Principal director highlights need for health innovation

The George Institute Principal Director Stephen MacMahon highlighted the need for smarter health spending, as he participated in a discussion held at the Australian Financial Review with Health Minister Peter Dutton.

The discussion centred on challenges around healthcare funding and the new medical research future fund.

“The George Institute has much to contribute to this debate,” said Professor MacMahon.

In the discussion, he emphasised the following points:

We need to be smarter about spending on healthcare and better identify waste:

Imaging for back pain costs $220M a year, of which no more than $20M is justifiable.

In addition, about 800,000 people are admitted every year for heart attack, with most discharged on treatment proven to prevent recurrence and early death by half. But after 12 months only 60% are still on their medication, with continuing declines thereafter.

Another way to spend smarter is making better use of routinely collected date - for example, using big data analytics and a single, shared electronic health record.

We need to strive for better health outcomes for all:

We need care innovations for the most vulnerable groups. Economic, ethnic or geographic disadvantage is associated with much greater use of public hospital services, and people in the lowest socio-economic groups suffer the greatest disease burden

Innovative programs are needed to care for older people, socio-economically disadvantaged people, people living in rural remote area and indigenous people - groups for whom Medicare co-payments are most likely to provide a financial barrier.

Innovation is also needed for improving the coverage, quality and integration of care, while controlling costs using:

  • Technology – a single electronic health record, clinical decision support, remote monitoring, continuous quality management
  • A greater role for non-physician healthcare workers, such as pharmacists, in primary healthcare

We need a stronger evidence base to inform healthcare reform:

A major focus of the medical research future fund should be to fund research on innovative strategies to improve healthcare quality while controlling costs. Large benefits could be achieved quickly if strategies were developed to improve delivery of treatments of known benefit. For example, improving care for patients with heart disease, which currently costs around $10B.

In addition, the amount of research funding directed to healthcare delivery investigations should be raised dramatically.

In 2013 the NHMRC budget total was $740M. The amount directed to basic laboratory research was $350M, or 47%, while the amount directed to research on healthcare delivery was $35M, or 4.7%.