THE AUSTRALIAN HEALTH CARE SYSTEM: THE POTENTIAL FOR EFFICIENCY GAINS
A REVIEW OF THE LITERATURE
Emily Hurley, Ian McRae, Ian Bigg, Liz Stackhouse, Anne-Marie Boxall and Peter Broadhead
Background paper prepared for the National Health and Hospitals Reform Commission
Available online PDF [66p.] at: http://bit.ly/qcUEM
“………..A key component of performance is efficiency. Other dimensions of performance include quality, effectiveness and equity. This paper reviews the available literature on the efficiency of the Australian health care system and the potential areas where gains might be made.
The reform directions proposed in the NHHRC’s Interim Report seek to improve efficiency in a variety of ways. These include:
1. Using activity-based funding to drive the efficient delivery of services and other key outputs in the health system, including clinical education;
2. Using economic assessments of the cost effectiveness of interventions to ensure funding goes to those interventions that will deliver the best outcomes for a given level of resources;
3. Performance-based payments to encourage the achievement of high quality outcomes; and
4. A rebalancing of the type of interventions delivered so that fewer people become ill and to ensure that when people need care they can receive the most appropriate service………..”
“…….In this paper, economic efficiency, or just ‘efficiency’, is defined as where nothing more can be achieved with the amount of resources available. Another way of looking at it is where more output of a given quality cannot be obtained without increasing the amount of inputs. At the same time, consideration is also given to its close relative, cost-effectiveness, or minimising the cost of producing a given outcome, noting that the specified outcome may not be an efficient use of resources, depending on other potential outcomes….”
Introduction
International overview of efficiency
Health status – due to more than the health care system
A framework for efficiency
Operational Efficiency
Health sub-sectors
Hospitals
Primary health care
Allied health care
Aged care services
Duplication of services
Inefficient processes
Overly expensive inputs
Health system errors – adverse events
Solutions for improving operational efficiency
Allocative efficiency
Preventive health
Primary health care
Sub-acute care
Paying for outcomes and performance
Health system governance
Administrative efficiency
Conclusion
Attachment A: Health care sector - Types of insurance/financing and delivery systems
Attachment B: Current Australian health system structure and financial flows
Glossary
References
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