By Jess Lawless
2nd Year Management Intern
Australia’s healthcare landscape is undergoing a transformative phase, marked by evolving disease patterns, increasing healthcare demands, and rising expenditures. The paradigm shift towards consumer-driven healthcare necessitates systemic incentives to facilitate the delivery of value-based care (Calder et al., 2019). Chronic diseases account for a significant portion of hospital admissions in Australia, posing substantial challenges to healthcare systems. The prevalence of chronic conditions, particularly among the aging population, strains the existing infrastructure, highlighting the limitations of the traditional activity-based funding model (Wickramasinghe et al., 2019).
Value-Based Care and its link to funding
Value-based healthcare emphasises patient-centric approaches to achieve sustainable health outcomes. By prioritising patient needs, enhancing care experiences, and promoting efficiency in service delivery, this model empowers both patients and healthcare providers (NSW Health, 2021). Despite its proven effectiveness, the current funding structure in Australia fails to incentivise the provision of value-based care, especially for chronic disease management. Value-based funding represents a departure from conventional fee-for-service models by linking reimbursement to the quality and effectiveness of care. Unlike traditional methods, which focus on service volume, value-based funding evaluates outcomes, patient satisfaction, and overall health improvements (Wise et al., 2021). By aligning financial incentives with positive health outcomes, this approach encourages preventive measures, patient engagement, and coordinated care.
The imperative for Australia to embrace value-based healthcare funding, particularly for chronic disease management, is evident. While various interventions have been proposed within existing structures, systemic reforms are necessary to achieve comprehensive value-based healthcare. Drawing from successful implementations globally, Australia can learn from initiatives such as pay-for-performance schemes in the UK and bundled payment programs in the US (Cutler, 2022). Several value-based funding models can be piloted within the current Australian healthcare environment, including pay-for-performance, bundled payments, and accountable care organisations. Despite challenges such as resistance to change and the need for standardised metrics, these models offer promising avenues for improving healthcare outcomes (Independent Hospital Pricing Authority, 2019).
The adoption of value-based funding represents a crucial step towards enhancing the quality, efficiency, and sustainability of healthcare in Australia, particularly in managing chronic diseases. By aligning financial incentives with positive health outcomes, value-based funding can drive meaningful improvements in patient care and contribute to the long-term viability of the healthcare system.
References:
Calder, R., Dunkin, R., Rochford, C., & Nichols, T. (2019). Australian health services: too complex to navigate.
Cutler, H. (2022). A roadmap towards scalable value-based payments in Australian Healthcare.
Independent Hospital Pricing Authority. (2019). Innovations in Health Funding- Global Horizon Scan.
NSW Health. (2021). System priorities for value based healthcare research.
Wickramasinghe, N., John, B., George, J., & Vogel, D. (2019). Achieving Value-Based Care in Chronic Disease Management: Intervention Study.
Wise, S., Hall, J., Haywood, P., Khana, N., Hossain, L., & van Gool, K. (2021). Paying for value: options for value-based payment reform in Australia.