Healthcare Lessons From Down Under

Since speaking at the World Hospital Congress in Brisbane, Australia four years ago, I’ve kept a close eye on the country’s healthcare developments. In recent years—in Australia as in America—the frustrations of both patients and healthcare providers have intensified.

Although our two systems are funded and administered differently, I believe both nations can learn a lot from each other’s struggles and successes. I had the chance to dive deeper into those comparisons this week as a keynote speaker for the Back on Track virtual conference, hosted by Private Healthcare Australia and its outstanding CEO  Rachel David; and organized by Brooke Swartz of FTI consulting.  PHA represents 97% of people covered by private health insurance in Australia and is actively seeking new models to improve healthcare financing and delivery.

For those unfamiliar with Australia’s healthcare system, here’s a helpful breakdown from The Commonwealth Fund:

Australia has a regionally administered, universal public health insurance program (Medicare) that is financed through general tax revenue and a government levy. Enrollment is automatic for citizens, who receive free public hospital care and substantial coverage for physician services, pharmaceuticals, and certain other services. New Zealand citizens, permanent residents, and people from countries with reciprocal benefits are eligible to enroll in Medicare. Approximately half of Australians buy private supplementary insurance to pay for private hospital care, dental services, and other services. The federal government pays a rebate toward this premium and also charges a tax penalty on higher-income households that do not purchase private insurance.

Beyond the basics, Australia is facing many of the same challenges as in the U.S., with costs rising, doctors increasingly dissatisfied unhappy, and clinical quality stagnating.

To address these issues during the conference’s opening session, I joined a panel of excellent speakers: Geeta Nayyar, Chief Medical Officer at Salesforce, and Scott Bingham of FTI consulting, with Sophie Scott, national medical reporter for ABC in Australia, serving as the moderator. Together we fielded questions about the evolution of healthcare in a post-pandemic era. Here are some of the highlights from our session:

1. The role of telehealth. In every country around the world, virtual care represents a huge (and largely untapped) opportunity to improve care and lower costs, as I wrote about recently in the Harvard Business Review. During the conference, I spoke about five key opportunities to make telehealth to the next level—using it not just as a cheaper replacement for in-person visits but as a way to eliminate the traditional medical barriers of time, distance and expertise.
2. The need for a new model. Covid-19 shined a bright and unflattering light on the longstanding failures of American and Australian healthcare. In both countries, quality suffers due to a lack of integration and teamwork among physicians, along with financial incentives that prove counter-productive to patient health. The solution is bringing doctors and hospitals together to increase collaboration while ensuring payments (ideally: prepayments/capitation for care) drive the best results for patients.
3. Addressing physician burnout. Many physicians have suffered during the Covid-19 pandemic. Increasingly, the system of medicine—with its endless bureaucracy and administrative woes and clunky technologies—continues to frustrate physicians and stand in the way of better healthcare. But we mustn’t ignore the sometimes toxic culture of medicine, which often pits doctors of different specialties against each other, creating an unhealthy hierarchy that beats doctors down, particularly in primary care.

Our session concluded with a look at the challenges of implementing a more effective, patient-focused model of care delivery. I emphasized that the shift to a new model will require a change in how doctors are reimbursed (moving from fee-for-service to capitation), but it also will require a cultural change.

In physician culture today, doctors desire autonomy and independence, but patients need their healthcare professionals to collaborate, coordinate and agree on best practices. Mastery, once seen in medicine as the ability to do many things well, must take on a new meaning in the model of the future: it must focus on groups of doctors, all with deep narrow expertise in different specialties, working as one on behalf of patients with incredible consistency and precision. Finally, the purpose of medicine has been lost to so many physicians. In the future, the doctor’s purpose can’t be solely to reverse disease but it also needs to focus on preventing disease and maximizing the quality of people’s life.

In conclusion, I challenged the 500 or so participants attending the virtual conference to consider the following: If you were going to design a high-functioning healthcare system from scratch, how would you do it? Would you keep a system that is fragmented, paid purely for volume, dependent on outdated technology (like the Fax machine) or design it totally differently? Knowing that the answer was undoubtedly “no,” I concluded: “Then why would you hold onto the current system going forward?”

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Dr. Robert Pearl is the former CEO of The Permanente Medical Group, the nation’s largest physician group. He’s a Forbes contributor, bestselling author, Stanford University professor, and host of two healthcare podcasts. Pearl’s newest book, “Uncaring: How the Culture of Medicine Kills Doctors & Patients,” is available now. All profits from the book go to Doctors Without Borders.