Health system design requires braver leadership

14 Mar 2018

I thought I would share a few thoughts following the AICD Australia Governance Summit in Melbourne last week as they reflect on the national healthcare system.

There is instability in the private health insurance sector, with some calling for a rationalisation of the sector. HBF and HCF have signed a Heads of Agreement to merge and others such as a Bupa are foreshadowing some fundamental changes to their business model. The role of the sector and the nature of its contribution to the whole healthcare system is under review.

There are carillon calls to curb the costs of the Commonwealth and State components of public healthcare. Such calls are often accompanied with the claim that healthcare is, or is becoming, unaffordable. Maybe. But OECD comparisons of Australia’s cost to benefit equation of healthcare, almost no matter which way you look at it, says we can afford more costs. This argument is a distraction from the more important question – are we getting good value for money from the costs of healthcare.

It is possible to create a big pile of examples of where we are not. Just a few examples include some non-evidence based surgical procedures; excessive costs of some procedures where fees for service are extravagant; mountains of wasted medications; futile end of life treatments; and a very strange primary care sector where doctors train for 5-6 years to excel at 10-minute consultations!!

None of this is new. But a very good point was made at the summit – Don’t rely on good government policy to make at least some of the right changes to business design. And don’t think you need to do it on your own.

Where good government policy exists take advantage of it. But Australian business, public and private, has become used to politics prevailing over policy, especially at the Federal level, for many years now. In the absence of good government policy, and even the ability of Federal administration to partner effectively with many sectors of the economy, it behoves us in the healthcare sector to be more open minded and progressive in the partnerships we create to drive improved efficiency and a better consumer experience of healthcare.

We need to be braver and find more novel methods to finance and manage risk. We need to be much more agnostic about the sub sectors of the healthcare system and think much more creatively about partnerships, and for these partnerships to extend to other entities such as finance institutions. There is a very strong argument that the subsectors must unify more to supply the innovation required in the health system and even lead the development of better public healthcare policy.