Jennifer Doggett. Cutting waste and costs in health.

Feb 5, 2014

Cut expensive and low-value services: Health funding is not allocated to areas which deliver maximum output. We spend too much on expensive low-value services and not enough on preventive, high –value care.  Recent research shows that a number of routine tests performed in the Australian health system do not improve clinical outcomes. These include x-rays for lower back pain, liver function tests for people on statin therapy and routine glucose tolerance tests for pregnant women.

Structural reform: There is significant duplication of functions, gaps and poor coordination across areas of Commonwealth and State/Territory responsibility.  There needs to be a single funder and/or single point of accountability for all health care (as recommended by the NHHRC)

Reform the funding system:  Funding arrangements for health services often do not reflect their value. We need a funding system which ties subsidies to value and which steers consumers towards the more cost-effective treatment option. For example, where physiotherapy is a more efficient treatment for a soft tissue sporting injury than conventional medical treatment it should be subsidised at a higher rate.

Remove interest groups: Powerful vested industry groups, such as the pharmaceutical industry and the medical profession, influence policy and funding decisions resulting in anti-competitive and rent seeking practices that disadvantage consumers.

Move away from fee-for-service: A (largely) fee-for-service payment system does not support doctors to provide comprehensive, preventive and multi-disciplinary care for people with complex and chronic health problems.  At least for these people we should investigate alternative payment systems, such as a capitation model.

Workforce reform: Doctors in Australia undertake many tasks which in other countries are safely and efficiently done by nurses.  Breaking down professional barriers should allow for the lowest cost person to provide the care, where they can do so safely and effectively.


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