Health Care Priority Setting Strategy for Australia: HSH762

This report addresses the critical issue of health care priority setting in Australia, examining the potential introduction of an independent agency to manage resource allocation. It explores the necessity of community involvement in defining ethical values and principles to guide healthcare decisions, ensuring transparency and social justice. The report outlines the values and principles that should underlie priority setting, including benefit/effectiveness, value-for-money, fairness, and consistency with community values. It further details the key context issues for priority setting, such as macro, meso, and micro levels of decision-making, and the interplay between explicit and implicit approaches, technical versus due process approaches, and the role of judgment in decision-making. The report emphasizes the importance of cost-effectiveness analysis and the potential of the Oregon approach to expand health insurance coverage. Ultimately, the report advocates for a combined approach, integrating both technical and due process elements to achieve efficient, equitable, and democratic health services within Australia.

Resource Allocation and Priority
Setting

Table of Contents
Part A.........................................................................................................................................3
Part B..........................................................................................................................................4
Part C..........................................................................................................................................5
Part D.........................................................................................................................................6
References................................................................................................................................10

Part A
All the countries make efforts to achieve the Universal Health Coverage (UHC) and it
becomes challenging for the policymakers to efficiently allocate resources to meet increasing
demands of people for health services (Otim et al., 2014). In various low- and middle-income
countries, priority setting is essential and all the important decisions related to the priority
setting are done with non-transparency. However, high-income country like Australia, such
macro-level decisions related to the availability of funds for healthcare sector and how it
should be distributed all over the region, are taken by the government (Wong et al., 2018). In
Australia, it includes the involvement of both the Federal as well as State and territorial levels
of government. It is also associated with complex procedures of funding and regulation of the
healthcare sector. The programs like Medicare in Australia ensure that needful person can
have access to healthcare services even if they do not have sufficient resources to purchase
them. Australia utilizes its disease burden data to prioritize health services delivery
effectively (Glassman et al., 2012). The national efforts in support of explicit priority setting
in health involve three things, which include essential lists of medicines, health benefit plans,
and health technology assessment agencies. Through these three criteria, economic evaluation
is done. The implementation of seven core processes of priority setting if implemented under
legal as well as institutional framework can improve health outcomes for desired health
expenditure considering the management of political, commercial, and interests of donors in a
fair and effective manner. However, the health of indigenous Australians is not good as other
Australians. To improve the poor health outcomes, the priority setting process should be
improved to ensure transparency in the process of healthcare (Otim et al., 2014).
In Australia, most of the indigenous healthcare services are funded by the government and
are provided in two ways i.e. through universally available healthcare services, referred as
mainstream services and through other services that are especially targeting indigenous

Australians because of access issues being experienced by them, known as “Indigenous-
specific health care services”. The services provided by the non-government organizations
are accessible to the indigenous community. The major challenge is to utilize explicit priority
setting to improve health outcomes for indigenous population of Australia.
In Australia, the introduction of an independent agency to undertake priority-setting in
healthcare would be beneficial, because the process of taking decisions related to the
healthcare facilities and funding takes a long duration (Glassman et al., 2012). Although, the
procedure is highly transparent, but it takes a long duration when the decisions are taken at
macro level and then at micro level. The decisions related to the healthcare establishments
related facilities and decisions related to the availability of the health benefits to the
Australians as well as to indigenous people of Australia can be taken effectively (Wong et al.,
2018). With the introduction of separate agency to take decisions related to priority settings
in Australia, the process will be speedy and all the procedures and related decisions could be
taken easily within no time.
Part B
With the introduction of independent priority-setting agency in the country, the decisions of
the community should essentially be taken into consideration because welfare of general
public could only be made by including the participation of all in the procedures. The
members from the community should be selected to prioritize what ethical principles should
guide the allocation of resources and priority-setting in the healthcare (Mossialos & King,
2012). The involvement of members from community will not only make health authorities in
publicly funded healthcare system answerable to the consumers but also transparency could
be maintained (Norheim et al., 2014). The engagement of community members is strongly
associated with social justice, better healthcare services and health outcomes. Various factors

influencing the involvement of public in the process of decision-making regarding resource
allocation and priority-setting include age factor i.e. significant position due to years of
research, size of family and gender of the public engaged in such important decisions. Other
factors that also influence priority setting include lifestyle of people, their contribution in
causing disease, severity of diseases, cost of treatment, family responsibilities of the patients
and many more (Cookson & Dolan, 2011). So, the inclusion of the community members in
relation to the resource allocation will develop transparency in the procedure and also,
demands and requirements of the people could be identified. The participation of public in
the process could result in wider acceptance for the transparent healthcare system especially
in the process of ethical principles to be included in the process of resource allocation
(Farmakas et al., 2017).
Part C
As per the survey conducted by the National Health Commission, the criteria suggested by
community underlying priority setting in Australia should include;
 Benefit or effectiveness of the services;
 Value-for-money i.e. effectiveness of service to validate the cost;
 Fairness in access and use of public resources i.e. best way to utilize public resources;
 Consistency with community values
It has been suggested by the committee that all these principles should reinforce all the policy
advice as well as healthcare purchase decisions and should have practical impact so that the
resources could be available to the needful. These principles have been established on the
basis of individual benefit criterion and are concerned with availability of the funding of the
particular service for individuals on the basis of their requirements (Yoshida, 2016).

The processes to be utilized for prioritizing publicly funded services as suggested by the
community include;
 Inevitable rationing of health services;
 Transparent processes for making rationing decisions;
 Involvement of communities and their values in rationing decisions i.e. some will be
denied access to services; and
 Transparent tools such as guidelines and priority criteria to help the decisions (Liss,
2016)
These principles and procedures suggest that it is the responsibility of the healthcare facility
to utilize its resources in an effective manner so as to provide best possible benefits to the
needy people (Barasa et al., 2015). The allocation of resources in priority setting in line to
ethical principles enhances reliance of general public on healthcare facilities.
Part D
The new agency should carry out its tasks considering the key context issues for priority-
setting, which include;
Context (macro and/or meso and/or micro)
The level of decision-making affects the choices to be made regarding the process of decision
as well as in the process of economic evaluation of the individual interventions. In priority
setting, the important aspect is to include suitable protocol for evaluation regarding a number
of intervention decisions (Mitton & Donaldson, 2012). At macro level, the decisions are
taken by politicians related to the availability of funds for allocation in health sector as well
as regarding its distribution in various regions. The federal and state level government take
decisions regarding the budgets. The expenditure on health-related services and assisting
these operations effectively is the responsibility of the government (Glassman et al., 2012).

The priority-setting approach is based on bargaining and is largely implicit but, the explicit
outcomes include budgeting, benefits and eligible providers and many more (Liss, 2016). The
technical models of priority-setting possess minor role at macro level.
At meso level, the decisions related to resource allocation will be taken by the intermediary
bodies, which will include health authorities of community and major healthcare institutions
of the region. The managers and administrators take decisions and explicit technical
approaches in support of economists are considered as highly applicable. In this sequence,
local institutions can assess health requirements of people, who could then respond in an
effective and equitable manner. At micro level, those responsible for providing services to the
people at individual level take decisions related to availability of services from the resources
available. For example, clinicians decide the type of treatment for the patients and which
patients should receive treatment (Carter, 2012). This process of rationing can be utilized to
control the costs indirectly such as in reducing the intensity of services and if services are
required or not. So, the healthcare providers can act as utilization reviewers and conduct
rationing to make the services available to the required and unnecessary wastage of resources
and its allocation could be controlled in this manner. So, the healthcare process should
include all three stages for the purpose of decision taking with regard to the best availability
of services to the needy people (Barasa et al., 2015).
Explicit or implicit approach or a combination
As explicit approach regarding priority setting are usually politically unacceptable, they are
not considered as effective despite being based on strong economic evidence. Considering
political and clinical reality, implicit rationing is considered as comfortable and is more
beneficial for reduced levels of conflict. As victims are visible, rationing of care should be
considered to be in an effective manner. So, at the patient-physician level, implicit rationing
is considered as more acceptable (Barasa et al., 2015). At the same time, basic principle of

economic evaluation is to make explicit the alternatives that might be available in the context
of any decision, along with their costs and outcomes. In such a situation, implicit priority
setting results in inefficiency and inequity. Taking into consideration, different benefits of
both the approaches, the combination of both the approaches should be utilized (Mitton &
Donaldson, 2012).
Technical or a due process approach or a combination; (if technical where will the data
come from)
The combination of both technical as well as due process approach will be taken into
consideration. For priority-setting in explicit manner, systematic approach is utilized. The
positioning of alternatives on the basis of value judgements or technical regulations is highly
proposed by the health economists and clinicians for the purpose of pursuing goal of
efficiency and need-based equity. It is possible to provide definitive answers to priority issues
so technical approach considers the utilization of economic evaluations. The values or moral
guidelines will be taken into consideration instead of strictly technical approach (McDonald
& Ollerenshaw, 2011). It will provide fairness in taking decisions regarding who to be
provided with the services and who should be excluded. By the utilization of specific set of
rules and principles, judgement could be made to provide the basis for decision-making
related to the allocation of resources and benefits provided to the people. Similarly,
legitimacy in the overall process could be obtained through due process. That is why, the
combination of both the processes will be taken into consideration.
Role of judgement
The role of judgement is also significant as, in priority setting, explicit rationing at all levels
require involvement of both techniques and judgement. The judgement of medical
practitioners and participation of public in decision-making is prioritized. Due to democratic

ethics, the involvement of health authorities and values of community enhances availability
of services to the people (Viergever et al., 2010).
Cost-effectiveness
The cost-effectiveness analysis (CEA) is based on the concept that decision-makers should
meet the requirements of the needy people and pursue technical and productive efficiency
along with support from extra-welfarist as well as decision-making framework. The cost-
effectiveness ratio is used where, effectiveness is measured as a one-dimensional health
effect. However, CEA that could not address allocative efficiency in the form of the output
interventions is not considered significant. The frequency with which CEA is undertaken in
the health sector suggests that treatment or prevention objective should not be considered
directly and the outcome measure could be accepted as substitution to the benefits of
interventions that are being assessed (Rudan et al., 2010).
As vertical priority setting is taken into consideration, the Oregon approach will also be
beneficial. It is considered as a solution to increase the health insurance coverage to the
individuals, who remain uncovered due to any reasons. Such people could be covered under
medical insurance coverage through the federal Medicaid system or through any private
systems while they remain associated within the fixed budget and incorporate public values
(Tomlinson et al., 2011). This approach also follows cost-effectiveness strategy so that more
and more people could be provided with the required healthcare facilities within the available
resources. In this way, priority setting will be established considering all these strategies.
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