Health Innovation Communities

Nothing better illustrates ‘being in love with the problem’ than the familiar tale told at most health conferences in Australia.

One inevitably hears that to address the well-known problem of healthcare financial unsustainability, we must address the equally well-known structural problems in the health system that mean we spend too much on expensive hospital-based care — and not enough on non-hospital services that would prevent unnecessary hospitalisations.

The real problem, we are also told, is that the rigid Medicare and regimented private insurance systems mainly pay doctors for one-off appointments, tests, and procedures; there is no scope or flexibility to develop alternative, cost-effective models of integrated healthcare — especially for chronically ill patients — that could lower costs and improve patient outcomes.

Yet despite all the talk about the problems, no one ever comes up with real solutions: a politically-feasible — and potentially bi-partisan — reform strategy to generate much-needed innovation in the health sector, and deliver better value for money and more sustainable healthcare.

Until now.

The new report published this week by the CIS Health Innovations Program argues that the way to overcome the toxic, ‘Mediscare’-style politics of health is to establish ‘Health Innovation Communities’ (HICs).

Within certain geographic regions declared to be HICs, healthcare providers could apply for exemptions from existing Medicare and private health legislation, and be allowed to create and use alternative payment and service delivery models that are currently banned. Exempt providers could then recruit individuals who wish to voluntarily opt-in to receive integrated care.

Importantly, the current Medicare and private health insurance arrangements of the vast majority of the population will stay the same. But at the same time, HICs will operate as ‘Silicon Valleys’ catalysing the development of novel healthcare products.

Once we discover what works to make healthcare more cost-effective, we can then start loving the real solutions for the problems with Australian healthcare — and start talking about rolling these solutions out across the whole of the health system.