SPEECH - Digital government and the role of healthcare

Digital government and the role of healthcare 

Medical Software Industry Association Speech, 31 October 2024

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Introduction

I am pleased to be at this MSIA conference.

Today I want to speak about digital government and the role of healthcare.

My starting proposition will be that Australia has a productivity problem – and the healthcare sector can be an important part of the solution.

Next I want to speak about how software and information technology can help – while recognising this can be a lot more complicated than it might first appear.

Thirdly, then, I want to suggest some principles that could help us all to capture the potential that technology offers.

Australia’s productivity problem and the role of healthcare

Let me start then with Australia’s productivity problem. 

Over the long run, our productivity has grown at an average of 1.5 per cent per year.  But that has been slowing.  In the five years to 2019, it dropped to 1.1 per cent a year. 

Under the Albanese Government things have got much worse. Productivity grew by 11.4% over the last Coalition Government; in one year of the Albanese government, almost half of that had been lost. 

Now, what does this have to do with healthcare?  The health care and social assistance industry now accounts for 15 per cent of Australia’s workforce, making it the largest employing industry in Australia. 

According to the Australian Institute of Health and Welfare, the number of healthcare workers rose 36.6 per cent between 2013 and 2022, from 503,995 to 688,555. This is 22% faster than population growth during the same period.

With an ever-rising share of the workforce, the productivity performance of the healthcare sector will increasingly be key to the productivity performance of Australia’s entire economy.

The need to ratchet up productivity across the health system was recently taken up by the Productivity Commission in their report, ‘Leveraging digital technology in healthcare.’ As the Commission noted: “… governments need to find ways to make the resources they invest in health go further. In other words, there is a need to continue improving healthcare productivity. Digital technology is a vital enabler of productivity growth.”[1]

The Commission found that the use of digital technology could save the average health worker up to 11 hours per week, while the better use of patient data could create workflow efficiencies, saving $4.5 billion each year.

How software and information technology can improve productivity 

Let me turn then to the potential for technology to help improve productivity in healthcare.  I want to start with a remarkable Australian success story: Harrison.AI. This company’s Australian developed artificial intelligence tool supports radiologists in interpreting patient scans, with increasingly impressive accuracy.  According to the company their technology is now used by about a quarter of Australian radiology practices. 

Radiologists in Australia’s public health system are under pressure to process scans and provide results in a timely fashion; the availability of this tool can help them do their vital work. 

Another example is telehealth. According to Services Australia, before the pandemic, less than 1% of Medicare-funded GP and specialist consultations were delivered via telehealth; now, the share is nearly one in five for GP services.

Yet another example is the rise of e-prescriptions, which save time and provide greater convenience for patients.

All of these are examples of what economists would describe as productivity improvements: delivering outputs in less time and with less use of labour and capital. If a patient only has to take half an hour off work for a telemedicine consultation with a doctor, rather than two hours to include travel time and waiting time in a doctor’s surgery, that is a productivity improvement. 

In industry after industry we have seen significant productivity improvements due to information technology.  Consider the banking sector for example: today for most transactions you do not need to go into a branch, you can apply for a loan online and have it approved quickly, and the digital payments process is faster and more efficient than the old world of cash and cheques. 

But of course the healthcare sector is very different to other sectors, and we cannot simply translate expectations from other parts of the economy into healthcare. To take one difference, the banking sector in Australia is heavily concentrated.  If the four big banks agree on an industry standard for digital payments, then that is the standard that will be implemented across the economy – and in turn customers benefit from the efficient, industry wide use of that standard.

By contrast, the healthcare sector is not very concentrated. There are over 158,000 health services businesses in Australia. Most of them are small businesses, such as individual medical practices. 

When we think about how technology could improve the patient experience, and equally importantly deliver benefits to doctors and other healthcare providers, it is important to recognise that technology is only part of the issue.

Consider for example attempts over more than fifteen years to establish a universal digital medical records system, initially known as the Personally Controlled Electronic Health Records, and more recently as My Health Record. Even today, take up is very modest. 

The Australian Digital Health Agency tells us proudly that there are 23 million records with data in them, with 1.4 billion documents in total.  But a closer look at the numbers suggests there is a lot more work to do: only 32 per cent of specialists for example have used the system.[2] 

According to the most recent annual report, in 2022-23 there was a 7.46 per cent fall in the number of times consumers used their My Health Record.  The total number of usages was around three per user, so this is certainly not a tool people are using on a daily basis.[3]

In my view, this highlights a very important issue: driving greater use of this system is a cultural change exercise as much as, if not more than, it is a technology exercise. Critically, if specialists are not making much use of the system, then it is not going to be a useful tool for patients. 

But unless this is something the specialist wants to do, it is not going to happen, whether or not the technology allows it.  To my knowledge, three way consultations between a GP and a specialist are a very unusual thing – and the arrival of high speed broadband is unlikely to change that reality of the professional culture of doctors. 

Some principles to apply

Let me turn then to the third part of my remarks. If we can agree that technology holds out promise for improved productivity in healthcare, to the benefit of both patients and providers, but if we also recognise that there are some barriers to the take up of technology, what then are some principles we could apply which might be of assistance? 

I want to suggest five such principles. 

First, our approach in healthcare should be consistent with a broader government wide focus on delivering better services to citizens. In healthcare, as in other parts of service delivery, the starting point should be a customer service mindset. 

Governments are never going to replace – and nor should they – the clinical decision making and care provided by healthcare professionals.  But there is no doubt governments, both state and federal, are major players in the end to end customer service experience which Australians face as they interact with the healthcare system.  In turn this means governments can be major contributors to, or detractors from, the quality of the patient, or customer, experience. 

An excellent example of a customer service mindset being employed by government is the impressive work of the former New South Wales Coalition Government in establishing Service New South Wales, under the leadership of Minister for Customer Service and Digital Government, Victor Dominello.

Service New South Wales has become well known for its slick use of IT and digital tools, such as the apps it rolled out quickly during COVID. But as Victor is always the first to point out, the starting point was to ask how citizens could be served better through a customer service mindset.

Sadly under Bill Shorten, the service levels delivered by the analogous federal agency Services Australia are lagging well behind – and getting worse. 

Take for example the time it takes for a health provider to call up Services Australia. Under the Coalition, the average wait time to speak with someone was under 2 minutes for financial year 2021-22. In 2023-24, under Labor, the average wait time on the health provider line is over 5 minutes. If a health professional is placing a call once every 30-minute consultation over a 8 hour day, that’s 1 hour and 20 minutes on average lost each day just waiting to speak with someone.

Given the role that Services Australia has in Medicare payments and other aspects of the customer’s overall experience of Australia’s healthcare system, this is an area offering real potential for improvement. 

This brings me to the second principle I want to argue for: we need to look at the overall systems and see where there is scope for system improvement – bringing in turn an improved customer experience. As evidence of the need for improvement, consider this: currently only 53 per cent of PBS written authority items can be requested via digital channels. 

Another good example which highlights the scale of some of the issues is the report commissioned by the current Health Minister, Mark Butler, into Medicare fraud and non-compliance. 

This report was carried out by respected health economist Dr Pradeep Philip in 2023 and found that Medicare fraud and non-compliance is costing taxpayers between $1.5 billion and $3 billion a year.  As Dr Philip observed: 

the current system is overly fragmented, disjointed, and lacking in contemporary tools to detect and address non-compliance and fraud, despite the best endeavours of bureaucrats, regulators, and peak bodies.[4]

More than a year on, the Government is yet to provide a formal response to the report. 

A third principle I want to highlight goes back to the figures I cited about the number of small businesses in the health sector. I think it is important that we look for technology applications which make life easier, not harder, for busy healthcare professionals. 

Technology plays a big role in improving health outcomes, such as better experiences and satisfaction. But there are other benefits of technology for health practices, including helping to:

• streamline administrative tasks, leading to better efficiency
• automate processes and reduce paperwork, ensuring lower operational costs
• allow communication to flow more easily between healthcare providers, staff and patients
• gather and analyse data, providing valuable insights that help inform better decision-making
• give a competitive edge through more convenience and efficient services. As a result, this can help attract and keep patients.

The fourth principle I want to highlight is to align the use of technology to what patients – or customers – are doing.  We know that more and more of us are using wearable devices to track our heart rate and other metrics.  The use of wearables can allow patients to be at home, not in a hospital, or released earlier after a procedure.

The fifth principle I want to close on is the merit of taking a private sector approach to developing offerings which are attractive to customers and with take up on that basis, rather than imposing mandates and technology standards.

This has been the big mistake made by Labor with its digital identity legislation. It is locking out the private sector for at least two years. But private sector sales and marketing people know a lot more about how to get customer take up than bureaucrats in Canberra.

Conclusion 

Let me conclude then with the observation that the Coalition is committed to a stronger role for digital government.  This was a focus for us when last in power and will be a focus when we return to government. We think this offers many benefits, including serving citizens better, but also in capturing productivity improvements through the use of digital technology. 

The healthcare sector is a large part of our economy and it will continue to become ever more important.  The potential for digital technology to improve both the customer and the provider experience in healthcare is significant – both for the sector and the wider economy.

But we need to recognise that healthcare is special.  It is not like banking or other industries.  Many attempts to impose new technologies on the healthcare system have failed, often due to a failure to appreciate the unique organisational culture of healthcare. 

The Coalition sees an important role for improved customer service across the landscape of government – and given how big a part of that landscape is made up by the healthcare system, we certainly see opportunities in healthcare. 

Whether it is the experience customers have in lodging their Medicare claims through Services Australia, or the efficiency with which patient information flows between different parts of the healthcare system, there are real benefits available if we can make improvements.  But we need to start with making the case to both patients and providers.  Focus on customer service first – then work out where the technology fits in.   

[1] Productivity Commission, Leveraging digital technology in healthcare, May 2024

[2] www.digitalhealth.gov.au, D/L 29 Oct 2024

[3] Australian Digital Health Agency, Annual Report 2022-23, page 18

[4] Independent Review of Medicare Integrity and Compliance Final Report (Public Release) Dr Pradeep Philip March 2023, p 6