Despite the comprehensive NHHRC review little seems to have changed in the health debate. While its goals were laudable, we seem to be sliding inexorably into a consensus that it’s all about more money, despite evidence that pumping cash into an unreformed system is doomed to fail.

Reforming health is hard, and will only be delivered by thousands of initiatives to drive performance improvement not big ideas or spin. Done right using management tools common in other sectors, this can deliver improved health outcomes with no increase in delivery costs.

The Australian health system delivers good outcomes due to 5 elements that enjoy wide support: Medicare, PBS, PublicHospitals, Private Healthcare and Aged Care. The US experience shows that universal insurance is not the answer.

It is clear that Public hospitals are the major underperforming component of the health system, but this is a management not a structural problem. Systematic improvement can only be driven by one of four drivers: Resources, unit people costs, productivity and clinical effectiveness. The most important driver to focus on is productivity, where there has been little improvement relative to other sectors of the economy in recent years.

Three Strategies for Improved Performance. Since price signals don’t work well in healthcare, investment decisions should be based on the proven clinical cost effectiveness of different types of intervention. Some specific strategies to deliver improvement should be:

1. Eliminate Adverse Events and Waste. An estimated 30% of health expenditure delivers no benefit or harms the patient. Rigorous quality and safety improvement programs, as well as e-Health, can deliver significant improvement to this poor performance.
2. Invest in High Value Interventions:

• Develop Disease Strategies. Invest in the high impact initiatives that will do most to reduce disease incidence and mortality
• Improve Public Hospitals. Implement reforms including hospital boards, federal funding via casemix, vouchers for public elective patients and travel / telemedicine payments for regional hospitals
• Review Clinical Procedures. Create a capability to identify and share medical best practice, probably via the AIHW.
• Grow the Health Workforce. Restructure medical training to allow increasing specialisation to ensure the clinical workforce will meet our needs over 20-30 years.
• Extend Medicare success to Dental Care. Extend Medicare to basic dental care.

1. Invest in Health and Medical Research. Research drove the improvement in health outcomes in the 20th century, and should receive ongoing Government support, focused on translational research.

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