The sharing by default legislation allows big pathology to keep stalling , doesn't put all key stakeholders on notice to change and ties sharing to a failed legacy platform
A very senior clinician working on some of our key healthcare review committees in Canberra rang me out of the blue a couple of weeks back confused as to what the sharing by default legislation might end up actually achieving.
Given the stark juxtaposition of how much change – including, significantly, a direct threat to current income streams – the big pathology providers face, to deliver what the government wants and the government’s now near-term legislative threat that they will stop paying the groups for what they don’t upload quickly enough (or at all) to the My Health Record, it’s a pretty good question.
This particular clinician had been sitting in meetings in which representatives from the pathology groups were in the same room as government trying to iron out how it would all unfold, and looking from one party to the other, she was trying to get a read on who seemed more determined to get their own way given the obvious issues in play.
Not that there is any overt hostility coming from either party so far in this initiative.
In fact, worryingly, the pathology companies say they are largely on board and behind the changes.
They aren’t, and mostly everyone knows it.
Why would they be?
If they comply to the letter of what the government would like, they will almost certainly be inviting short to mid-term drops in their revenue lines, as healthcare providers and consumers start coordinating far better and avoid unnecessary testing or repeat testing, an inefficiency which the Department of Health and Aged Care has identified as being as large as 25% of the system.
An informed consumer and connected providers are a serious existential threat to the current revenue models of the big pathology providers.
As things stand, communication is a mess between all parties, and in that ecosystem, pathology channelling, whereby the big companies virtually guarantee the reselling of their tests via their lock on various GP practices, thrives.
The less everyone knows in this set up the better for pathology revenue.
Most patients have no clue they can take their branded pathology form and go anywhere they like for their test, not to the addresses and brand listed on the form. Most patients, of course, won’t even think about that if there is a co-located pathology facility. They will simply pop into the pathology facility next door to have their test done on their way out for the convenience.
And the communication disconnect between patients, their GP, specialists and hospital outpatient clinics creates an environment where tests are ordered unnecessarily a lot, or repeated for no reason.
Break this dynamic down and pathology companies are going to start bleeding revenue fast.
Our insider clinician saw the obvious potential problem for the government though: the pathology providers still have a lot of bullets to fire if they want to keep resisting this important upgrade to the way the system works.
We know they are happy to roll the dice on expensive public (misinformation) campaigns like their current, and significantly misleading, “keep pathology bulk billed” effort, a follow-up to the relatively unsuccessful “don’t kill bulk bill” campaign of 2016.
We know they can mobilise their massive regional footprint politically targeting swinging electorates and leverage their close fiscal relationship with a lot of GP practices, via their willingness to pay exorbitant rents to co-locate a facility within a GP practice.
We know they are in Canberra exploring every angel to get leverage in every aspect of what is going to unfold with a lot of well-funded lobbying firepower.
We guess that if the government did actually stop paying for tests already done by the pathology companies that there would either be one giant, long, messy legal case no one would win, with the biggest losers being the system and patients, or they would call the government’s bluff and stop doing a whole lot of testing tactically and see how that panned out in various electorates over time.
But possibly the biggest immediate problem for the government is not how politically and financially powerful the pathology groups are, but how weak and leaky their initial sharing by default legislation appears to be.
If the legislation is too forgiving and ill-defined, which it looks like it is so far, the pathology companies can forgo challenging the government in public and simply fly under the radar by using the legislative loopholes to frustrate the changes for a long time to come.
How long?
Well, if you read the legislation, nobody knows because the legislation so far does not put an actual deadline on the pathology companies to do anything. That is to be decided – hence possibly all those meetings in Canberra where everyone is pretending to be nice.
That’s quite a big loophole. A truck-sized one really, especially when you think that prior to the legislation passing the Lower House a week ago, the DoHAC and the Australian Digital Health Agency had promised us all a hard deadline on the pathology companies of Christmas 2024 for when they would need to be uploading all their results to the My Health Record.
That threat and deadline seem a distant memory now.
But not having a deadline yet is not the only loophole in the legislation.
Even if a post-legislation review committee does get to some sort of deadline which is agreed with the pathology groups, then there’s a pretty broad-ranging get-out-of-jail-free series of clauses based on whether you can get the technology to work or not.
The Medical Software Industry Association of Australia points out that there are actually a lot of smaller providers – especially in imaging – that do not have the capital or the technical wherewithal to upgrade their software in time – whatever “in time” means at this stage.
The big pathology companies can play the same game and they likely will. And when they do everyone should understand that they would be playing games. Each is big enough, sophisticated enough and profitable enough to upgrade their systems to upload results more or less in real time whenever they want.
We know this because some of them are hard at work on their own sophisticated direct-to-patient portals, an effort no doubt to lock patients onto their brand and services moving forward – re-channel them – before they are forced to share their information openly via the My Health Record and risk losing clients who will have a lot more ability to pick and choose service providers.
And while the pathology groups can do the work if they are motivated too the technology is complex and it’s going to be easy for them to say to the government it’s really hard, they need a lot more time, that this widget doesn’t work and that cloud set up is wrong. Their systems are all proprietary. No one can get in and audit them and call bullshit.
Another problem the government has is the current state of the My Health Record itself.
In this respect you’d have to fall on the side of the pathology providers if they raise a very obvious issue.
The way the My Health Record is currently set up is old and clunky. It’s hard to talk to and when you do, it’s even harder to get information back out of it. Hardly anyone uses it as a result, so if pathology companies magically did start uploading everything in real time today, virtually none of it would be useful for patients or clinicians still.
The ADHA is amid a tender to upgrade the My Health Record significantly to FHIR and open API interfaces to make it far more interoperable.
But until that happens, the pathology companies could easily argue, why waste everyone’s time and money upgrading to talk to a system that can’t and doesn’t talk to the rest of the system or patients effectively anyway?
There’s an even more disturbing question we ask below: why tie sharing to the My Health Record at all when doing that is obviously problematic and you don’t need too?
By tying the whole thing to the My Health Record the pathology companies could also justifably also ask that once the upgrade is finished, which is some time in 2026 if it is done on time, are you then going to have turn around and fork out a whole lot more money to redo how you talk to the upgraded FHIR enabled version?
Answer: most probably, yes.
So far the government has acted tough on this issue which has been refreshing in one respect but it’s not really that useful talking tough if you don’t have solid negotiating position at the end of the day.
The loose and open ended nature of the initial sharing by default legislation seems to suggest the government isn’t confident yet in its negotiating position.
Regardless federal health minister Mark Butler came out swinging when he announced that the legislation would be through this year (it probably won’t be as it seems to be stuck in the Senate for now) a few weeks back at an industry event in Melbourne.
“The sharing by default framework will ensure that pathology and diagnostic imaging companies that do not upload the results of a test or scan will not get a Medicare benefit for that test or scan,” he told delegates at that event.
“It’s that simple. Withhold a patient’s results and we will withhold the Medicare payment.
“It’s not a drastic position for a government to take.
“In the United States, for example, the 21st Century Cures Act requires the portability of health records with open access to consumers to their own health information.”
If you think about some of the problems the government still has to fix on its side – a My Health Record which isn’t ready for taking the information and doesn’t share it properly even if it gets it and legislation that is leaky and easy to skirt, at least for the time being – it’s not simple.
Not yet anyway.
It’s likely why our insider clinician was asking herself what is going on at those meetings in Canberra.
Will, or can, the government really bend the will of big pathology the way that Mark Butler’s fighting words on the subject suggest they would like to given the lay of the land?
You wouldn’t think so … yet.
None of this is to say that the efforts of DoHAC and the government in trying to push these issues along faster is a bad thing.
It’s the right thing to do. There’s a lot of good planning and good ideas coming out of DoHAC at the moment in terms of nudging the system towards meaningful change faster, but for effective change you need a lot of things to align – politics, money, technology and so on – and they don’t have that alignment yet in this particular project.
If it did come down to a shootout at the Pathology Upload Corral in the near term, as Butler’s rhetoric seems to threaten, the guys wearing the dark shirts and hats with the big moustaches and red bandanas (the pathology providers) would likely be the only ones celebrating at the saloon after party that night.
But their time is coming. They can’t keep ducking and weaving forever.
While the legislation might be too loose for now and the My Health Record not ready for the changes the government is insisting on, these things will eventually fall into place.
There is too much of a government change agenda in motion for the pathology companies to sit on their old and, at times, obscenely profitable revenue models too much longer. If they do they are being poorly led and run.
The system is wasteful and they’re a big and obvious part of the problem as things stand today.
Everyone in the system is having to contemplate big change at the moment and no one likes it: GPs, pharmacists, nurses … hopefully sooner or later specialists too.
Good long-term businesses know that at some point in time they need to make their money being part of the solution not the problem, especially once they’ve obviously been identified as the problem.
The pathology lobby bleating about how unfair freezing bulk-billing rebates for 25 years is banal and points to them still being in resistance mode so far.
Technology improvements in this 25-year period have meant that we haven’t needed to unfreeze rebates at any point of time for them to keeping making good profits.
They should stop whining and start planning.
Now they have AI and although they are just getting started with it, it’s almost certainly going to revolutionise their productivity. They need to think about that upside and how they might share it with the country somehow as a form of negotiating leverage to make changes.
What better time for them to reimagine their operations and start rearranging with the huge upside they know AI is going to bring them?
What better time for them to actually work in some sort of actual alignment with the government for both the system and their bottom lines to have a decent future?
Maybe both sides could even talk constructively about moving away from the fee for service model which doesn’t suit the trajectory of our system into a significant chronic care management paradigm, as a part of that solution.
It’s happening in primary care, why wouldn’t we contemplate the same thing in pathology?
One final thought here for the government in where we are with the legislation process.
When Mark Butler was grandstanding a few weeks back he referenced how the US government had mandated standards in technology and information sharing and had underpinned its legislation with the threat that non-compliance could lead to a jail sentence.
He said, “Under that [US] legislation, providers that do not have modern, cloud-based systems in place to enable this sharing can be sent to jail, which is not something we’re considering.”
It’s not likely Butler really understands what happened in the US and how it is actually relevant to what is happening in Australia, and even, the likely ineffectiveness of the initial sharing by default legislation.
In the case of the US legislation they gave healthcare providers and technology vendors five years’ notice of them doing it and then another five years once they introduced the legislation until they actually had to play ball or things could get heavy.
Part of DOHAC’s and Australia’s problem is that we don’t have that much time to effect change.
From the outset the US government was very clear with all stakeholders: you must upgrade your technology and processes to a set of standards that would allow well defined meaningful sharing of health data between providers and between providers and patients.
Our government isn’t being very clear about that in Australia and not to all the stakeholders it needs to be clear too.
The pathology upload deadlines and the sharing by default legislation so far look nothing like what the US leglisation did, in that it hasn’t put every stakeholder on notice, it seems to be tying information sharing to the My Health Record only, which won’t work, and, most importantly, there is still no deadline for anyone to do anything.
Not even the pathology providers have a deadline to face so far, let alone the myriad of other key software platform providers that are going to be much more critical to the idea of effective real time data sharing in our system.
The US legislation was very clear and very simple in what it announced it would do and then what it did. Everyone had to upgrade their technology in a line to common standards of technology that would enable meaningful sharing across all aspects of the system between providers and between providers and patients, on a set date, no exceptions.
If our government wants to do what the US has so successfully done and enable providers in our system to share meaningful data in real time with each other, and with patients, then it needs to get much clearer with its process, its messaging and its intent to all stakeholders.
Firstly, everyone needs to be on notice, not just the pathology companies.
Secondly, we can’t tie meaningful sharing to just the My Health Record. It is a legacy platform that will slow everything and everyone down if we do that because it is not currently fit for purpose for sharing properly. It is a rate limiter in its current condition.
The US approach was simple: make every point of the system that holds data be able to share it meaningfully by requiring those points to upgrade to a common set of sharing standards and technology by a certain date. No need to tie that to the My Health Record because if everyone is on notice to do that – the software vendors and through their platforms, all healthcare providers – the My Health Record is naturally captured into the change framework. It’s just one point of data in the system that has to meet the common requirement for sharing and interoperability capability.
Then, everyone needs to see a clear timeline for transition, be offered a reasonable framework for getting help as they go along, and a firm deadline for when they need to be ready.
Anything less and we are still fiddling.