Media & Speeches

No Time For The Meek As Health Budgets Blow Out

This opinion article by Rohan Mead, group managing director of Australian Unity and chairman of the Business Council's Healthy Australia Taskforce, was published in The Australian on 9 February 2017.

Just days into their new roles, it may already be dawning on new federal Health Minister Greg Hunt and even newer NSW Health Minister Brad Hazzard that they (together with other state health ministers) carry much of the responsibility for ­sec­uring Australia’s broader econ­omic future.

The health sector costs about $160 billion a year, about 10 per cent of GDP. That proportion continues to rise as the population ages, lives with more chronic disease and invests more of its money in health.

With this in mind, Hunt and Hazzard have a critical job to do in formulating a long-term prescription for effectively reshaping health expenditures while ensuring strong health outcomes for the community. They have no time to be daunted by the dimensions of the challenge.

They begin behind the eight ball. Australia’s health system is, put simply, no longer fit for purpose. It remains shackled to a 200-year history of acute and episodic treatment rather than reshaped for the 21st-century drivers of demand, including unprecedented growth in the number of older people living with multiple chronic conditions.

It is fundamentally driven by producer interests (acute hospitals, clinicians and state health systems), which are structurally, operationally and psychologically ill-equipped to reorienting the sector around consumers — just at the time when those consumers’ changing and growing needs demand such a reorientation.

We romanticise the historical picture of the sector — having a personal GP, readily available specialist care, selfless and skilled staff at acute hospitals and more. The present-day reality is less attractive — six-minute consultation with the GP, long waiting lists for specialists, waiting lists for hospitals that are too often overburdened, financially precarious, prone to error and, ironically, wasteful because of the role in which they are cast.

The Productivity Commission has suggested “the efficiency of the health sector could be increased by up to 20 per cent by bringing performance up to best practice across a range of areas”.

And Bruce Robinson, who headed the federal government’s medical benefits scheme review taskforce, says it “has been estimated that 30 per cent or more of health expenditure is wasted on services, tests and procedures that provide no or negligible clinical benefit, and in some cases might be unsafe and could actually cause harm to patients”.

The public is also sensing things don’t add up. Australian Unity recently asked members to share their experience of waste in the healthcare system. Hundreds did so. Many were concerned, for example, that GPs ordered tests, then booked another appointment with the patient to tell them all was well. While this might be rationalised clinically, the overwhelming sense of these consumers was that this practice was principally about securing another Medicare payment.

So where should the new ministers start? Not where governments tend to default to, which is taxation. Any revenue solution to the rising costs of healthcare, such as a higher GST or a bigger Medicare levy is likely to be absorbed, like aspirin, into the system, simply masking the source of the pain. But how effectively is the money being spent?

They should start by prioritising measurement and transpar­ency of data in the health sector as a conduit to efficiency. Information transparency is vital to the appropriate governance of the system. Patients have little or no access to clinician or hospital outcomes, either in terms of cost or performance. And at a government level, Australia measures up poorly against other developed nations in ensuring performance data is publicly available.

A policy push for measurement and transparency is far from a meek approach. Elements of the healthcare sector are extremely wary about making data public. There are various, well-worn and largely paternalistic arguments from the sector in this regard, often suggesting that the data could be wrongly interpreted if consumers were able to see it.

This is a fundamentally wrong approach. What about this alternative: that all data should be made transparently available? The sector’s job would then be to develop ways for the data to be afely managed and interpreted.

Some important work is being done in this area, in particular the Atlas of Health Care Variationproduced in late 2015 by the Australian Commission on Safety and Quality in Health Care. So many questions are raised by its findings. Why are women in regional Australia five times more likely to undergo a hysterectomy than women in metropolitan areas? Why was the number of prescriptions per 100,000 people for ADHD drugs 75 times higher in some areas of Australia compared with others?

Measurement and public transparency of health data, both at an institutional and individual level, is one of the most effective pathways to long-term healthcare effectiveness. But more importantly, it would help the policy considerations to move on from the hectic standstill that has been their defining characteristic for the past several decades.

Hunt and Hazzard would be serving the Australian community soundly by making this a policy priority.

Rohan Mead is group managing director of Australian Unity and chairman of the Business Council of Australia’s Healthy Australia Taskforce.