PricewaterhouseCoopers identifies key features to sustain ailing health systems - 23 November 2005

Faced with rising costs, diminished resources and growing demand, healthcare systems around the world are under siege and may be unsustainable unless fundamental change occurs. The crisis is prompting Australian healthcare organisations and policymakers to seek solutions. A global report, HealthCast 2020: Creating a Sustainable Future, is launched today in Australia by PricewaterhouseCoopers to highlight international best practices that can help sustain health systems.

Financing current demand alone is crippling national health systems and economies. PricewaterhouseCoopers projects that global healthcare spending will triple over the next 15 years to US$10 trillion. In Australia healthcare is predicted to consume an estimated 16 per cent of GDP over the next 15 years. This is in line with other OECD countries, except the US, where it is expected to reach 21 per cent.

"Creating a sustainable health system, one that balances cost controls with the need to provide Australians with safe, quality care, is a moral obligation and an economic imperative,” said Dr Anne-Marie Feyer, National Health leader for PricewaterhouseCoopers. "We can no longer afford to paper over the cracks in Australia’s healthcare system - fundamental change is required. While no country has all the healthcare answers, there is an opportunity for Australia to make positive changes based on learning’s from around the world.”

HealthCast 2020 comprises a survey of 578 international healthcare executives in 27 countries and interviews with 120 health leaders in 15 countries, both including Australia. It identifies seven common features for sustainability - the need for common ground among stakeholders, a digital backbone, incentive realignment, quality and safety standardisation, strategic resource deployment, innovation and process change, and adaptable models of care delivery.

"Solutions to common healthcare challenges are emerging - involving technological innovation, preventive care and patient-focused models. These solutions are improving health outcomes and saving money, whether it’s changing the way hospitals are financed in China, doctors are recruited in the US or healthcare providers are reimbursed in Australia,” said Dr Feyer.

Like manufacturing and technology, healthcare is going global. For example, the US is turning to Indian and Australian companies for outsourcing radiology readings. Australia enhanced the US’s use of diagnostic-related groups (DRGs) to clinical coding, and Singapore, France and Germany are subsequently adopting this system.

Key findings of PricewaterhouseCoopers HealthCast 2020 include:

• Accelerating Health Spend
  More than half of the survey respondents agree that future healthcare spending will accelerate at a greater rate than in the past. Executives in Australia, the Middle East and Asia were more likely to say that healthcare costs would accelerate. Government, hospitals and doctors - followed by consumers - are seen as having the most opportunity to eliminate wasteful spending in healthcare.

• Shared Financial Responsibility - Public and Private
  More than 75 per cent of respondents believe that financial responsibility should be shared. Only a minority of industry leaders in Australia, the US, Canada and Europe think a sustainable system would be mostly tax-funded. More than 50 per cent of respondents say a mix of competition, taxpayer funding, regulated cost controls and cost sharing by patients are important to sustaining their health system.

• Managing Demand
  Preventive care and disease management are cited as most important in reducing demand on healthcare systems. Four in ten respondents think that direct cost sharing by patients is effective or very effective in this regard. Lack of care integration is seen as the biggest problem facing the health delivery system, according to more than 80 per cent of respondents.

• Consumer Responsibility
  Interest in consumer-directed care is intensifying. As patients assume a greater share of healthcare costs, they will demand greater accountability and increased transparency. Eight out of ten respondents say that transparency in quality, pricing and safety is important to future sustainability. The majority (85 per cent) of organisations surveyed have initiated pay-for-performance initiatives. Two-thirds of respondents believe hospitals are unprepared to meet the challenges of savvy consumers.

• Information Technology
  Information technology (IT) is an important enabler to resolve healthcare issues, not a standalone solution. Approximately three-quarters of respondents think that IT is important or very important to integrating care (73 per cent) and information sharing (78 per cent). A smaller percentage sees IT as important for improving patient safety (54 per cent) or restoring patient trust (35 per cent).