Pathways to move forward – FOHS Plenary 4 report

In the previous Plenary sessions of the 2019 Future of Health Seminar, the audience heard about “what is healthcare”, “the near future of healthcare” and “far future of healthcare”. Plenary 4 focused on the “pathways to move forward” in creating a sustainable future of healthcare in Australia.

The guest speakers in this session, Tony Coleman (Chairman, Macquarie University for the Health Economy), Natalie Kelly (Divisional General Manager, Provider Commercials and Operations, Medibank) and Hon John Hill (Independent Chair, Private Health Australia), who provided their perspective and insights on this topic.

The current challenges in healthcare

The interesting thing about health all around the world is that you can have grand idea about the system that we could create but you have to start where you are,” facilitator Alan Merten began.

The “Productivity Commission 2015 report “Efficiency in Health” had identified a number of challenges in the Australian healthcare system: growing health expenditure, wasteful spending, substandard quality and safety concerns, increasing out-of-pocket payments, reduced access to health care and unsustainable financing.

International healthcare trends

These healthcare system challenges are not unique to Australia. Natalie highlighted some international healthcare trends could help address the current healthcare challenges.

  • Healthcare consumerism and digital healthcare – utilisation of new technology and digital tools to manage customers’ health better and reduce cost in the system
  • New value-based funding models – moving from a fee for service model to value based funding modes to deliver better results, reduce costs and drive innovation by providers. We are seeing an increasing number of providers overseas are willing to accept payment based on the value they deliver based on outcomes.
  • Data analytics as a competitive advantage – utilisation of data, analytics and insights to improve performance in healthcare sector and engage customers.

Role of a private health insurer in Australia

“When I was health minister, I used to monitor the number of citizens with PHI because I knew that if the number of people with PHI dropped the greater the pressure would be in our public hospitals” said John.

Private health insurance has an important role in Australia’s healthcare system currently and in the future. Approximately 13.6m Australians had some form of private health insurance as at Jun-19 which is reducing the burden in public hospitals and is an efficient way of funding non-emergency surgery, in-hospital mental health care, dental and other community-based allied health care.

  • Medical device reform – bring prices in line with international prices
  • Gaming by state hospitals – cost-shifting from state hospitals
  • Out of pocket expenses – increase transparency
  • Encouraging youth participation in private health insurance
  • Care in the right setting – remove red tape to fund out of hospital care


Specific examples of pathway forward

Preventative health

Tony presented Discovery (South African) as an example of how a health insurance has successfully reduced chronic illnesses and claims costs using wellbeing programs that rewards customers for better life choices.

In Australia, however, the current PHI regulations limits what insurers can do it this space. Tony believes that “we should be actively looking at ways in which we might increase the flexibility of the current community rating system”.

Information transparency

Improving information transparency can help reduce out of pocket costs and reduce wastage. Medibank has introduced a number of tools, such as the “Procedure Cost Estimator”, “Find a Provider” and “Patient Reported Experience Measure” to provide more information to customers on cost and quality of providers; and sharing the results of the “Surgical Variance Reports” with providers to allow them to see how they compare to peers which in turn will drive changes in providers and improve efficiency.

Alternative health care

Development of alternative care models to offer choice to patients, get more affordable care and improve patient experience. Natalie showed us that Medibank is currently partnering with Nexus and doctors to trial hip and knee replacements early dischargement to home care where clinically appropriate.

What did the audience think?

The plenary ended with a poll of the audience who were asked for their views on this topic.

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Key highlights include:

  • 80% of respondents thought private insurers have an active role in improving the health of policyholders and 50% thought insurers have a role in ensuring access to best medical services and that the service is appropriate and best practice. Only 19.5% of respondents thought insurer’s role is a passive payer of claims.
  • Around 95% of respondents believes that a successful private health insurer will be able to encourage policyholders to lead healthier lives (e.g. diet, exercise, stress management). ‘Co-ordinates all care of policyholders’, ‘provides advice on treatment option’ and ‘provides alternative models of care’ also had very strong responses.
  • The audience generally agree that all parties can do more and work together to deliver better outcomes. However, many believe that the federal government has the real power to instigate change.
  • The key reforms needed to address affordability and drive innovation identified were ‘disclosure of out of pockets’ (34%), ‘consolidate national health & wellbeing funding’ (26%), ‘prospective risk equalisation’ (24%) and ‘introduce value-based contracting’ (21%).


Read more

See a summary of the Plenary sessions written by Brendan Pon, Lulu Wang, Nora Lam and Zachary Tirrell

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