Australian Private Hospitals Association 33rd National Congress Keynote Address

The Minister for Health Peter Dutton delivered the keynote address at the Australian Private Hospitals Association National Congress in Brisbane on 24 March 2014.

Page last updated: 24 March 2014

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24 March 2014

Ladies and Gentleman, good morning and thank you for the introduction.

Thank you very much to Chris Rex for your words earlier and thank you Michael Roff also. We have developed, I think, over the years an excellent working relationship and I look forward very much to that continuing.

Thank you for meeting in my home town of Brisbane.

It’s really great to be here and I acknowledge the people today who have been pioneers in creating a sector that has played a pivotal role in building the Australian health system and those that continue the legacy today in the pace of today’s global economy that work continues to grow in importance and private hospitals in this country are, as most Australians know, world leaders.

So it is a pleasure to be here to open the 33rd National Congress.

The sector makes a major contribution to health and wellbeing of this country – providing Australian’s with more choice in the type of health care they can access while at the same time taking pressure off the public system, particularly public hospitals and emergency care.

Our world-class health system is as good as it is because it relies on a combination of private and public services. And like business, government can no longer just rely on increased funding for increased patient outcomes.

We need to be stripping costs, regulatory burden and bureaucratic nonsense from the process. We want to ensure patient safety and government can do that by helping to reduce the red tape industry that has been created in your sector under the guise of workplace health and safety, duplicative reporting requirements and the like.

In a mature and professional model it is a distraction from the core business of patient outcomes.

Dramatic improvements in productivity gains in the public sector are also essential just as they have been in the success of your business model. Importantly they create a competitive tension resulting in better patient outcomes and greater efficiency in the spend of your tax dollars.

Our bureaucrats in Canberra understand that definite change in direction under this Government and our role across the department is to facilitate not frustrate the efficient delivery of health services.

I believe significant productivity gains in healthcare can – and must – come - not only through improved public sector efficiency - but also through bold new ideas from the private sector.

The private sector generally has a key role to play to ensure the required productivity gains are realised, including through expanded services, innovation and technology and training.

Now I am pleased that we are already moving in this space. Earlier this year I opened the UnitingCare Clinical School at the Wesley Hospital here in Brisbane.

The expansion of this school will allow an additional 270 students per year to develop their clinical skills through on the job training in a fully equipped clinical environment.

Indeed across Queensland in another private setting, the Icon Cancer Centre is treating around 70,000 patients every year.

Twenty years ago public officials would have scoffed at suggestions that these services would be delivered outside the public setting.

I am also encouraged to see that health insurers are looking at innovative options in the area of primary health care.

Now there’s been some recent media interest in this issue and I wanted to take the opportunity today to deviate, just briefly, to address what is a very important matter.

Around 11 million Australians have some form of private health insurance in this country. That seems sensible to me and it should seem sensible, I think, to all Australians that insurers would want to do all they could to help keep those customers healthy and to avoid admissions, re-admissions and procedures, if clinically appropriate to do so.

They have been excluded from the primary care space for historical reasons and if insurers are prepared to work collaboratively with doctors and patients then we should welcome that development.

Sharing information about the patient with all the usual safeguards has the potential to free up capacity for non-insured patients - not detract from it.

And so that makes it no different from the approach we take to the rest of the system. Indeed this measure strengthens Medicare it doesn’t weaken it.

The collaboration between Medibank Private and the Independent Practitioners Network in the Northern Brisbane region is one such example.

HCF is providing an after-hours home GP service for their members.

In addition, Bupa and Healthscope have entered an arrangement where Bupa members can use the Healthscope national network of medical centres, skin clinics and pathology services.

I do though want to address some comments as they were recently reported on this issue.

My support in this area is around trying to provide more support at a primary care level, that is in the patient’s best interest and ultimately that of the Australian taxpayer.

If an insurer can provide additional support to the doctor around interventions to say a pre-diabetic patient why would we resist that? It has the potential to save a lot in human and financial terms.

However it does not and will not involve that person opting out of the Medicare system and therefore debunks any suggestion that this will undermine Medicare – as I say quite the opposite.

From an insurance point of view it allows them to target frequent users and if implemented correctly it will be in the longer run a save to the insurer and ultimately policy holders.

We have no interest in supporting changes that would result in higher premiums and therefore bring pressure to bear in other parts of the network. And our support of these trials is predicated on that assumption.

I should also note with a word of caution the payment arrangements as they’ve been proposed in some of these future design proposals.

I would find it very difficult to see any system changes in this space where insurers were picking up out of pocket expenses for patients -that is delivering free services.

This can be about value adding for insurers that’s fine, but it is a by-product.

My main objective is to help people improve their health and where possible enhance the primary care offering so as to avoid those future interventions.

We are willing to provide some support through Medicare, but not beyond that.

So it is essential that we continue to explore new and innovative ways to provide health care in this country.

But it is incumbent on all of us as taxpayers, as managers of the health system, as users of the health system and most importantly as deliverers of the health system, to make sure we deliver services in the most efficient way possible.

This is particularly the case given the Australian Government spending on health care has more than doubled in the past decade alone.

The discussion now must be about sustainability.

The $62 billion the Government currently spends each year on health will blow out another $13 billion over the next four years.

As a nation, we are spending around $120 a week on health care for each man, woman and child.

Over the past decade, Commonwealth spending on public hospitals is up 83 per cent and is projected to go up another 50 per cent over the next four years.

That’s why we started the discussion about the type of health system our nation needs to go forward with an ageing population and with the advent of many expensive medical technologies and costs beyond that.

We need to make sure that all aspects of our healthcare system remain strong and yet flexible enough to deal with future challenges – some of which are not so far into the future.

Of course, the challenges of obesity, diabetes, Alzheimer’s, cancer are with us now. With rates of diabetes are up 40 per cent in the last 20 years and Alzheimer’s is up a staggering 170 per cent.

What is also increasing is the progressively personalised approach to managing chronic diseases. Future health care will increasingly be about personalised medicines for particular strains of cancer; or genomic testing showing a predisposition to breast cancer or Alzheimer’s etc.

And rightly, patients will demand early medical intervention knowing the outcome of that testing.

These are all costs which are not presently factored into any forward estimate projections and we don’t know how much they are going to add to the future health bill.

But Australians will – and should – expect timely access to these new approaches to patient care. So it is important that we have a sustainable system which can embrace these new technologies.

The private sector has the runs on the board in terms of innovation and efficiency.

The previous Government looked upon the provision of any medical services in the private sector as an affront to human decency, but it defied the history even of their own party.

During the 1990s, there was considerable growth in the private hospital sector. This included an increase in the diversity and complexity of services offered in the sector.

These things were once considered outside the realm of the private hospital responsibility have grown and persisted and many private hospitals are continuing to develop specialty care options within their facilities.

Nowadays, there are around 1,345 hospitals in Australia. Almost 600 of these were private hospitals and private day surgeries.

Private hospitals are undertaking many complex inpatient procedures. Indeed, all Australians should know that private hospitals provide 97 per cent of the total procedures and treatments offered in public hospitals - including cardiac surgery.

And as you would be aware in 2012 almost 77 per cent of knee replacements were undertaken in private hospitals, the point here is the Australian public needs to know more about what it is that you are doing.

In 2010-11, private hospitals provided about 1.6 million non-admitted patient services, including dialysis; radiology; psychiatric; dental and allied health services; and other community health and non-medical type services.

Private hospitals also provide the bulk of in-hospital chemotherapy and the bulk of hospital care for our veterans - as well as playing a significant role in obstetric and palliative health care.

So why should we see private sector involvement in public services as a bad thing?

Here in Queensland, and indeed across the country, public and private hospitals are partnering to reduce the waiting lists and times for people currently on the public hospital elective waiting list.

In 2012-13, the Queensland Government’s “Surgery Connect” programme – targeting high demand surgical specialties such as orthopedics, urology, endoscopy and ophthalmology – saw more than 3,800 procedures supported.

The Queensland Government is expecting to provide an extra 8,000 procedures over four years through this type of partnership.

Collaborative programs such as these support innovation, help reduce cost and keep the patient at the centre of the health care model.

We should be leveraging with the private sector, not just for services and infrastructure, but to meet other challenges, such as workforce training, and the use of medical technology.

It is likely that things such as robotic surgery, telemedicine, remote monitoring and drug-eluting will change the delivery of health care and will contribute to improved patient outcomes.

But they come at a cost – and I believe most Australians are willing to contribute to this cost. Australians expect world class health care and we are willing to pay for it.

To build a health system that is sustainable, the Coalition is interested in policies which offer longer-term system reform, making smarter use of funds to provide better care.

The universal health system means that there will always be value in leveraging people into supporting their own health needs in the private sector.

Picking up nearly 100 per cent of the cost in the public setting makes no sense for the taxpayer when the patient is prepared to contribute to their own costs.

Therefore I believe one important job of the Abbott Government is to grow the opportunity for Australians to contribute to their own health care needs.

We need to look at aligning incentives and systems to make value for money choices, the easiest choices.

The focus of the Commonwealth should be on getting our primary care response right, particularly for the chronically diseased and the aged. We need to look at the payment models and the way in which we manage the most frequent users.

And as I have said before, we need to look at increasingly moving from managing supply, as measured by the volume of services provided, to managing demand, as measured by improved health outcomes. This is particularly the case in indigenous communities.

At the same time, we will ensure that those who are least able to look after themselves, will in fact be looked after.

This always has and always will be at the core of any Liberal Government approach.

I believe there is capacity to use private hospitals better to improve patient outcomes.

We need to look at roles for you that aren’t just about service delivery – as important as that is, you also can play an important role in meeting other challenges – including supporting an appropriately trained and located health workforce, improving patient safety and quality, and delivering the best outcomes for patients.

The other important opportunity is in the area of medical research.

Medical research was one of Tony Abbott’s greatest strengths as Health Minister in this country. I intend for the same outcome during my time in this portfolio.

We currently provide $850 million a year in funding for NHMRC grants.

In February we announced $133 million in funding to support 153 grants across five NHMRC schemes.

The grants will address broad areas of research, from infections in cancer patients to building immunity to childhood eczema and allergies. They include postgraduate scholarships and a Targeted Call for Research on Foetal Alcohol Spectrum Disorder.

The funding announcement follows the almost $600 million for new medical research discoveries I announced in October last year.

The last Coalition Government increased funding to the NHMRC five-fold from $131 million in 1995-96 to $715 million in 2010-11 and all our funding commitments had been implemented.

As Health Minister, Tony Abbott announced an additional $905 million for Australian health and medical research in 2006 and in 2007 he provided $485 million infrastructure grants to a wide range of medical research institutes.

The point is I believe there will be increased opportunities in the years ahead for stronger collaborations between world class private hospitals in Australian and the research community and I think they will be exciting times.

In closing let me say a couple of words about the economic legacy or mess that we inherited. We are six months into Government so we’re very much in the opening days of this term of government and already we’ve been able to correct some of the difficulties that we inherited, particularly around chemotherapy, around training and some other areas, but there is a lot of work to do.

I believe the future for your sector, but also for the way we deliver health services in a sustainable way is very bright.

I look forward to continuing building the relationship with the sector. I believe the private sector in this country, in particular private hospitals are held near and dear to all Australians and the Australian Government believes very strongly we will continue to build those relationships for the betterment of all Australians.

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