Healthcare in Australia The Digital Transformation Outlier - Part 1

Healthcare, its very size and complexity as well as its integral importance to our own health and well-being, has made it a topic of great interest to politicians’ innovators, futurists and software technology companies all around the world. Here in Australia, if you added up all of the federal departments related to health and healthcare, public hospitals and the cross-governmental regulation agencies, you would have one of the largest (if not the largest) single industry-blocs in the country. Moreover, this would probably be the same for all of the other OECD countries around the world. 

It is also the sector that is being driven to rapid change…whether it likes it or not. In the past, this sector has been resistant to change but technology innovation, the rapidly shifting demographics of an aging global population, geopolitical and financial shifts in power and unprecedented global migration are now starting to have huge impacts on many outdated and already embattled healthcare systems around the world. Basically, you now have all the elements for a perfect storm – one that most pundits seem to think these systems are not equipped to weather.

So, is there an impending problem here in Australia or is this all hype? Australians currently rank amongst the healthiest in the world, largely due to the high standard of living, education, and healthcare accessibility. Australia’s health system is also one of the most efficient and equitable in the world, ranking fifth of 163 countries on Bloomberg’s 2017 Healthiest Country Index. But these glowing figures can hide some glaring issues and future challenges that are not going to go away.

Healthcare is basically a service industry, but one which does not act or look like any other we can compare it to – it is riven with red-tape, government oversights and massively controversial data privacy concerns. A fragmented industry, beholden to multiple business and patient stakeholders, and yet paradoxically, this is also the industry that has seen some of the greatest technology-driven innovation in the last 10 years. Innovations in Genetics, AI, Robotics and IOT, all hold the promise of massive gains in efficiency, exponentially better health outcomes and much lower costs to the patient and the taxpayer. Huge potential improvements to health outcomes could arise through a paradigm shift from treatment to prevention. These new technologies can already support a much more cost-effective precision-based, approach to healthcare that is driven by historic and real-time data insights sourced directly from the patients- all focused on detection and prevention. And yet according to a new CSIRO report released in September 2018: Consumer distrust in healthcare data sharing is at an all-time high, poor digital health literacy and system interoperability problems are threatening the sustainability of Australia’s healthcare system. Moreover, Australians spend on average 11 years in ill health in their lifetime - the highest among OECD countries (source: Australian Bureau of Statistics 2015).

 “The Australian health system will fail to meet the needs of Australian citizens, and moreover fail to access strategic opportunities for growth and improvement in consumer outcomes, if we cannot keep pace with changes occurring in technology, research and development, consumer demands, and the shifting demographics of our population,” (source: Ceda - Connecting people with progress: securing future economic development November 2018 report)

Digital transformation is perhaps the most talked about and written about the challenge in business today. We have seen massive shifts and disruptions in the practically all of the service industries, Manufacturing industries and many other sectors. Yet Healthcare, one industry that perhaps stands to gain the most from the massive innovations in the bio-sciences, robotics, and AI fields…Is also one of the slowest adopters in this burgeoning digital-transformation revolution. Why? Healthcare is perhaps one of the most complex regulation driven, privacy constrained and fragmented industries in today's world. It is an industry fraught with emotion, risk and an aversion to rapid change. Today the My Health Record database is one of the most controversial initiatives being discussed in Australia's Healthcare industry – with many health professionals openly advising patients to opt out. And yet it this very data that will be critical to future A.I and Big Data innovations to deliver better health outcomes and better predictive diagnosis results for all of us. So, it should not surprise you that many of the bigger firms already have dedicated practices, that are focused on healthcare innovation and digital transformation for that sector. Accenture is already heavily involved - executing on some of the major mega transformation projects, like The My Health Record (MHR) here in Australia.

In the short term changes to the political and social structure can have direct and indirect impacts on how human capital has been deployed in any industry and Healthcare is no exception. The Healthcare industry has been the biggest employment growth sector in Australia for at least the past ten years. Until recently, the peaks and troughs of local skill shortages have been mitigated by leveraging the 457 visa - allowing easy immigration for overseas doctors, nurses and other skilled health professions. 

The graph below shows the patterns of skilled medical migration to Australia, UK, Canada and the US.  

 Figure 1: Global Migration patterns for healthcare professionals – Frost & Sullivan 2016

In 2018, the 457 Visa was been replaced by the two-part TSS Visa which will effectively make it harder and more restrictive to bring in those skilled workers to fill skill vacancies. As this is a relatively new change, the impact of these changes has yet to be felt locally. 

Healthcare administrators are already under siege and struggling to manage day-to-day spot-fires and operational issues. Many don’t have the luxury of looking to the future 12 months from now, let alone the next 5 years from now. So where are the changes and innovation going to come from? In the past we have seen seismic changes in other industries that have often been driven by outsiders not from those industries. Just as Uber disrupted the taxi industry, Tesla disrupted the car industry (and space industry) - so too companies like Amazon and Google, for example, are setting their sights on the global healthcare industry. It is still “early days” on this frontier and frankly, the jury is out on whether these outsiders will meet their Waterloo in the healthcare sector. Nevertheless, timing is everything and many innovations and technology solutions already exist – innovations that when applied to that industry change its very core. The near future in this sector will most certainly be driven by patient data and technologies that can leverage and securely store and analyse that data for better, more cost-effective patient and stakeholder outcomes. Data analytics innovations both in A.I based predictive diagnosis and genome-based “precise medicine” are already here ready and waiting to be better utilised.  

Not withstanding the recent security issues at Facebook, when it comes to data security, most research suggests that consumers still have far higher trust levels in non-government “outsider” organizations like Google than they do in government agencies to manage their vital health data. It seems we would be happier gathering our own vital health information ourselves via our mobiles and wearables, storing it somewhere (probably on the cloud) with someone we trust, and only using it when it’s useful to us, or, indeed, when someone is prepared to pay us for it? Additionally, the promise of technologies such as Blockchain and FHIR (the web sharing health data standard), will put these sorts of platform-based services in the hands of individuals and data management companies rather than the healthcare and government institutions. The concept of the informed patient is not a new one but an informed patient with the ability to leverage technology to manage and deploy their own vital health information brings a whole new set of challenges threats and opportunities to this sector. 

What does this all mean for the future of healthcare? This is the 1st of three articles that I am writing on this topic. The next one will deal with the impact of AI and big data on patient welfare and diagnostic outcomes as well as how these innovations will reshape the Healthcare industry. 

If you have found this article useful or thought-provoking and already work in the Healthcare Industry, I would relish the opportunity to hear from you to get your input and views on the future of healthcare and its impact locally and globally for the second article in this series.