Healing healthcare 1: Operating costs

Healing healthcare 1: Operating costs

Healthcare is everybody’s business, but unfortunately the business of healthcare isn’t doing so well. Brooke Consultant Bryanna McDermott has been engaging with thought leaders and practitioners across the health industry to determine what is needed to create the best medicine for Australia’s healthcare. This is the first blog in her series Healing Healthcare.

There is wide concern that the health sector is stuck in reactive mode, lurching from one crisis to the next. The wisdom in proactively addressing the problems of today, while also building a system capable of meeting tomorrow’s evermore complex needs, is no revelation. But this common sense ideal remains elusive.

Brooke has been asked by both public and private health organisations to share our expertise and point of view on how to determine what a healthy health system looks like, and develop a path to achieve it. In tackling this challenge we ran a number of robust interactive workshops and one-on-one conversations with health professionals to identify what outcomes health practitioners and organisations are looking to achieve and to define cases for action. It was a privilege to be afforded time with some of the sector’s most inspiring thought-leaders. I am now excited for the opportunity to distil some of the incredible learnings and insights from these conversations into a series of “Brooke Thinks Health” blog posts. Hopefully my reflections from this 12-month-long journey will not only resonate widely with those in the industry, but with those who are willing to roll their sleeves up with Brooke and help to improve the health of Australia’s health system.

In this first blog I will look at some of the factors driving the dynamics of the healthcare sector and the pressure points that they are creating. In subsequent blogs I will look at each of these in more detail and introduce some of the opportunities we have identified to help address these issues, both tactically and systemically.

Operating costs: Onwards and upwards!

The most obvious pressure point for service providers in the healthcare sector is the relentless onward and upward march of operating costs. What is not so obvious is that to a large extent this is a self-inflicted structural problem.

Dr Rob Grenfell, Director of Health and Biosecurity at CSIRO recently stated that Australia’s focus on illness treatment instead of preventative care, was akin to the healthcare market mortgaging the future for the sake of dealing with short term demands. This type of short-sighted behaviour will have catastrophic implications for future generations, not to mention place an immense amount of additional pressure on a health system that is already struggling for air.

Worse still, this structural imbalance in focus and funding tends to be a self-fulfilling prophecy –finding new treatments takes funding away from prevention, resulting in more problems that we have to find new treatments for. This helps fuel the stratospheric rise in Australia’s healthcare operating costs.

Technological advancements also mean that we can do more, so we do. Diagnostic capabilities in particular have seen radical improvements, which means that we are finding more things to treat. Since we can now usually find them earlier, we need to devise new early intervention treatments too. All this should be for the benefit of the patient, but sometimes what appears to be common sense doesn’t stack up empirically.

Operating costs are being driven up by another structural factor – the increasing prevalence of complex chronic illnesses as the population ages. The vast majority of a person’s lifetime health costs are incurred in the last few years of life and the pressure from Australia’s ageing population has seen the health system buckling at the knees. This comes at a time when Australia is also experiencing rapid population growth (ranked as the fifth fastest growing population in the OECD in 2016).

Our interactions and conversations with health leaders tell us that there isn’t a corner of the industry not suffering from these challenges. Brooke’s experience in other complex and highly regulated industries has afforded us insights into how to create long-term sustainable solutions that overcome similar pain points. These solutions have enabled organisations to break through the threshold of reactive operations to achieve proactive, profitable operations.


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Bryanna McDermott

Bryanna McDermott

29th November, 2018