Gone are the days of institutionalised care, and Australia’s health system regulators need to catch up and knuckle down, says PHA’s CEO.
Private insurers are “bolted on to” a potentially unsustainable health system, says the head of Private Healthcare Australia, Dr Rachel David.
Dr David knows full well the impact of a struggling Medicare from both a corporate and practitioner lens. Starting her career as a medical practitioner, Dr David evolved into consulting and leadership roles in the international pharmaceutical, biotechnology and medical devices industries, including gigs at CSL, Pfizer and McKinsey & Co.
Now she is chief executive of the peak body for private insurers and says there are some worrying problems in healthcare that will be hard to fix.
What keeps you awake at night?
The sustainability of the whole Medicare sector in Australia that private insurers are bolted on to.
A lot of people don’t grasp that private health funds in Australia are not private in the truest sense of the word. They’re locked into the Medicare system through a number of mechanisms.
The sustainability of the Medicare system has really been shaken to its core by covid. Covid amplified some long-running, threatening trends, and the economic effects of covid have hit the health sector hard as well.
We’ve seen some big spikes in out-of-pocket costs that have affected everything from general practice right through to the medical specialties in hospital care. There was a 300% increase in medical out-of-pocket costs that have been billed through health funds, and through the formal billing system.
So that is an issue we’re going to have to address and it’s going to be a tough one to fix.
What does Australian healthcare need to be doing better?
One thing we need to get our heads around very quickly in Australia is that globally, there is a transition away from institutionalised care at all levels, moving away from long hospital admissions. Everything is moving towards individual-centred care.
It starts with primary prevention and helping people understand their own risk factors and what they need to do to enhance our own health, productivity and wellness. It moves through to good community care and primary care and secondary prevention –knowing what tests you need at each stage of life to monitor risk factors.
Then, if you do need hospital admissions, keeping them as short as possible and transitioning to community care as quickly as possible to minimise the risk factors of being in hospital.
This is happening all around the world. We’re seeing a transition to short stays in mental health admissions and short stays for surgery. Our system needs to be able to adjust and use all the tools available to be able to do that so that it’s a seamless and convenient experience for people in the community.
Our funding mechanisms need to be able to keep up with that trend. However, too much of our funding mechanisms is tied up in hospital care being the default position. State governments, private health insurance and the MBS all need to evolve away from that default pretty fast now.
How can we shift state governments away from ‘hospital care as default’?
With a bit of a push from the sector, we have started to see some states break away from that. For example, there’s the Amplar Health/Medibank and Calvary collaboration for the South Australian government under Premier Chris Picton. It’s a public private partnership (PPP), which is a virtual hospital that gets people out of a (bricks and mortar) hospital.
I believe that NSW and some other states now really want to understand what incentives need to be in place in order to roll out this kind of model. Even from the Commonwealth it is a big topic of conversation.
My second point, that I can’t stress enough, is that we need to better understand the data and know what’s really going on.
It’s not enough to just look at the standard statistics that we get through the system like bulk-billing statistics or the waiting list.
You can do some data matching, and that’s fine, but you need to combine the data with survey work and have people develop a really thorough understanding of what’s going on, on the ground.
Without that data and analysis, things bolt away from you. The next thing you know, you’ve woken up to see 20% of people going to a GP outside the Medicare system, through telehealth. You see people paying $800 booking fees and other nonsense for surgeons that are completely unnecessary.
This is the sort of thing that catches on very quickly when nobody’s paying attention.
What’s your view on new telehealth providers that work outside the Medicare system?
Some of them are largely a kind of sick leave certificate mill.
My biggest worry is that medical conditions will be missed. Most of them don’t do pathology tests and there are serious associated risks with prescribing things like oral contraception, and some erectile dysfunction medications, for example. If you’ve missed something with a patient, you could actually kill someone.
I have nothing against technology or offering convenience to people, because that’s what they need. We’ve just got to do this safely and do it properly.
The other concern is that I think we’re going to see some price gouging. When Medicare was working well – before some of the prices of medical services bolted away from it – it acted as a benchmark price mechanism to keep medical costs down.
There’s not a lot of transparency about (these new providers’) medical services and what they charge. I feel that things are breaking away and becoming a bit more difficult to control.
I suspect that we’ll see pockets of very inappropriate billing practice and price gouging as this type of health provider evolves. It means that our regulators need to pay attention.
In many ways, I see the health funds competing in this market, particularly in areas of weight reduction and the prevention area. However, we’ll be doing them properly and using a proper evidence base, even if it costs more.
Wildcard question: If you had unlimited funds to buy a sports car, what would it be?
Look, I’m not a huge car lover but I would upgrade my current Mini and buy a really sporty model – like the ones you see racing around in the movie The Italian Job.
I’m a bit of a greenie at heart and Minis run on the smell of an oily rag. I’m very concerned about things like climate change, so I’m not up for a gas guzzler. I can also park anywhere and they’re surprisingly durable.
So if I had unlimited funds for a car it would be a very sporty, electric Mini. Of course, I’d have to put it through its paces zipping around somewhere like Italy though.