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How can we make healthcare more affordable for Australians?

7 Jul 2014, by Informa Insights

Andrew Wilson, Executive General Manager, Provider Networks and Integrated Care, Medibank
Andrew Wilson, Executive General Manager, Provider Networks and Integrated Care, Medibank

The Australian healthcare system is one of the top four amongst the western countries according to a recent report conducted by the Commonwealth Fund. Yet the industry is met with soaring demand, underfunding and resource constraints. Private health insurers are playing a more important role than before to help and improve the healthcare system, in order to provide their members the best service.

Andrew Wilson, Executive General Manager, Provider Networks and Integrated Care of Medibank joined us recently for a Q&A. He shared with us his thoughts on the biggest challenge faced by the health sector and how we can make health more affordable for Australians.

What do you think is the biggest challenge that the health sector faces in Australia? 

Andrew: Australians enjoy a good health status and the succour of a first-rate, internationally-renowned health system, with access to universal health coverage, yet demand is soaring, and our current health system is simply not sustainable. Ambulances queued up outside emergency departments, long waiting lists for elective surgery and poor outcomes from hospitalisation blamed on underfunding and resource constraints.  In order to maximize the value private health insurance members get from their premiums, private health insurers need to play a greater role in helping to improve our health system.

What’s driving healthcare costs?

Andrew: Advancements in technology and increased usage of services as a result of chronic disease, mean healthcare costs in Australia are growing at an unsustainable rate, with hospital costs alone representing 38% expenditure (excluding capital expenditure).  Most significantly, there has been an increase in chronic diseases associated with lifestyle and ageing, which presents a major challenge for Australia’s health and hospital systems. Currently, chronic diseases are responsible for around 70% of total healthcare expenditure and contribute to 50% of GP consultations. In short, they are the leading causes of disability and death in Australia.

How can we make healthcare more affordable for Australians?

Andrew:There are some immediate steps we could take that would enable better health for all Australians:

  1. Set up a system to provide help and support to those with chronic illness and complex health issues to help them co-ordinate and connect their health services and to be aware of the best healthcare options available;
  2. Look at a payment per capita for high needs patients that encourages practitioners to work together and focus on the patient health outcome;
  3. Work with all parts of the health system to develop universal, robust quality health metrics that take costs, health outcomes and patient experience into account and are made publicly available so consumers know more about the options in front of them; and
  4. Encourage other funders such as Medibank to have greater involvement and responsibility for our health system.

What can Medibank do to help shape a better future for the Australian health sector?

Andrew: Currently, 3 per cent of Australians consume nearly 40 per cent of our health budget, our research shows these high-need patients would like a program or organisation that could help them “join the dots” and provide them with a holistic understanding of their health. Such a program would mean they would enjoy better treatment continuity, which would lead to better health outcomes with lower exposure to acute care costs, and this in turn would stop wasted funding, which is a by-product of “random care”.

For those high-need patients, we should move away from the “fee for service” approach and look at a payment per capita that encourages practitioners to work together and focus on the patient health outcome.

At Medibank, we have begun to fund and operate health services like this where care is coordinated and connected, such as the health services we operate for Australia’s Defence Forces, or our trial with some general practices that supports Medibank members to gain fast access to a GP when they have health concerns, and the integrated care pilot we are running for two state government health departments to support public and private patients battling chronic illnesses and complex health issues.

You will be speaking at the upcoming Health Insurance Summit on the topic “We can afford the future of our health system…but we can’t afford the waste”. What would be your key message to the summit audience?

Andrew: The dramatic increase in the prevalence of chronic disease has created the need for a review of the current health system and the role that all participants – including private health insurers – play in this. Through cross-sectorial collaboration, we can overcome regulatory barriers to achieve better coordinated and integrated care, to ensure that we really are working towards the better health of all Australians.

Andrew will be speaking at the 13th Annual Health Insurance Summit, taking place on 28th and 29th July at the Sydney Harbour Marriott Hotel.  For more information about the conference program and to register, please visit the Health Insurance Summit website.


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