Consumers, Regulationand Change

Grahame Danaher

Chief Executive Officer

Westfund Health

13th Annual Health Insurance Summit

“… there needs to be a frank, fearless and far reaching

discussion on our health system”

“… our health system has no prospect of meeting the

needs of the health of our nation in the 21st century!”

Address by the Minister for Health, Peter Dutton, to CEDA

Conference, February 2014

The Case for Change

Our Health System is like a Mercedes

450 SEL

Like the 450 SEL, our

system was great in its

time but it would not meet

today’s expectations.

The Minister is saying that

our system needs to get to

the next level – quickly.

Preventative health

Pain reduction

Immediate and appropriate treatment

Longevity

What is the formula for health

happiness?

Key factors affecting better health:

Unhealthy stress

Smoking

Lack of exercise

Better nutrition

Co-morbidities (diabetes, asthma)

Our system supports sickness

insurance - not health insurance

Hormone profile

Muscle mass

Lack of sun exposure

Lack of sleep

Poor dental hygiene

The key roadblock to health happiness

Are Doctors remunerated appropriately?

Does their remuneration model encourage better health

outcomes?

Would an alternative remuneration model push treatment

programmes that assisted health happiness?

Can you have improved financial performance AND improved

health outcomes?

Encouraging healthy outcomes

Can we finance health outcomes more efficiently by

focusing on health happiness?

Capitation AND fee for service seems to make sense

as a remuneration model

Does this model help our system focus on health

happiness?

How could it work?

A remuneration model that drives

dental “happiness”

Westfund operates two dental practices in regional

areas (Lithgow, NSW and Mackay, Qld) treating 650

patients a week.

It provides a preventative/minimally

invasive approach to treatment

programmes.

A preventative approach sees eradication of

dental disease.

A remuneration model that drives

dental “happiness” continued

The preventative philosophy is driven not only by the

stated philosophy but by the way our dentists are

remunerated.

Our dentists are paid by capitation (payment per

patient seen) and fee for service. They receive above

average earnings which capitalises on the efficiency of

treating a large number of patients instead of a small

number of patients with expansive treatment

programmes.

It is hard to change

unless you have

support and incentive to

change your behaviour.

Turning Sickness Insurance into

Heath Insurance – 8 ideas for change

Manage unhealthy stress by giving people information and

incentive to create a more hopeful future.

Smoking is still a major health issue so why don’t smokers pay a

higher premium? It is an effective deterrent of the government’s

programme to reduce smoking.

More and better education about what is good nutrition (some

governments overseas have banned trans fats from restaurants).

Co-morbidities (Diabetes, Asthma) – are we assisting co-

morbidities as well as we could? Are our testing and screening

programmes appropriate for early detection and

management?

8 ideas for health insurance

Muscle mass – better management will certainly delay the onset

of osteo-arthritis and/or other skeletal problems.

Adequate levels of sunshine – how does this play into worldwide

Vitamin D deficiency?

Lack of sleep – around 1 in 3 people have at least mild

insomnia. Do we have adequate programmes to deal with sleep

depravation?

Dental hygiene – over 75% of Australia’s population suffers

dental disease (largely preventable by visiting the dentist

regularly).

8 ideas for health insurance

Patient treatment. The system generally treats us very

well when we are ill.

We are generally happy with our general care, our

nursing care, the administration associated with our

care, and the outcome of our care.

We are not so happy about waiting times and the

things we would like to have fixed and medical gaps.

Better health

Do health funds know what health outcomes their

members want?

Health funds cannot survive by simply collecting

premiums and paying claims. There need to be

significant programmes that support health happiness

which can be determined by how we remunerate our

doctors but will doctors survive under the current

remuneration model from which they operate?

Are health funds financing the care its

members need?

Minister Dutton is right in saying private health funds could

do more.

The Government needs to be more proactive in supporting

deregulation while maintaining community rating.

The health industry needs to share more in the community interest

and with less self interest to build a sustainable health system. This

can begin if we concentrate on what people need to have to generate

health happiness.

Conclusion

Grahame Danaher

Chief Executive Officer

Westfund Health

13th Annual Health Insurance Summit