Value-based care: why it matters so much now
Alison Verhoeven, Chief Executive, Australian Healthcare and Hospitals Association

The twin challenges of last summer’s bushfires, swiftly followed by the COVID-19 pandemic, have exposed critical bottlenecks and vulnerabilities in the Australian health system, notwithstanding our relative success in meeting healthcare needs during this period compared with many other nations.

Our experiences addressing these challenges can provide a catalyst for reimagining healthcare, which will be required as we grapple with significant economic downturn, and its impacts both on available funding for healthcare and on the health and wellbeing of Australians.

The recently signed 2020-25 Addendum to the National Health Reform Agreement provides important opportunities for new thinking in the way health is delivered, including opening the door for system-wide attention to value-based health care (VBHC).

Much more than just a trendy catch phrase, value-based health care focuses in on the outcomes that matter to patients, delivered at a cost that is acceptable to patients and funders.

There is little argument that health providers want to provide care that improves the health and wellbeing of patients; that patients should be more engaged in deciding what they want to achieve out of their healthcare; and that we all should have an interest in doing this in the most affordable way possible.

However debate has arisen around issues such as:

• funding models (Is this just a cost-cutting measure? Can a system focused on paying for performance and activity shift to paying for value?)
• ability to measure health outcomes, including what matters to patients
• how clinical leadership and patient engagement can be structured effectively into models of care
• professional and provider resistance to alternative workforce and payment models.

The Addendum to the National Health Reform Agreement provides a base for system innovation across at least the first two of these issues.

The provision for the Independent Hospital Pricing Authority to approve trials of innovative funding models, including bundled payments, is a significant opportunity for state health departments and public hospitals to put forward proposals that focus on value rather than activity.

The commitment to develop national approaches to measuring health outcomes suggests new ways of thinking about performance and accountability in our health system, beyond the traditional approaches to reporting on inputs and outputs.

Importantly, better integration between the primary and acute care sectors is flagged, through specific provisions requiring Primary Health Networks and equivalent hospital networks to formalise agreements around their shared responsibilities for the health of the communities they serve.

Missing from the Addendum is greater recognition of the social determinants of health, a key gap in the work required to shift to value-based healthcare.

We should be factoring into our health policy decisions determinants, such as housing, income and employment. We should be breaking down the silos between departments of health, community and social services. We should be sharing data across these three areas and looking for smart ways to achieve better health outcomes and ensure nobody is left behind.

Whether the innovation anticipated in the Addendum can be translated to scalable long-term reforms that focus on value over volume, remains to be seen. Yet we must not shy away from the need for these reforms.

Now more than ever, we need to ensure Australia’s health system is sustainable and resilient, focused on the best possible health outcomes for all Australians, and capable of absorbing shocks, such as we are now experiencing and may well experience again.

For more information on value-based healthcare, see:

To access the Addendum to the National Health Reform Agreement, see:

This article was publish by The International Foundation for Integrated Care here. 

Health equity, value-based health care and COVID-19
Alison Verhoeven, 
Chief Executive, Australian Healthcare and Hospitals Association
May, 2020

Welcome to the May 2020 issue of The Health Advocate. Since our last issue, a lot has happened— to say the very least. We, and the world, are now living through the greatest challenge to our health for more than a century. 

It’s often said that times of crisis, like the current COVID-19 pandemic, reveal the weaknesses in our current systems—we are presented with opportunities to learn and adapt so we are better prepared next time, and not only for pandemics. 

Crises can also embolden governments to act quickly and decisively—as the Australian Government has with the expansion of access to telehealth services, expanding the roles of nurses and other health professionals, and brokering a deal with private hospitals to join public hospitals in the COVID-19 fight. 

On the other hand, some weaknesses remain that we have known about, talked about and advocated about for some time, but to date are still in the ‘too hard’ basket. 

I would place equity and value in health in that basket. 

Universal healthcare, through Medicare, is a much-loved feature of our Australian way of life. It’s built on equity principles—every Australian having equal access to quality healthcare based on medical need, not the size of their wallets. 

Health statistics tell a different story, however. Some Australians, including Aboriginal and Torres Strait Islander people, people on low incomes and people living in rural areas have worse health and less access to healthcare services. 

The impact of health inequities has been starkly highlighted with the onset of the COVID-19 pandemic. 

People with chronic disease, experiencing homelessness or sudden income loss, or who are living in remote communities are all at greater risk, not only of COVID-19, but also potentially of poorer long-term health as their living circumstances deteriorate as a result of economic downturn. 

Our health system will inevitably undergo major adjustments once the initial emergency response to COVID-19 has passed—but the changes being made now, such as reforms to telehealth services and workforce roles, have the potential to support greater equity and value in the longer term. 

In a recent Deeble Institute Issues Brief, Can value-based health care support health equity?, we explored equity in the context of value-based health care strategies and health care reforms currently being implemented or considered in Australia. We recommended factoring the social determinants of health, such as housing, income and employment into our health policy decisions. 

We suggested renewed efforts to break down the silos between departments of health, and community and social services. 

We should also be sharing good data and evidence across these three areas and looking for smart ways to achieve better health outcomes and address health disparities. 

We also recommended that service design efforts include codesign and patient engagement strategies to promote both value and equity. 

And finally we suggested that effort must be focused not only on health services as they are currently delivered, but also on emerging treatments and therapies, to ensure that the benefits of innovation and research investment are realised across the population, not just by those who can afford to pay for these. Otherwise there is a significant risk that Australia’s universal health system, which already demonstrates levels of inequity, will be further eroded. 

These are tough times and there are a lot of pressing issues out there. But in the end equity in healthcare is not just about better health for Australians—it’s about the kind of society we want.

The article was published by the Australian Healthcare and Hospital Association in The Health Advocate – May 2020. You can read it here.

Health system had to evolve

Alison Verhoeven, Chief Executive, Australian Healthcare and Hospitals Association
December, 2019

Welcome to the December 2019 issue of The Health Advocate, the sixth and final issue in what has been a busy year for AHHA.

Our theme for December is ‘An evolving health system’. Evolve it must, but we wish it would change more quickly than that, in the direction of person-centred, value-based care that pays attention to outcomes as well as inputs.

Perhaps we put this sentiment most bluntly in our October 2019 media release when we said: ‘Time to change the game in health to get the results we want’.

We had just released our Deeble Institute for Health Policy Research Issues Brief, Reforming for value: opportunities for outcome-focused national health policy, written by Dr Kate Raymond from Dental Health Services Victoria.

As we said at the time, ‘The days of incentivising number of appointments attended instead of the outcomes achieved should be confined to the medical waste bin because rising health costs are unsustainable’.

‘Unnecessary or ineffective care needs to be cut out altogether. And preventive healthcare, which provides value for money by reducing the need to seek healthcare in the first place, needs to be prioritised.’

In the end it’s all about evolving (quickly!) to provide the right incentives for what we want to achieve. Whether it’s health, sport, taxation, or home loan interest rates, sometimes the rules need to be changed to encourage changes in the activity itself. 

Alternatively, a brave and innovative person or group of people need to set up something new and show that it pays off in terms of efficiency and effectiveness, and then try to ensure that the new way is incentivised by the guardians and umpires of the system, namely governments at all levels.

Even then, it’s not all plain sailing to get good ideas turned into good policy, as our leading event for the year showed. 

On 18 October 2019 we held the inaugural annual John Deeble Lecture and panel discussion.

We were honoured to have the lecture delivered by Professor Nigel Edwards, from the UK’s Nuffield Trust. Nigel spoke most eloquently, firstly on why good health policy goes bad, then on some practical measures to fix it.

Excerpts from Part 1 of the lecture (why good health policy goes bad) are available to THA readers elsewhere in this issue. Excerpts from Part 2 (how to fix it) will be published in the February 2020 edition.

Getting back to our evolving health system, we have some interesting perspectives for THA readers this month. 

For example, Queensland Health’s Nick Steele (Deputy Director-General, Healthcare Purchasing and System Performance) writes on ‘Delivering what matters’. The article focuses on Queensland Health’s Rapid Results Program—a ‘whole-of-system, transformational program of work focusing on prevention, value, culture and access, to deliver better health services and improved outcomes for Queenslanders’.

Professor Jeffrey Braithwaite from the Australian Institute of Health Innovation writes on ‘The road to 2030’, where he predicts, on the basis of his research and what is happening right now, where healthcare will be in a little over a decade.

Elsewhere you can read about a Community-based Integrated Diabetes Education and Assessment Service at Eastern Melbourne Primary Health Network. You can also read about a proposed hub in Melbourne that combines community health services with housing—under the one roof, so to speak.

That’s not all. We also have an article from Brisbane South PHN on evaluating person-centred care, and survey results from All.Can—a cancer collaboration dedicated to tackling inefficiency in cancer care.

Interprofessional education is part of an ‘evolving health system’, and is reported on by a team led by Associate Professor Roger Dunston, University of Technology, Sydney.

Finally, Professor Adrian Barnett and Alison Farrington from the Australian Centre for Health Services Innovation ponder choice of best path for end-of-life care in ‘When are medicine and technology not enough?’

Happy reading, and a great festive season to all!

The article was published by the Australian Healthcare and Hospital Association in The Health Advocate – December 2019. You can read it here.

Grassroots is about value, affordability and outcomes

Alison Verhoeven, Chief Executive, Australian Healthcare and Hospitals Association
October, 2019

Many factors have an impact on how healthcare is delivered, but ultimately the effectiveness of such services is measured according to their value, affordability and the outcomes achieved. 

And, when assessing effectiveness according to these qualities, we want the patient voice, the patient view, to be an integral part of the assessment—in addition to healthcare providers, clinicians and administrators. 

It was for this reason that we had some concerns with the August 2019 release of a new online Australian Health Performance Framework by the Australian Institute of Health and Welfare (AIHW). The Framework is described as ‘a tool to support reporting on Australia’s health and healthcare performance’.

What was concerning was that, as it stands at the moment, the proposals for measuring healthcare performance are all about yesterday and not tomorrow

The data are instead heavily ‘input-centric’—they are about looking backwards and counting numbers of consultations, health system costs, numbers of admissions for condition X, numbers of consultations bulk-billed, and so on.

These facts are obviously important, but are certainly not about measuring outcomes of treatments, as reported by patients as well as health professionals. 

We need to collect information that leads us to the procedures proving to be of good value, and to those situations where patients are getting the best outcomes at an affordable cost.

In terms of ‘grassroots’, we need to collect and disseminate data that show, for example:

  • how often prescription renewals attract a doctor’s fee when they could have been filled at less cost and at no detriment to the patient as part of, say, a package of ongoing care
  • the savings and outcomes that occur when using Practice Nurses to give injections instead of doctors 
  • which treatments are still in use and heavily subsidised by Medicare when more effective evidence-based treatments are available
  • where an injury treated in hospital could have been done just as effectively at a local primary care clinic for a fraction of the cost
  • why a particular course of treatment in district X is appreciably more expensive than the same treatment in district Y.

Governments are aware of such issues. The Council of Australian Governments Heads of Agreement for the 2020–2025 National Health Agreement calls for ‘new long-term system-wide reforms for… paying for value and outcomes’. 

My view is that to effect such changes on a national scale, the Australian Government must use policy levers such as mandatory data reporting and performance measurement obligations in return for government funding of services, whether directly funded or commissioned via Primary Health Networks and similar organisations.

For example, Primary Health Networks around the country cannot optimise efficiency and effectiveness of medical services in their local areas when they do not have access to robust information on outcomes.

We must use data and performance reporting in this way to drive healthcare services, from grassroots level up, that achieve better value, affordability and outcomes for patients.

The article was published by the Australian Healthcare and Hospital Association in The Health Advocate – October 2019. You can read it here.

Value-based health care: how and why it can work in Australia
Alison VerhoevenChief Executive Australian Healthcare & Hospitals Association
July 9th, 2019

The Australian Healthcare and Hospitals Association recently launched the Australian Centre for Value-Based Health Care.

Its purpose is to act as the nexus or hub of the value-based health care movement in Australia, bringing together educational and training opportunities, quality research, best-practice case studies and similar resources.

We all want value from public and private spending in health care—but defining value is not a clear-cut exercise, and adopting strategies from other countries without considering local context rarely works.

Health systems around the world have been exploring how to move the focus of their activities to delivering value rather than volume. They are trying to re-orient health service delivery towards evidence-based procedures and practices that maximise patient outcomes relative to resources and costs over the full cycle of care.

In aiming for outcomes that matter most to the patient, a value-based approach to health care must be patient-centric rather than provider-centric—and health systems and healthcare management have to be redesigned to fit.

The Centre’s first paper, by AHHA Policy Director Kylie Woolcock, is Value Based Health Care: Setting the scene for Australia.

The paper considers where Australia sits in terms of a value-based approach, as well as identifying important and essential enablers of value-based health care.

These enablers are already present in Australia, but a key hindrance is that the enablers and their components are being implemented individually and not as part of a coordinated national strategy involving all tiers of government in addition to healthcare providers and consumers.

The paper makes recommendations for effective development of value-based healthcare through public policy in Australia. These can be grouped under five main headings:

A national, cross-sector strategy for value-based health care in Australia—this will need sustained cultural change and unprecedented cooperation across sectors, as well as across regions, funding models, measures of performance, accountability and the sharing of research. Strong agreement at Council of Australian Governments (COAG) level is a key to progression.

Access to relevant and up-to-date data—including patient-reported outcomes and experience and costs, as well as robust and consistent cross-platform information at disease, sector, health service and whole system levels

Evidence for value-based health care in the Australian context—a strategic approach is needed to support value-based care trials, and developing and trialling value-based payment models.

A health workforce strategy supporting models of care that embrace a value-based approach—outcomes- and value-based changes in scope of practice and models of care will be needed, along with necessary changes to education and training.

Funding systems that incentivise the delivery of value-based health care—a mixed funding formula incorporating activity, block, and performance components will likely be required in addition to funds-pooling at regional level, bundled care mechanisms and commissioning of services.

Something for all of us to keep in mind is that value-based healthcare is not necessarily about saving money, although it may well do so in many situations—it is about achieving better outcomes that matter to patients and getting better value for every public dollar spent.

We invite innovative organisations from around Australia to partner with us to go on the value-based health care journey.

This article was published by here. 

Let’s not be afraid of reform
Alison Verhoeven, Chief Executive, Australian Healthcare and Hospitals Association
June, 2019

Welcome to this June issue of The Health Advocate, which will be coming to you shortly after the 18 May Federal election.

Our ‘value and outcomes’ theme for this issue is something that AHHA and its members are passionate about, as you can see from the submitted articles.

In the run-up to the May 2018 election we put ‘pedal to the metal’ on value and outcomes with the major parties, topped by our setting up of a new Australian Centre for Value-Based Health Care (ACVBHC), which will be officially launched in Melbourne on 11 June 2019. More information on the Centre is available in ‘The new Australian Centre for Value-Based Health Care’ article in this issue.

In our view, as well as many others, we need ‘better bang for the health buck’ from our health system. This is not about saving money—value is not about that. For example, reducing the cost of a treatment for which there is no proven benefit will save money, but that treatment is still of little value. Conversely an expensive treatment that has been proven to bring great results may be of high value despite the cost.

Before the May 2019 election the Coalition, Labor, and the Greens all promised welcome extra health dollars and reduced out-of-pocket costs for electors—but public commitment to getting better value for those dollars was muted.

Before the election we asked questions such as ‘Do you really need that extra appointment with the doctor to renew a script or have a specialist referral updated? Do you really need to pay a GP to carry out a treatment or give an injection when a trained nurse can do it just as effectively? Why are some treatments still subsidised by Medicare when more effective evidence-based treatments are available? Why get that injury treated in hospital when it could be done just as well at your local primary care clinic for a fraction of the cost?

We need to shift the whole system to value-based healthcare—that is, better outcomes for patients relative to costs—or the right care in the right place at the right time by the right provider.

This will often involve teams of health professionals providing ongoing care for chronic conditions—this has been proven internationally to be more effective, more timely and better value than traditional care systems. 

In tandem with better value is integrated and coordinated care that better suits the chronic conditions of today than the acute episodes of yesterday. To enable this, models of care and funding arrangements need to move away from traditional fee-for-service models, which can entrench fragmented care. Rewards and funding should be re-oriented to what matters to patients, namely health outcomes and ongoing effective management, usually for life, of chronic conditions.

To reform the health system in this way, governments will need to commit to working in partnership to create a health system not constrained by constitutional or legal barriers, or politics. 

Governments will need to embed My Health Record as a nationally consistent electronic patient health record, to be available wherever care is accessed, subject to privacy and confidentiality protections.

They will also need to show leadership in dealing with the inevitable opposition that will come from powerful vested interests who like the system just the way it is. 

A changed healthcare workforce will be needed and funded, to deliver the full range of services required. Flexibility in funding arrangements will be needed to cater for vulnerable populations in specific regions. Research on innovative approaches to healthcare delivery will need to be supported.

It is a major and difficult task. Innovation in health has never been easy—but let’s not be afraid of reform.

I urge whoever is in government that it makes sense to reorientate our healthcare system to focus on patient outcomes and value rather than throughput and vested interests. It makes sense to boost universal healthcare, equity in health, and coordinated and integrated care. Let’s do this during the term of the new Parliament.

This article was published by The Australian Healthcare and Hospitals Association in The Health Advocate – June 2019. You can read it here. 

Providing real value requires a healthcare revolution

Deborah Cole, Retired Board Chair, Australian Healthcare and Hospitals Association
June, 2019

As a healthcare professional, one of the hardest things to admit is that what you’re doing doesn’t work. One of the most challenging things is to change it.  And one of the most rewarding things is to see that change achieve meaningful results. 

I have just returned from Europe where I had the honour of accepting the international Value Based Health Care (VBHC) Prize 2019 for Excellence in Primary Care on behalf of Dental Health Services Victoria (DHSV). As CEO of DHSV I couldn’t be prouder that our organisation was recognised on such an esteemed international stage. It was a wonderful recognition of our commitment to providing value to patients by focusing on the health outcomes that matter most to them. 

While our move towards providing value-based oral health care is still in its infancy, we are already seeing incredible results. I’d like to briefly share our experience thus far in the hope that it inspires more health leaders to join the global VBHC movement. 

Two years ago, we looked at the state of oral health in Victoria and realised that our system was fundamentally flawed. There were significant unwarranted variations in the quality and type of services being provided. Oral health wasn’t improving. Our clinicians were frustrated. And our clients felt disempowered.  

Like most healthcare organisations, we had a finite amount of funding and resources. The only way to effect change, was to focus on value and outcomes from a patient perspective. 

We reviewed The strategy that will fix healthcare paper by Porter and Lee and used it to inform our framework for the future. We applied Porter and Lee’s VBHC principles, enhanced them for our setting and developed our value-based health care model for oral health care. Throughout this process we were navigating unchartered territory. It was confronting and exhilarating all at once. It required us to face our failures and commit to incredibly complex change without reverting to the safety of the familiar. Every step was debated, hypothesised, repeatedly revisited and most importantly, co-designed with our clients. 

Last October, we launched our VBHC proof of concept clinic and the results have been exceptional. By focusing on prevention and early intervention along with appropriate workforce mix, we are delivering the best health outcomes at the lowest cost. 

We’ve seen a 60% increase in preventative interventions and an 80% decrease in dentists doing work that can be done by other dental professionals. We’ve also seen a significant drop in failure-to-attend rates from 18.9% down to 5.8%. 

While these statistics are a solid indication that we are beginning to get it right, nothing quite compares to the personal experience of our clients. At one of our workshops, a client named Julie pulled aside one of our facilitators to say that this was the first time in all her years of navigating the oral health system that she felt listened to and respected. She finally feels like we see her. Like we understand her and her family’s needs. That moment and the look on her face has made the last two years all worth it. 

At DHSV we are determined to do all we can to create a state that is free from the pain and stigma of dental disease and to improve the health of entire populations. This may sound idealistic but if the history books have taught us anything, it’s that dreaming big often delivers.

If healthcare leaders across Australia and the world re-focus their energy towards providing value and improving health outcomes, the results could astound and delight us all. We often talk about the challenges we face in the health industry, and there are many. But by focusing on the opportunities and being brave enough to embrace complex change, we might just spark a much-needed healthcare revolution. 

The article was published by the Australian Healthcare and Hospital Association in The Health Advocate – June 2019. You can read it here