Value-based health care: how and why it can work in Australia

| July 9, 2019

The Australian Healthcare and Hospitals Association recently launched the Australian Centre for Value-Based Health Care. 

Its purpose is to act as the nexus or hub of the value-based health care movement in Australia, bringing together educational and training opportunities, quality research, best-practice case studies and similar resources.

We all want value from public and private spending in health care—but defining value is not a clear-cut exercise, and adopting strategies from other countries without considering local context rarely works.

Health systems around the world have been exploring how to move the focus of their activities to delivering value rather than volume. They are trying to re-orient health service delivery towards evidence-based procedures and practices that maximise patient outcomes relative to resources and costs over the full cycle of care.

In aiming for outcomes that matter most to the patient, a value-based approach to health care must be patient-centric rather than provider-centric—and health systems and healthcare management have to be redesigned to fit.

The Centre’s first paper, by AHHA Policy Director Kylie Woolcock, is Value Based Health Care: Setting the scene for Australia.

The paper considers where Australia sits in terms of a value-based approach, as well as identifying important and essential enablers of value-based health care.

These enablers are already present in Australia, but a key hindrance is that the enablers and their components are being implemented individually and not as part of a coordinated national strategy involving all tiers of government in addition to healthcare providers and consumers.

The paper makes recommendations for effective development of value-based healthcare through public policy in Australia. These can be grouped under five main headings:

A national, cross-sector strategy for value-based health care in Australia—this will need sustained cultural change and unprecedented cooperation across sectors, as well as across regions, funding models, measures of performance, accountability and the sharing of research. Strong agreement at Council of Australian Governments (COAG) level is a key to progression.

Access to relevant and up-to-date data—including patient-reported outcomes and experience and costs, as well as robust and consistent cross-platform information at disease, sector, health service and whole system levels

Evidence for value-based health care in the Australian context—a strategic approach is needed to support value-based care trials, and developing and trialling value-based payment models.

A health workforce strategy supporting models of care that embrace a value-based approach—outcomes- and value-based changes in scope of practice and models of care will be needed, along with necessary changes to education and training.

Funding systems that incentivise the delivery of value-based health care—a mixed funding formula incorporating activity, block, and performance components will likely be required in addition to funds-pooling at regional level, bundled care mechanisms and commissioning of services.

Something for all of us to keep in mind is that value-based healthcare is not necessarily about saving money, although it may well do so in many situations—it is about achieving better outcomes that matter to patients and getting better value for every public dollar spent.

We invite innovative organisations from around Australia to partner with us to go on the value-based health care journey.

Visit the Australian Centre for Value-Based Health Care, find out more about the AHHA, and read the full report.