Media releases

March 17, 2014

Chronically ill need whole of life health system

A new approach for the 3 per cent of patients who account for 40 per cent of the health budget will ensure they get the care they need.

Our current health system is not sustainable. Heard that before? Ambulances queued up outside emergency departments, long waiting lists for elective surgery and poor outcomes from hospitalisation blamed on underfunding and resource constraints.

Today's health system woes are certainly intimidating but they are not insurmountable. I believe there are some immediate steps we could put in place that would enable better health for all Australians and lay the foundations for a more sustainable health system.

Firstly, we need to set up a system to provide help and support to those with chronic illness and complex health issues to help them co-ordinate and connect their health services and to be aware of the best healthcare options available.

Currently, medical providers are funded on a fee-for-service basis with no obligation by the doctor or patient to commit to a longitudinal relationship or health and wellness oversight We have the choice of more than 20,000 general practitioners (GPs), plus a range of other medical and alternative therapy providers we can see across Australia.

I call this "random care" - consumers choose where they go and the treatment they receive depends on who they see and the path they take. But Medibank research has shown those battling chronic illnesses and complex health issues often feel confused and distressed by the range of options and find it difficult navigating their way through the health system. They and their carers are often unaware of the health services and programs available to them.

Our research shows these high-need patients would like a program or organisation that could help them "join the dots" and provide them with a holistic understanding of their health. Such a program would mean they would enjoy better treatment continuity, which would lead to better health outcomes with lower exposure to acute care costs, and this in turn would stop wasted funding, which is a by-product of "random care".

For those high-need patients, we should move away from the "fee for service" approach and look at a payment per capita that encourages practitioners to work together and focus on the patient health outcome.

At Medibank, we have begun to fund and operate health services like this where care is coordinated and connected, such as the health services we operate for Australia's Defence Forces, or our trial with some general practices that supports Medibank members to gain fast access to a GP when they have health concerns, and the integrated care pilot we are running for two state government health departments to support public and private patients battling chronic illnesses and complex health issues.

Currently, 3 per cent of Australians consume nearly 40 per cent of our health budget Health reform needs to focus on looking after these people and helping them to "join the dots".

Secondly, in an environment where most people are experiencing "random" healthcare, we need to provide the certainty of outcomes in our health system that we take for granted in other sectors such as manufacturing and technology.

It is essential that doctors and medical providers are responsible for managing the healthcare of their patients and that patients have choice as to which doctor they see. However, there can be vast differences in the quality and cost of healthcare that we receive.

The recent Grattan Institute report, "Controlling costly care: a billion-dollar hospital opportunity", revealed a vast gulf between treatments in high- and low-cost hospitals, with no reason for such variation. The report cited examples such as the difference in the cost of a common gall bladder treatment between the highest and lowest cost hospitals of more than $4000, and the difference in the cost of a hip replacement of more than $16,000.

It can be argued that these variances also lead to significant wastage. Up to a third of healthcare spending in the United States is said to be wasted, and there is no reason to suppose it is any different in Australia.

Knowing best performance outcomes means medical providers can learn from one another to develop best practice, and funding can be designed to reward best practice, thereby further reducing wastage.

- George Savvides, Managing Director of Medibank

This opinion article appeared in the Australian Financial Review on 17 March 2014.

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