Healthcare system delivers world-class ROI

Health care worker looking at iPad | Newsreel
Australia's healthcare system is among the most productive in the world. | Photo: Gorden Kaoff (iStock)

Australia’s healthcare system is one of the most cost-effective in the world, according to new Productivity Commission research.

Commissioner Catherine de Fontenay said while Australia’s healthcare spend was big and getting bigger, there was a significant return on investment through better health outcomes.

This is the first time that the quality of Australia’s healthcare has been considered in an assessment of productivity. The study showed our healthcare productivity ranked third among 28 high-income countries.

“Previous research assessed the productivity of our healthcare system by looking at how much it costs to provide a service, such as a visit to hospital. This research looks at how much it costs us to treat a particular disease and the outcomes of treatment,” Commissioner de Fontenay said.

“Looking at the outcomes our system creates for patients provides a much truer picture of its productivity. A healthcare system that gets people in and out of hospital quickly and cheaply isn’t much good if those patients aren’t getting better,” she said.

The research shows “quality-adjusted multifactor productivity” grew by about 3 percent each year between 2011-12 and 2017-18, with growth driven mostly by improvements in quality rather than reductions in cost.

“Productivity growth was particularly strong for the treatment of cancers, likely due to the introduction of new cancer therapies in the 2010s. This highlights the importance of quickly integrating new treatments as they emerge,” Commissioner de Fontenay said.

She said while quality-driven productivity improvements were welcome, Australia’s growing healthcare bill was still cause for concern.

“Healthcare spending already accounts for 10 percent of GDP and this is only going to increase as our population ages. Our challenge moving forward will be to provide services more cheaply and efficiently without comprising on quality.”

The report found that reducing risk factors, such as obesity and alcohol consumption, was one way of enabling our healthcare sector to do more with less.

“We have the fourth highest rate of obesity in the world and the sixth highest level of alcohol consumption. This worsens population health and creates more work for our healthcare sector,” Commissioner de Fontenay said.

The report also found that productivity gains had not been universal and while there had been big quality gains from advances in saving lives, there had been fewer, if any, gains in improving quality of life.

Read the Productivity Commission report.