Barriers To Change In Healthcare

Healthcare is Australia’s most significant industry, at 12.7% of GDP (~A$150 billion), with over 1.5 million people employed in healthcare and social assistance. That’s a big pie; however, you slice it. Global spending on healthcare currently stands at A$11.1 trillion and, with an annual growth rate of 5-10%, costs are spiralling.

Unfortunately, the way it is currently sliced creates a huge number of problems. In healthcare, siloed thinking prevents innovation and improvement. If we are to reduce spending, minimise waste, and improve patients’ experiences and outcomes, then change needs to come. The disruption to our industry presented by COVID-19 is forcing change, and we need to ensure it makes sense now and after this threat has passed.

The innovations to help create these changes are there, often in other industries. There’s no doubt that the investment is also there: Money is poured into research and development. But the way the industry is structured means that innovations are often doomed to failure, and investors have lost billions (especially in the US).

So if the innovations are there and the funding is there, what’s going wrong?

The biggest problem is that rather than all the players pulling in the same direction, everyone has their own agenda. It’s an ‘us-and-them’ culture that sets doctors against administrators, insurers against technology providers, inpatient hospitals against outpatient services, and public against private. When everyone’s grabbing what they can, it’s no surprise that a massive amount of waste is generated and very little progress is made.

Even with the common threat of COVID, siloed thinking and self-interest intermittently come to the fore. To complicate things further, allegiances can shift and change, making it extremely difficult for innovators to understand what they need to do in order to keep everyone onside.

This is often exacerbated by the type of funding that is made available. Long-term investment in biotech firms has no guarantee of a return if a drug or treatment is not approved. This is nowhere near as attractive as the quick turnaround times and low-risk products many other industries offer to venture capitalists. Encouragingly, some big firms have put substantial sums to the common good, whether improving communications, physical, mental and monetary support for those affected, and/or research.

Those investors who do take the plunge and put their money into healthcare often have no knowledge or experience in the industry and are therefore unable to provide support and advice to gets products over the line. A focus on the short-term often results in monetary considerations over-taking healthcare considerations. The universal threat that is COVID may help to turn this tide.

If a new drug or therapy does make it past the regulators, then there are still more hoops to jump through. For instance, doctors need to recommend products to their patients, and insurers need to approve the pricing. However, by trying to keep one group of people happy, innovators can unwittingly find themselves facing the disapproval of other essential players.

Rather than continuing to divide up the pie piece by piece to get everyone on board, the approach needs to change. 
Colin Mellon, Fiserv’s Senior Vice President of Healthcare Solutions, noted during On The Agenda Digital Roundtable about the future of healthcare in the United States that a fair amount of remarkable decision has happened in the last two weeks. Decisions that once took months and years into hours and days. “The ability for American commerce and American business and American healthcare to be agile and embrace technology, it shows we can make fast changes to make things better,” Mellon said.

While the rapid reset to thinking innovatively is present across all industries, it has been mainly on display in healthcare in both care delivery and payments operations that have been forced to embrace the importance of transitioning from the physical to the digital world.

Emphasising the common aim of everyone in the industry, which is to deliver the best possible care to patients in the most cost-effective way, breaks down the barriers and gives innovators the opportunities they need to create the changes that healthcare so desperately needs. We see this in response to COVID – may it continue with tackling risk, cost and the poor consumer (and worker) experience of much of healthcare today. The situation is changing rapidly but perhaps, more importantly, what is happening now has the potential to change the direction of healthcare going forward — for the better.

For further reading on hospitals and institutions that have succeeded in change, please visit:

Peter MacCallum Cancer Centre –
Virginia Mason Medical Centre –

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