Why we need to focus on the business of health
Australia spends around $181 billion on healthcare, or $7400 per person a year, according to the latest Australian Institute of Health and Welfare report, and the health sector employs more than one in eight Australian workers, so health is big business.
“The health sector generates an enormous amount of economic activity, and improves health outcomes for all Australians,” said Professor Rosalie Viney, Director of the UTS Centre for Health Economics Research and Evaluation (CHERE), at a recent ‘Business of Health’ panel discussion.
The event, hosted by UTS Business School, brought together experts from academia, health and government to discuss ways to improve healthcare delivery and outcomes, as well as incentives and impediments to investing in the health sector.
Moderated by UTS Distinguished Professor Jane Hall, panelists included UTS Professor Rosalie Viney; Mr Andrew Wiltshire, Senior Director, Medtronic; UTS Adjunct Professor Paul Thorley; UTS Associate Professor Prabhu Sivabalan and Mr Shane Solomon, Chair, Independent Hospital Pricing Authority.
Recent examples of successful health outcomes include improved treatment for Hepatitis C and the declaration by the World Health Organisation that Australia has eliminated Rubella, a disease that can cause miscarriage and serious birth defects, through the national immunisation program.
However along with the successes there are also challenges, said Professor Viney. Given two thirds of healthcare funding comes from state and federal governments, the distribution of public and private spending is a particular issue.
“Out-of-pocket costs in Australia are increasing and they are some of the highest in the OECD. That is a major issue because it means there are people who will put off going to the GP or having their prescriptions filled,” said Professor Viney.
“That inequality also translates into inequality in disease prevalence. Chronic diseases are much higher in lower socioeconomic groups – there is twice the prevalence of diabetes and heart disease compared to the highest socioeconomic groups.
"The universal health care that we treasure isn’t necessarily as universal as we would like it to be,” she said.
UTS Management Accounting Professor Prabhu Sivabalan is currently working with NSW Health – examining how big data can be used to motivate and support better resource allocation and improve how the $20 billion NSW healthcare budget is spent.
“In our research group we are passionate about looking at the data, and making sense of it, in ways that people working on the frontline of healthcare are not able to do,” said Professor Sivabalan.
“Data can reveal whether a particular hospital is paying a higher price for an item compared to other hospitals – whereas individual decision makers may not have that information.
"We also need to make a case for the value of prevention – and price that into our economic models,” he said.
Andrew Wiltshire, Senior Director of Market Access, Public Affairs & Policy at Medtronic – a global leader in medical technology, services, and solutions – highlighted the need for consumer-centred healthcare – where the goals of treatment are focused on what is important to the patient.
“We need to understand what outcomes are important to end-users of the healthcare system and then drive the incentives for health around delivering those outcomes,” Mr Wiltshire said.
Greenwich Capital Partners Senior Director and UTS Adjunct Professor Paul Thorley argued for a complete relook at the way healthcare is delivered, to focus on preventative rather than “illness-centric” health.
“When you look at outcomes from investing in prevention, evidence from the CSIRO reveals there are huge benefits to quality of life, as well as longevity,” said Adjunct Professor Thorley.
Shane Solomon, Chair, Independent Hospital Pricing Authority, also highlighted the need for consumer-centred health, particularly around end-of-life care, and noted that healthcare is not a normal market.
“Normal market principles don’t really operate, mostly because the potential for demand, whether it be more tests or other procedures, is almost unlimited. A pure business approach will just create more market demand that has limited value,” he said.
Panel Moderator, Distinguished Professor Jane Hall, said while unregulated business might not be good for health as we can end up paying too much for services, business is essential to bring innovation to the health sector.
“We would not get innovation that delivers new technology, and better health outcomes, without the incentives that business provides, so business is not just good for health, it is essential for health,” Professor Hall said.
UTS Business School research and engagement in the health sector covers the spectrum of health from prevention to end of life care, health care utilisation and funding, demand and supply of health care, quality of life and consumer and provider decision making.
A new seminar series focused on the business of health, hosted UTS Business School, will provide an opportunity to hear from national and international researchers from business disciplines whose research focus is on health.
Professor Andrew Jones from the Centre for Health Economics at the University of York will present the first seminar in the series on Wednesday 14 November at 3.30pm. Professor Jones is one of the foremost international health economists, and an editor of Health Economics.
Register for the seminar here.