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Now is the time to invest in healthier lives

Media release: 
12/08/2015

More than 30 healthcare experts and community representatives have issued a report calling for immediate changes to the way Australia’s healthcare system is funded.

Professor Vlado Perkovic, Executive Director of The George Institute for Global Health Australia and the University of Sydney, said Investing in healthier lives: Pathways to healthcare financing reform in Australia was compiled following a roundtable workshop, and made seven recommendations.

“The healthcare system works well for many people, but there are growing issues, especially around funding, that must be addressed to ensure it is sustainable for the next 20 years,” Prof Perkovic said.

“Australian Treasury figures show that total health and aged care spending will be 33% of all government expenditure by 2050.

“We also know that in 2013, 14% of people did not visit a doctor because of the cost, a figure which grows to 24% for someone with chronic disease.

“The public is more aware than ever of the known pressure points, such as waiting lists, but consumers are facing a healthcare system that is fragmented, complex and increasingly unaffordable.

“Much of the talk to date has been on lifting the GST or raising the Medicare Levy, but this discussion only addresses the quantity of healthcare rather than its quality and effectiveness.

“The need for change is no longer in question; rather how, when and what to?”

Professor Stephen Jan, Head of Health Economics at The George Institute and the University of Sydney, said there were many views on this topic and last week’s roundtable brought key leaders in the field together.

“Our aim was to reach a broad consensus from stakeholders including the community, patients, providers and funders and to launch what will hopefully be a continuing Australian conversation,” Prof Jan said.

The Investing in healthier lives report made the following recommendations.

  1. There is an urgent need for reform to health funding to ensure high quality, effective and efficient healthcare.
  2. While the eventual goal of reform is whole-of-system improvements, a priority for immediate reform needs to be people with chronic and complex conditions, and those who are significantly disadvantaged in access and/or outcomes.
  3. A blended payment system is needed, adding to the current fee-for-service models a broader range of capitation-based payments promoting patient-centred care. In addition, the role of performance based payments should be explored*. This type of system will enable co-ordinated management of people with long term and chronic conditions, create the right incentives for patient-centred care and address some of the current drivers of unnecessary cost escalation, whilst preserving elements of the current system that work well.
  4. Investment in change management is critical. This means ensuring that no groups are significantly disadvantaged by these reforms and all stakeholders are adequately informed and equipped for such change. Of course this costs money. Funding for this could be channelled from savings from other areas such as those that will result from the current Medicare review.
  5. Any shift to new funding models must encourage the strengthening of links between healthcare providers.
  6. The proposed changes to funding models will require more data to be collected on a routine basis and therefore improvements are needed in existing health IT infrastructure.
  7. Now is the time to move from conversation to action, but it requires careful planning, extensive discussion and consultation and a staged approach.

Professor Perkovic said the conversation around the sustainability of Australia’s healthcare system was critically important.

“The discussion has been controversial at times, but it appears that all sides of politics are now looking for long-term solutions,” he said.

“We urge the government to act quickly, but act for the future and avoid the temptation to implement band-aid solutions that look good in the short term, but would then require further reform.”

Download the Investing in healthier lives: Pathways to healthcare financing reform in Australia report (PDF 1.4MB)