Barriers To Change In Healthcare

Healthcare is Australia’s biggest industry, accounting for 12.7% of GDP, or A$150 billion, with over 1.5 million people employed in healthcare and social assistance. That’s a big pie, however, you slice it.

However, the way it is currently sliced creates a huge number of problems. In healthcare, the idea of ‘growing the pie’ has not yet taken hold. Siloed thinking prevents innovation and improvement. Global spending on healthcare currently stands at A$11.1 trillion and, with an annual growth rate of 5-10%, costs are spiralling. If we are to reduce spending, minimise waste, and improve patients’ experiences and outcomes, then change needs to come. In every area of the industry.

The innovations to help create these changes are there. There’s no doubt about 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 lose millions.

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 a ‘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 huge amount of waste is generated and very little progress is made.

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, with no guarantee of a return, if the drug or treatment is not approved, is nowhere near as attractive as the quick turnaround times and low-risk products many other industries offer to venture capitalists.

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 the support and advice that gets products over the line. 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 in order to get everyone on board, the approach needs to change.

Innovators need to take a holistic approach that demonstrates to organisations, doctors, patients, and insurers that the improvements they are bringing to the table are cost-effective. Additionally, they need to show policy-makers and regulators that the products are effective. And they need to tie everyone together by demonstrating that their innovations are safe.

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.

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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