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Patients vote for choice

Patients vote for choice

Consumers want more choice over their public hospital care when undergoing elective surgery, according to research into healthcare choice for public hospital patients conducted by Macquarie University's Centre for the Health Economy (MUCHE). However, currently, the two bodies agree that genuine choice remains elusive – and that isn't necessarily the case in comparable systems in the UK and US. 

Each year Australian state governments and territories expend about 25 per cent ($55 billion) of their tax revenue on public hospital services. This investment is their largest recurrent budget item with costs growing by more than 6 per cent per year according to data from the first half of this decade.

In 2015/16, more than 700,000 Australians underwent elective surgery in 259 public hospitals. If the new research is an accurate barometer of consumer sentiment then healthcare is likely to become the new stamping ground for change as the operating model shifts its emphasis from patient-as-recipient-of-service to people paying as consumers of health services and, as such, demanding more choice.

The study assessed both whether Australians wanted more choice over their public hospital care for elective surgery, and to what extent they value hospital quality relative to convenience.

Potential difficulties

A representative sample of 1000 Australians aged 50-75  were selected through research panel company Toluna Australia to collect information attitudes towards the healthcare system, desire to receive greater choice over public hospitals, and potential difficulties in making choices between hospitals. A discrete choice experiment using the same representative sample was employed to measure the strength of preferences over attributes related to convenience and hospital quality represented by hospital quality metrics.

The research was funded by CommBank. Managing director for health, education and government Julie Hunter said the bank's core vision was to secure and enhance the financial well-being of businesses, people and communities. The health sector is fundamental to underpinning financial well-being because good health is the foundation to a person's ability to take care of themselves in a financial sense.

"At a community level, expenditure on health represents about 10 per cent of the gross domestic product [GDP], so it is important for the health of the community that we find ways to deliver quality outcomes more productively," Ms Hunter said.

"From a business perspective, CommBank banks a large proportion of that whole delivery ecosystem in the health space, whether that is from primary care and doctors through to hospitals and even aged care, so we want to help our clients develop more productive and effective solutions for their clients – the patients." 

Fresh thinking 

The bank is also committed to innovation. Understanding that no single organisation has all the answers, it has partnered with others to bring fresh thinking and solutions to the market and, in this case, to the question of quality and productivity in the public health system.

MUCHE director Dr Henry Cutler said CommBank attended a lecture by noted economist Professor Ian Harper in April 2015 following his completion of the Harper Review, the first major review of Australia's competition laws and policy in more than 20 years. It included discussion around competition policy and its relationship within the healthcare system, as well as the call for greater competition within healthcare. It was a catalyst for a conversation with CommBank that eventually led to the new research.

In his analysis of the report, Dr Cutler pointed to the differences between the private and public patient experience in healthcare when it comes to elective surgery.

He said talking about patient choice depended on which aspect you considered. If it was primary care – in particular, general practitioners, patients had choice. When it came to hospital care people could choose between public and private hospitals. Patients using the latter or as private patients in a public hospital often had private health insurance to cover the associated expenses. Public patients in a public hospital, by contrast, faced some restrictions around choice.

"Theoretically, people do have a choice," Dr Cutler said. "They can go to any public hospital but practically it doesn't work that way. For example, with elective surgery you might see your GP and they will refer you to a specialist who may or may not be attached to your local hospital but, most likely, he or she is [attached] and therefore you are referred to your public hospital as a matter of convenience.

"In some states you are referred directly to your local hospital and if you are sent to a hospital outside your catchment area or the local hospital's catchment area, the administration staff of those hospitals generally send you back, saying this person should be within their local catchment.

"The other restriction around choice in public hospitals is there is no information about the quality of hospital and its surgeons – and you don't get to choose your surgeon with a public hospital."

Plenty of challenges

Dr Cutler said that while private patients had choice it was questionable whether it was informed choice. They also didn't have validated information on the performance of  the surgeon they were referred to, or the hospital in which the surgery was to take place.

And while Dr Cutler and CommBank's Ms Hunter said pressure for improved choice and changes in the system would come as patients-as-consumers became more demanding, there were plenty of challenges to consider. They include:

  • Differences in healthcare systems: Australia has a state-based hospital system whereas the English National Health Service (NHS) is a national system
  • Geographical restrictions: Australia has far greater distances between hospitals outside the major cities
  • The overhaul of current funding systems: Healthcare agreements negotiated between local health districts and the respective state government are based on volume. If there was more choice, patients may move out of their local district, thereby changing demand for various hospitals
  • Workforce: Greater flexibility would be required so healthcare workers could move from hospital to hospital to meet potential shifts in demand

Ms Hunter said CommBank would continue to support MUCHE's research into choice in healthcare and is itself exploring a range of stress points in the health ecosystem including payments as well as developing relevant and useful solutions and products. 

This content is produced by The Australian Financial Review in commercial partnership with CommBank.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.