The Australian Healthcare System – what’s wrong with it and how to fix it?

| May 31, 2015

For the next two months we will discuss Australia’s health. Introducing the topic is Kevin Austen who says to fix our Healthcare System we firstly need to agree on a common vision for it.

On the surface many people would argue that there is nothing wrong with the Australian Healthcare System and that it certainly doesn’t need fixing. However, the evidence is growing rapidly and is now overwhelming that the way we run our current Health System is simply unsustainable. Just tinkering around the edges won’t be sufficient. If nothing dramatic is done the cost of Australian Healthcare will rise from about 9% of our GDP to about 14 to 19% within 10 years.

The “System” is extremely complex with many competing forces and reinforcing and counteracting behaviour drivers are at work, often preventing the most appropriate courses of action. What are the real issues and how do we significantly improve and achieve sustainability? I was reminded recently of a particularly pertinent quote from Winston Churchill:

Winston Churchill


“Out of intense complexities, intense simplicities emerge”.


There are five fundamentals.

  1. It is critical that we recognise that we are dealing with a complex system which comprises many sub-systems, many of which compete. Most significantly, each sub-system will attempt to optimise itself in isolation from the entire system, which can result in negative or unintended consequences elsewhere. We have the Public vs Private split and the Federal vs State split.

To compound things further we also have the Acute Care vs Public Health split. All these “splits” are interconnected and action in one component can immediately have an impact on the other.  An obvious example is initiatives in Public Health’s prevention sphere where vaccinations can reduce impact and treatment activity levels in our hospitals.

What is required first of all is an agreed common goal or vision for the entire system so all sub- components can begin to be optimised for an overall impact. Some years ago there was insight into the treatment of asthma across our entire country. Expenditure in one part of the system of approximately $100M would reduce the overall treatment costs system wide by well over $2B.  No one wanted to take the hit for the $100M so the system overall remained inefficient and with higher costs of treatment. Research in the UK by Prof Seddon has demonstrated that the overall vision and focus should be the target patient, client or family and not activities.

  1. The current system places far too much emphasis on activities and transactions with new initiatives coming in to financially link payments to activities. These incentives will, in turn, drive further activities which then often drive inappropriate treatments or care both from a patient/client perspective as well as a professional clinical view. Indeed, some studies have shown that up to 25-55% of interventions may not even be appropriate. This is occurring within a system that is often organised along professional, treatment or medical system lines when increasingly those presenting have multiple co-morbidities that required integrated responses.
  2. Lack of information sharing often results in over servicing and inappropriate treatments that in turn drive further need for additional interventions. A few years ago my elderly mother in law had been prescribed oral analgesics for arthritis pain by her GP. She fell over and finished up in hospital. The rehabilitation specialist reviewed her case and immediately took her off the particular analgesics because they were known to cause dizziness in the elderly. After she got home her GP immediately put her back on the same tablets. She fell over again, broke her femur and was readmitted to rehab after surgery. A multidisciplinary team were wonderful and sorted out everything. She got home and the GP immediately put her back on the same tablets.

Better and integrated communication between the primary, secondary and tertiary health professionals could have prevented unnecessary interventions and heart ache. An opt-out e-medical record is urgently needed in Australia where by default everyone is included and people would need to consciously opt-out, rather than the other way around.

  1. We think that we have pulled all the fat out of the back office, administration and many core processes in our hospitals and other areas. A few weeks ago, the senior specialist of a major ER department was trying to manage a particularly busy day over the weekend. A simple piece of equipment such as a printer wasn’t working. In order to save money there is no out of hours support for IT related equipment. The result on the ground was an extremely frustrating day with large amounts of wasted time running around the hospital trying to collect hard copy results for the medical record, with obvious consequences in terms of patient waiting times. Our processes and resource management need to be re-examined from a Systems Thinking and Systems Dynamics perspective to stop poor decision making. We are continually trying to save a few dollars in one area without appreciating the consequences on other parts of the overall system. There is still huge scope for efficiency and productivity improvements.
  2. Our Health System is extremely fortunate to have many insightful practitioners at all levels of our system. We have “wins” and significant new, more efficient or effective ways of doing things every day. What we don’t have is an effective method of evaluating and disseminating these ideas around the rest of the system. What is required is for a series of Living Laboratories to be established where innovation can be tested at multiple levels of the system. An entire small state could be used to trial changes in system wide drivers or specific Hospital processes or Patient Care pathways. Australia needs a rigorous well supported approach to discover and disseminate new ways of doing things at multiple levels of our entire Health System.