Ageing Health Infrastructure and Growing Demands with Financial Pressures: How do we sustain our health system?

Australia’s healthcare system is under pressure due to increasing demand, as shown by increasing expenditure on public and private infrastructure every year. Government officials, policymakers and healthcare professionals are all worried that the country’s expenditure on healthcare is not sustainable and it will continue to burden the economy (1). There are several factors that are driving the pressure which include the ageing infrastructure, the ageing population and increasing chronic diseases cases, the rising cost of healthcare, the shortage of healthcare workers, the need to improve access to healthcare for populations in remote areas, and the need to keep improving technology. Australians expect their health infrastructure networks to support a high quality, first world standard of healthcare. They expect infrastructure to improve their quality of life in the future, despite significant population growth and major economic, social changes.

Infrastructure: Healthcare infrastructure is ageing and it cannot meet the increasing demand on it. Either we keep investing in infrastructure, or we find another way to optimise the existing one.

Ageing Population and Increasing Chronic Diseases: In 2014, Australia ranked 6th in healthcare efficiency and 7th in life expectancy. The good healthcare and high standards of living have increased life expectancy and reduced infant mortality. Unfortunately, while they do not contribute tax, a large aged population puts more demand on the healthcare system. The aged suffer more from chronic and degenerative diseases and require longer hospital stays and more follow up care. Most of them cannot look after themselves so they need to live in aged care homes or to receive home based care. Statistics from the private sector already indicate that the largest payout of hospital benefits goes to people aged between 60 and 79 years. So the aged population alone creates high demand on the healthcare system.

Increasing cases of chronic diseases - heart disease, stroke, cancer, chronic respiratory diseases, diabetes, and mental illness, among others - from middle age onward create even more demand on the healthcare system. Health Care Home is government’s response to this increasing demand, but are isolated and seemingly unrelated programs going to solve the pressure on the system?

Shrinking Working-age Population: The working-age population is not increasing. While the aged demand more care, the population of the tax-payers who pay for that care is not increasing. That means that tax rates will have to keep increasing to meet the ever-increasing demand for healthcare.

Cost and Quality: Every year Australia spends more on health, even after taking inflation into account. In 2014-15, Australia spent $161.6 billion on healthcare recurrent costs and capital expenditure, and that was 2% increase on 2013 expenditure. The cost of insurance premiums keeps rising to meet the rising costs of care. The rising costs are not affordable and sustainable. Diagnosis alone costs a lot of money. Increasing cases of chronic diseases mean longer hospital stays, regular doctor visits and increased purchase of medications.

Shortage of Healthcare Workers: As the population ages, some of the healthcare workers are ageing too, increasing the shortage of healthcare workers. Immigration policies and increased enrollment of healthcare students at colleges cannot meet the demand for healthcare workers in the short term. How long can the nation continue to increase its investment in the education of new healthcare workers?

Access to Care: Australia keeps making an effort to provide access to healthcare for many people, particularly those in rural and remote regions, while dealing with workforce and infrastructure shortages and increasing costs of healthcare. The government is creating many programs to increase access to health, for example Health Care Home and Telehealth.

Technology: Technological advancements provide opportunities for Australia to create centralized healthcare records and facilitate the sharing of such records nationwide. It also provides opportunities for telehealth, which improves access to healthcare for people in remote and rural areas. It also lessens the need to visit the doctor face to face for chronic disease sufferers, the aged and the obese, who can receive care online or via video conferencing. But it is costly to put it into place. That is a big a challenge.

With challenges like these, it is not surprising that policymakers now focus on finding ways for the nation to continue to provide high quality healthcare. As in any political situation, there is no agreement. Some look at the healthcare system as a burden while others look at it as the best way to operate. Others see it as an unsustainable system while others believe that we can continue being creative with the budget. The question to ask ourselves as citizens is: how do we continue to sustain our healthcare system?

With continuously increasing costs of healthcare, a growing population, a continuously increasing aged population and chronic diseases, Australia can never meet the demands placed on its infrastructure as long as it works under the current model. The government only has so much to spend on its budget. Instead of spending more on increasing infrastructure, it is time to redesign the system to make it more efficient, more cost effective and more accessible to everyone.

It is time for Australia to change its healthcare delivery model to create a system that provides excellent healthcare efficiently and cost-effectively. Perhaps an integrated system is called for, one that provides seamless care from primary to tertiary care centres, with collaboration between healthcare givers instead of competition, with sharing of patient information and easy access to such information.

Instead of building more hospitals and clinics, government should encourage a move towards home healthcare. In recent years, the government has come up with very good initiatives but those initiatives operate in silos and are priced differently and they target certain parts of the population. What is required is a complete revolution.

Preferred Provider Networks

Why not make the whole healthcare system a system of preferred provider networks? The idea contained in Health Care Home is for a patient to have a number of health care providers who collaborate to increase the effectiveness and efficiency of care. After testing the idea and learning lessons and making adjustments, the model can be adopted for the whole healthcare system. One thing must change though: Medicare will have to be run by a number of private insurance service providers with preferred provider networks. After that other programs like the Workers’ Compensation, the Veterans Program and the National Disability Insurance Scheme can be run in a similar manner. Read more in this article.

Home Healthcare

Australia is already encouraging home based and community based care for its population, in an effort to reduce the demand for hospital emergency care and hospital beds. Hospital in the Home, started in 1994 has been confirmed to be safe and effective as it reduces readmission rates, mortality and the cost of care. Transition Care is a special program for the aged that encourages independence and confidence after leaving the hospital, encouraging the elderly to stay at home. Services like these reduce the need for hospital beds by providing care at home. They can be made part of an integrated system instead of being isolated programs.

Healthcare Pricing

For an integrated system to operate cost effectively, pricing of products, particularly pharmaceuticals will have to be transparent and controlled. The companies concerned have to change their product and marketing strategies in order to make their products affordable and accessible to more people.

Telehealth

Australia has already adopted telehealth as a healthcare model but more needs to be done to make it accessible to more people. Telehealth reduces the need to travel to see healthcare providers, reducing costs of providing the care for providers and costs of accessing healthcare for patients. This is the one area where Australia can consider investing more in infrastructure.

References

1. Bartlett, C., Australia’s Healthcare System: An Opportunity for Economic Growth, https://www.strategyand.pwc.com/reports/australias-healthcare-system

https://www.dhirubhai.net/pulse/australian-health-care-delivered-under-preferred-provider-hoskins