La Puma about a plan to ration healthcare services in the US state of Oregon. 

The Oregon Plan, which was developed following the death of a young boy who was waiting for a bone marrow transplant, was the subject of intense debate in the US and attracted worldwide attention.

The Oregon Plan and the Oregon planning process are from a reasonably distant past. The Australian healthcare system is also very different from that of the US. So why focus on the events of the 1980s and 1990s in a different health system?

The challenges faced by the Oregon legislators remain as relevant today as then for any government committed to delivering healthcare equitably.

In general, with the universal hospital coverage that exists in Australia, the public costs of healthcare have been rising faster than the combined effects of changes in the Consumer Price Index (CPI) and population growth. 

A combination of three factors drive these higher budgetary costs: (a) improvements in technology and skills; (b) ageing of the population; and (c) excess inflation in the health sector. 

In a continually changing environment, realising and directing technical efficiencies also requires investment in infrastructure and the engagement of clinicians.

Broadly, the Oregon Plan sought to prioritise services based on efficacy, increase the coverage of services and provide additional revenue (through a tax on tobacco) to maintain and expand services. 

While their practical implementation may vary across systems, prioritisation, coverage and growth funding remain the key elements for the successful management of any health system. More importantly, how the Oregon Plan was developed remains a reference for policy analysts and commentators more than three decades later, even for those who may disagree with any aspect of it. 

It is remarkable that the death of a seven-year-old boy denied access to a lifesaving procedure resulted in an honest, soul-searching and sincere effort by politicians and legislators to address the serious questions of equity and inequity in the allocation of healthcare and resources.

There was meaningful engagement with the community, with the discussion led by a commission that took advice from experts and consulted with the community. The commission produced a prioritised list of services, for the first time anywhere in the world. It employed analytical tools such as quality adjusted life years as well as clinical judgements and inputs to determine the efficacy of procedures.

There was transparency and rigour in the development of the plan as well as its implementation. Even those who did not support “rationing” of healthcare as a principle, acknowledged that rationing, which was happening covertly, at least became transparent.

Notably, accountability was shifted from obscure bureaucrats to legislators, so that, as noted by researchers at the American Medical Association some two decades later, “when the next life-or-death case came around, legislators would be held accountable”.

The Oregon story does not end there. The plan fizzled out in the early 2000s, necessitating further reform, but nevertheless delivered some key insights. Those who conceived the plan did not realise how readily future governments would cut health in times of budget crunch. 

Coverage of the program dwindled with people opting out as co-payments were introduced without a realisation that people on low incomes were extremely price sensitive in accessing healthcare. The lesson: blind budget cuts and the imposition of private costs are false economies and adversely affect the very people who most need help.

While we are not proposing adoption of the Oregon Plan, we believe the template remains relevant for any government, most particularly, for the ACT government, for managing its healthcare system. 

The template was in fact adopted and is clearly evident in the 2008 ACT Capital Asset Development Plan (CADP) by the then health minister, Katy Gallagher. That plan included a detailed analysis of the ACT’s health needs over the coming decades and engaged clinicians in developing models of care and program investments.

Regrettably and inexplicably the CAPD was abandoned when Andrew Barr assumed the chief ministership and the ACT now has the worst wait times in the emergency department, patients waiting for years for surgery, sentinel events and avoidable deaths, a complete lack of responsibility with minister(s) blaming public servants and public servants blaming the system or the clinicians, unanticipated budget shortfalls, patients with worrying symptoms that should not be ignored being advised to stay away, patients turning away for financial or cultural safety reasons, and most recently clinicians disengaging and walking out.

These are all deeply disturbing symptoms of a system not just in distress but under poor and clearly inept management.

Is it too much to expect the ACT government to adopt some of the 1980s thinking of the State of Oregon?

Jon Stanhope is a former chief minister of the ACT and Dr Khalid Ahmed a former senior ACT Treasury official.