22 May 2019

What new hospitals and power stations have in common

Government Hospitals Policy

Like the energy sector, healthcare paradigms are changing rapidly. Unlike the energy sector, we haven’t even started to argue about why we aren’t planning for the drastically changed healthcare future we all know is coming.

The energy sector will not be recognisable in a few years as the component of renewable energy becomes greater and greater.

Driving this transition is the increasing cost-effectiveness and reliability of renewable technologies, as much as the desire to reduce our carbon footprint. It hasn’t been easy, but at least it is now generally accepted change is happening and needs to happen.

In healthcare, the change needed is potentially even more drastic. It involves a shift in the current health system structure – set up to meet the demands of acute illness  – to one which will be able to cost effectively manage much more chronic illness.

The current system has been funded through fee-for-service funding of our primary care sector (GPs) and a reasonably strong program of hospital development, but this model is not sustainable as the demands of the healthcare system change.

Our current healthcare strategy is the equivalent of a 1970s electricity grid model in which hospitals are giant coal-fired power stations. Coal power stations used to be the core of the future needs for electricity. They were huge,  challenging and very expensive engineering projects of which governments could be proud.

But the world has changed. No longer are we satisfied to have our governments invest millions into tapping resources that are finite, that cannot be replaced and come with significant and on-going consequences. Alternative power sources have been developed to service future needs.

Similarly, no amount of giant, new, shiny, digitally enabled hospitals will help us manage the impending chronic-care tsunami. Why then do our politicians still sell the building of new hospitals, funding of current hospitals, cutting surgery waiting lists and expanding emergency departments as the priorities of  our healthcare system?

As the need to manage chronic disease increases the demands are going to be felt more in the primary and allied healthcare system than in hospitals. Someone with Alzheimer’s, diabetes or Parkinson disease isn’t going to benefit much from what hospitals do best.

To keep pouring funding into hospitals, at the expense of primary care, where conditions such as these can be effectively managed and complications avoided, becomes a self-fulfilling prophecy. More complications, more adverse outcomes, more demands on tertiary care.

This is healthcare system fiscal suicide.

And state and federal governments should know it. There have been plenty of highly authoritative and government-sponsored reports warning of the need for change.

It’s not as though we don’t have some good examples to follow. Some US HMOs and some smaller Scandinavian countries have developed effective vertical and connected healthcare ecosystems that have, quite rapidly, reduced the need for bigger hospitals.

Key to the success of these “experiments” is that in each case the whole system was managed by one entity, and the focus was on health outcomes of patients, not just a single, point-of-care treatment.

Focussing on outcomes is, quite simply, cost effective. If you can keep people out of hospital or get them out of hospital quickly by better management of their health in the community, you will save your system money. 

The issues in changing the system are, of course, extremely complex. They involve a lot of structural change for both government and industry and many changes in the flow of money and jobs.

How do you start dismantling state health departments whose whole existence and culture rely in large part on their hospital-management capability?

Years ago, as a younger journalist, I was sent to Tasmania to interview the people from the Hydro Electric Commission, who had just finished the Gordon Dam project, and were planning several new and similar ventures.

I met these highly intelligent, passionate and committed dam builders. But they only knew how to do one thing.  How were they supposed to see that the age of building giant dams in Tasmania was nearing its end? Most of them wouldn’t have jobs in Australia within the next decade.

The situation may not be as dire for state-based health departments. Hospitals are unlikely to go away like coal-fired power stations might … one day.

Ultimately, such change has to be initiated upstream, where the source of funds to build the hospitals start – the federal government.

In the recent election, the only hint of anyone addressing this issue was the promise by Labor to establish an independent healthcare reform commission that would oversee “big structural reforms in health”. Didn’t hear about it? It disappeared from the agenda pretty quickly after the initial announcement just over two months ago.

Other stumbling blocks with this change include remuneration for GPs.

GPs are the key to managing chronic care.  But they aren’t paid for outcomes, they are paid for seeing someone. Shifting from a  simple fee for transparent service system to a model which is much more grey scale is terrifying.

After years of being shafted with pay freezes by the federal government, who wouldn’t resist such change? So far, pilots of mixed funding for chronic care have failed spectacularly.

There is a lot of work to do.

Everyone sees this problem, from the federal secretary of the Department of Health, to our various state-based health secretaries and eHealth CEOs and directors, to our peak clinical bodies such as the RACGP and the AMA.

But just who is brave enough to get us started on this journey?  Who will be the first to develop the renewable-energy equivalent healthcare system?

And when?

Wild Health Summit on June 25 will be dealing with all the issues in this article via a series of panel debates with key stakeholders including the ADHA, State governments and industry.

For tickets, go to: https://wildhealth.net.au/