When our leaders sit down next month at their Council of Australian Governments special retreat to discuss Australia’s health system, they need to consider more than just funding and a division of responsibilities. They need to develop a framework that collects and uses evidence to make our health system better.
The recent Intergenerational Report projects that our health expenditure per person will more than double across the next 40 years. People are expected to live up to five years longer than they presently do, and the proportion of the community over the age of 65 will double. In addition to ageing, the main drivers of rising expenditure include new technologies and the desire of people to seek more healthcare to treat and cure an ever-widening range of conditions.
Musculoskeletal disease, often caused by osteoarthritis, is a prime example as it is the second most common cause of life years lost through disability and accounts for at least 10 per cent of the health budget in most developed world countries.
Although joint replacement surgery has been shown to be a highly successful and cost effective solution to end-staged osteoarthritis, the Australian Orthopaedic Association National Joint Replacement Registry shows that patients do not always receive prostheses that are known to work for the longest time.
In recent years there also has been a surge in the use of injectable products (for example viscosupplements, platelet-rich plasma) for controlling pain, improving joint function, healing injuries and retarding arthritis. However the evidence for their long-term benefit is lacking. Despite this, patients have sought and are being advised that such costly treatments are appropriate and justified for their conditions.
While the Intergenerational Report projects most types of healthcare to rise steadily in real terms, it contains the assumption that hospital funding will increase only at the rate of inflation, reflecting the policy stance contained in the most recent budget.
If this comes to pass, it will make most state health ministers fall off their chairs. The lion’s share of hospital expenditure is devoted to funding wages and salaries, which generally rise faster than inflation. Hence state governments are being expected to do more with less.
Putting the level of funding to one side, there is no question we need to increase the efficiency of the hospital system, but do it in a way that ensures we deliver the right care at the right time, to the right patient at the right price.
A key element here is to use evidence to improve care. Sometimes this evidence will come from the literature, but it also needs to come from studying what is happening in our own hospital system.
For example, using the AOANJRR, Australia was the first to alert the world to how a certain type of hip replacement was inferior to the alternatives, leading to a worldwide withdrawal of the product.
We need to expand registries and conduct clinical trials to understand how alternative methods of care affect patient outcomes and costs. At a commonwealth level, expert committees advise which pharmaceuticals are cost effective and there will be a review of services covered by Medicare.
Surprisingly, there is no equivalent committee to systematically assess technologies and procedures in public hospitals to determine which should be funded by the states.
While each state could develop its own structure, it would be better to assess hospital care technologies at a national level to avoid duplication and ensure access to care does not depend on the state in which you live.
A national hospital care technology assessment institute could commission research to find the most cost-effective ways to improve care.
It also could be tasked with looking for ways to save money by disinvesting in procedures where there is no evidence of benefit to patients; improving the efficiency of delivery of care; and promote practices that reduce adverse event. It should also advise on what new technologies make best use of public money and work out guidelines for which patients will benefit most from these newer technologies.
The present practice of managing the health budget is not sustainable, whether it be indiscriminately cutting funding that will deprive many of much needed care or allowing the indiscriminate rise of expensive ineffective treatments that will drain the public coffers for little health benefit.
Evidence is the sieve that separates good ideas from bad ones.
Philip Clarke is professor of health economics at the Centre for Health Policy at the school of population and global health at the University of Melbourne. Peter Choong is head of the University of Melbourne department of surgery at St Vincent’s Hospital