Patient-centred health reform

As we assess the federal government's policy response to the challenges facing our health system it is worth considering first what are the objectives of health reform.

Too much of the present debate about healthcare reform focuses on the burgeoning cost of health care and concerns about the sustainability of ever-increasing public contributions. Originating in Intergenerational Reports that linked the cost increases to population ageing juxtaposed against a shrinking tax base, the debate is only now turning to the real issue: how to get better health outcomes and better value for the dollars we all pay in taxes or fees.

But what does "better value" mean in health system reform and why is it the objective we should be most focused on? The answer lies in delivering better outcomes, increasing greater accountability, reducing risk, and ultimately improving the effectiveness of the health sector by shifting the focus to patient needs.

The Prime Minister's announcement yesterday is an important step in shaping a better system to meet Australians' healthcare needs into the future. This is a major piece of the health reform puzzle.

It must now form the basis for a broader reform agenda that supports better governance of the entire health sector. Health must be seen as a critical area for microeconomic reform alongside other areas such as regulation and infrastructure.

Part of the challenge for would-be health reformers is that the Australian healthcare system is seen as one of the best in the world.

Over the past 30 years our life expectancy on average has increased significantly and the number of preventable deaths has fallen. We have managed these outcomes with expenditures that rank in the middle of the OECD field. But as many have argued, "good" is the enemy of "great".

We can do better and will need to do better if we are to maintain the advances we have achieved and spread them to those groups in Australia that have not shared in them.

It is not just that we will run out of money to fund a universal healthcare system.

It is more that the system is not well suited to the changing pattern of disease, and staffing shortages alone will dictate that we do things differently.

The demand for health care will continue to rise but the resources to supply the requisite services are finite, in terms of dollars and people.

Since 2009, the Business Council of Australia has identified healthcare reform as one of the essential areas of micro-economic reform to be tackled by Australian governments as part of their productivity agenda. Improving the health status of Australians and the cost-effectiveness - the value proposition for citizens and patients alike - of the healthcare sector are integral to improving Australia's productivity and achieving the economic and social prosperity we all seek.