http://www.theaustralian.com.au/national-affairs/health/health-eyes-15bn-payoff-from-war-on-waste/story-fn59nokw-1227183948925
Health eyes $15bn payoff from war on waste
EXCLUSIVE – SEAN PARNELL – HEALTH EDITOR
Ten per cent of all health expenditure — as much as $15 billion a year — could be saved through a concerted effort to reduce wasteful programs, marginal treatments and avoidable errors, senior officials in the Department of Health have revealed. The department’s Strategic Policy Group was examining large-scale savings — including an evidence-based campaign of “disinvestment” in low-value programs, drugs and therapies — long before the Abbott government committed to its unpopular GP co-payment.
Documents obtained by The Australian under Freedom of Information laws show the group of deputy secretaries and other officials wanted to reduce spending on low-value interventions and get serious about combating avoidable side-effects, mistakes and infections.
“Members expressed strong interest in holding further discussions on the impact of waste and adverse events,’’ minutes from a November 2013 meeting state. “The discussions could be informed by work already under way in the department on disinvestment and by ongoing work by the Australian Commission for Safety and Quality in Health Care.”
Out of the public eye, the group — which reports directly to the secretary of the department — established an Optimising Value in Health Investment Working Group and talked with Treasury officials. The bureaucrats were keen to redirect money away from areas where there was minimal benefit and potential harm. The FOI documents shed new light on the workings of government and go some way to dispelling the myth that health bureaucrats have not recognised the need to pursue efficiencies and efficacy.
A department spokeswoman yesterday confirmed the work was ongoing. The Grattan Institute has called for more work to be done on the cost of hospital admissions and procedures, noting the cost of a hip replacement in NSW public hospitals varies by more than $16,000. It has estimated savings of $1bn a year from targeting such inefficiencies, as well as $500 million a year from workforce reform — making better use of highly skilled workers — and up to $500m a year through greater use of generic medicines. Some in government believe higher co-payments for drugs and services will make consumers spend less on unproven therapies and, with more of a financial stake in health, be more accepting of limits on access and subsidies.
There are questions about the cost of subsidising new and expensive drugs, especially those with few recipients and limited efficacy, with a Senate committee soon to report on the timing and affordability of access to cancer drugs.
The last federal budget committed to a controversial co-payment that has since been reworked. It also outlined plans to merge the safety and quality commission and five other agencies into a new Health Productivity and Performance Commission — a move that has already halted work on new performance reporting for emergency departments, elective surgery and infections — and replace Medicare Locals with a new primary care structure.
The budget did not take up the commission of audit’s recommendation for a broader, 12-month review of health policies and programs. The government has yet to finalise outstanding reviews into mental health, alcohol and drug services, after-hours GP services, super clinics and unproven natural therapies benefiting from the health insurance rebate. The government believed the health architecture established by Labor needed to be disassembled, price signals put in place for consumers, and growth opportunities given to the private sector before other savings could be pursued. Plans for a reworked $5 copayment — estimated to save $3.5bn by 2017-18 — will start to play out from Monday, when regulations setting new time frames for consultations come into effect.
The government wants GPs to focus on more serious cases, requiring longer consultations, but the Australian Medical Association has warned of $20 co-payments for shorter consultations. About 40,000 people have signed a petition against the copayment and new Health Minister Sussan Ley has yet to start the sales pitch, amid speculation the regulations could be disallowed by the Senate.