Building a Sustainable Health System Productivity

Building a Sustainable Health System Productivity

On Thursday, 5 December 2013, the Australian Centre for Health Research (ACHR) hosted the first of a series of discussions on a sustainable health system. It brought together health practitioners, government representatives, industry leaders and consumer advocates in an open and constructive debate about health productivity. The workshop was held at NAB Health Boardroom at 151 Rathdowne Street, Carlton, Victoria. The following paper summarises the proceedings and key findings of the day.

Quantifying health outcomes in financial terms is fraught with difficulty, due to the intangible nature of some personal health outcomes and the convoluted nature of Australia’s fractured health system. However, improving productivity in health care is not only possible, but a priority, given the ballooning budgets caused by increasing expectations and an ageing population. Greater productivity is not only consistent with improved standards of health, but is becoming a prerequisite.

The market solutions which have successfully revitalised other moribund or underperforming industries are less applicable to Australia’s health system for a range of seemingly intractable structural reasons. However, increasing consumer information and introducing price signals where possible can only make the system more agile, rational and responsive to patient needs.

The setting of national prices as part of activity-based funding by the Independent Hospital Pricing Authority will force overspending states, such as Queensland and Western Australia, to reduce their health budgets. Growth in the National Efficient Price is set to decline sharply in future years.

The use of ‘market quality frameworks’ as pioneered by the Capital Markets Cooperative Research Centre shows promise in improving the dissemination and understanding of data across stakeholder silos, reducing financial fraud and waste and, in the longer term, improving clinical efficiency and consumer choice.

Reform is hampered by a lack of designated funding for new measures, the opposition of entrenched and powerful vested interests which profit from existing clinical and financial procedures, and a lack of incentives to embrace change. The publishing and promotion of clinical ‘do not do’ lists for common or expensive procedures with no proven health benefit should be accompanied by a shift in funding to alternative and more effective clinical procedures.

Given the difficulty of creating a true free market in health, the less glamorous work of driving improvements project by project, procedure by procedure, institution by institution can still offer concrete gains. A central clearing house where best clinical and administrative practice can be shared should be created. Clear incentives for professionals to adopt such measures must be introduced. Empowering patients to play a greater role in their own health care by offering such information would create informed consumers better able to choose the best services and practitioners available to them.