Each year $120 billion is spent on health services in Australia. But hardly any research is done to investigate whether this money is being used wisely.
Only 2.8% of the funding for NHMRC project grants was devoted to health services research projects in 2011.
Today’s climate of financial austerity means we must find ways to save costs and improve health outcomes by investing in the best possible organisation of health services. We know we can’t afford to provide every service we’d like and that some configurations of services are superior.
Some alternatives
Here are six examples of how to make changes to health services that save costs and increase health outcomes:
Investing in good hospital discharge planning for high-risk elderly patients would save $333 million a year and would improve health outcomes. Research shows elderly patients who receive nursing and physiotherapy assessment via an individually tailored program of exercise strategies, and are followed-up for 24 weeks after discharge made fewer emergency re-admissions and avoided many other health-care costs.
Paying less for generic drugs to lower cholesterol would have saved the Australian government $130 million between May 2010 and October 2011. These large cost savings could be achieved if drug prices were negotiated to the level paid by the UK government for statins.
Stopping routine follow-up for patients with hip replacements will save resources worth $9 million each year. In most cases, the only benefit is to reassure patients. If a meaningful complication arises, patients would seek health services regardless of any routine follow-up from their surgeon.
Using antimicrobial-coated catheters in ICU patients to reduce rates of infections will save $130 per catheter placed and generate health benefits. With 17% of the annual 120,000 ICU admissions likely to receive a catheter, the cost savings are $2.65 million a year. And dangerous infections are reduced, saving lives.
Stopping the use of laminar airflow in operating theatres. The risk of costly and dangerous infections increase with their use, and these systems cost money to install and maintain. Not having laminar air flow in Australian operating theatres will save at least $4.5 million each year and will generate health benefits from avoided infection.
Restricting the use of leucodepleted blood products. In 2008, Australian governments started paying for high-cost leucodepleted products for all blood transfusions. This increased spending by $61 million a year and only delivered an extra 153 extra years of life. It’s not good value for money.
| Proposed Change | Costs Saved | Health Benefits gained/lost |
|---|---|---|
| discharge planning | $333,000,000 | 118,000 extra QALYs |
| pay less for drugs | $130,000,000 | Zero |
| follow up of hip replacement | $9,126,521 | 88 extra QALYs |
| antimicrobial coated catheters | $2,657,896 | 34 extra QALYs |
| laminar air flow | $4,592,200 | 127 extra QALYs |
| leucodepleted blood | $61,000,000 | 153 fewer years of life |
| Total | $540,376,617 | 118,096 |
Making these changes would generate health benefits of 118,096 quality adjusted life years (QALY) and release resources worth $540 million for alternate use. If this money is redirected toward the treatment interventions found to cost only $14,161 per QALY gained, an extra 38,160 quality adjusted life years would result. In total, 156,256 extra quality adjusted life years (118,096 plus 38,160) would be enjoyed by Australians for no extra cost. All this arises from re-organising the health services that are already supplied.
What to do?
This pithy analysis has ignored the complexity of health-care decisions. In health care, those who allocate spending tend to be risk averse and fear media attacks over controversial decisions, even if the decision is the right thing to do for society. Ultimately, they may consider doing nothing as the safe option, even though it is grossly inefficient.
We recognise that cost-effectiveness is an important criterion, but many other factors play a role in decisions to invest or disinvest in services and technologies. These include uncertainty about the safety of making a change and the availability of alternate interventions; and fairness and equity of access to health services, and perceived need in the community.
One example is the high cost and small health benefit of providing emergency helicopter services for rural and remote communities. Although unlikely to be a cost-effective health service, it would be unfair not to help these communities when they needed it. Good health decisions balance efficiency and fairness.
Australian governments seek to improve productivity. Health services are ripe for evidence-based reform and data to support this are valuable. The Australian Centre for Health Services Innovation is building partnerships with health-care professionals and academics to generate research evidence to improve health services. We hope senior health decision makers are motivated and excited by the work of AusHSI and will make strong health policy based on the evidence presented.
The disclosure statement on this article has been changed to reflect the fact that Professor Graves is the Academic Director of Australian Centre for Health Services Innovation.