If we listened to what patients are experiencing, at scale, we can move from measuring success on volume to what matters most – the value care brings to patients' lives.
Australians are rational, if not discerning buyers. If they pay for anything essential – groceries, fuel, education, healthcare – they want to know it delivers value to their quality of life and household.
But in healthcare, this isn’t how we have historically measured success or progress. Instead, we rely on simpler metrics – cost per episode, fee for service.
Consider the recently discussed private national efficient price reforms, which again pegged innovation to price per service rather than value to the patient. The Department of Health, Disability and Ageing’s fresh batch of reforms look promising, and is another chance to shift focus from more dollars and services towards what actually lifts patient value and our sector.
Private health service measurement has to date provided an incomplete picture of success in Australia: we know the functional outputs – what’s done for patients – but not how patients feel and live afterwards.
If a patient undergoes a clinically “perfect” spinal surgery according to their surgeon’s assessment, this is recorded as a 100% success under the currently used model. But, six months later, if their pain is unchanged or worse, we don’t capture it.
Ineffective and unnecessary care acts as an invisible tax on Australian private health premiums, and with around 15 million Australians holding some form of cover, the cumulative cost of less-than-optimal care is significant, both financially and personally.
Like any industry, private healthcare gets better with feedback. Yet the patient voice isn’t as integrated as it could be, and many patients dismiss their experience as too small to trigger system-wide change.
The fact is, direct patient experience data – the “exit polls” of health services – are the missing link industry and government need – to hear people’s views en masse, change tack if necessary and improve.
For now, few players leverage this resource, with only a fraction of all private patients feeding back across a handful of independent surveys. Nevertheless, the dataset AHSA runs – some 120,000 patient responses across hundreds of hospitals, independently benchmarked – points to something simple: listen at scale, and care improves.
One in two patients want their say when AHSA offers them the opportunity – a strikingly high rate by the standards of these surveys internationally. And those insights are changing how hospitals deliver care, and how payers and providers collaborate and negotiate.
Also in today’s edition:
- Victorian government appoints Board Monitor to oversee Cohealth
- Office of AI welcomed, but healthcare needs its own focus, says Enrico Coiera
- New aged care act has failed on its promise: Siegel-Brown
- Interoperability is now ‘baseline hygiene’, not a trade-off, says ADHA
- Highest-paid healthcare CEOs revealed as US executives dominate ASX rankings
Recently, one large hospital operator tied part of its funding directly to what patients report about their care – paid not on activity alone, but rewarded if patients told AHSA (and subsequently the hospital) their experience and outcomes had genuinely improved. The hospital then redesigned pre-admission so patients understood the journey ahead, sharpened communication during the stay and after discharge, and included patient advisers in care planning.
The scores climbed and the hospital saw financial upside. Value rewarded – not volume.
But what if this scale of feedback was in the millions – closer to the real volume of private services administered every year? What if the experience of patients for even half of the 4.8 million hospital episodes were captured? What could we change?
This is where the affordability dividend lies.
By some estimates, up to a third of healthcare services in Australia offer limited or no value, and the Australian Institute of Health and Welfare (AIHW) says potentially preventable hospitalisations cost over $7 billion every year.
At the same time, many people are still seeing preventable readmissions, driving up service costs – whether due to an evolving condition, being underprepared for surgery, confused about discharge, struggling with recovery, care that falls short, or hit by an adverse event.
Conversely, having a feedback loop with patients identifies what drives adherence, improves continuity of care and flags early warning signs sooner after discharge.
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By listening to what patients are experiencing at scale, we stand a real chance of stripping those ineffective inflationary costs out of the system, redesigning care pathways, giving clinicians longitudinal insights to personalise treatment and improving the value proposition of private healthcare at large.
We’d move from measuring success on volume to what matters most – the value care brings to patients’ lives. We’d write the patient voice into the definition of successful clinical delivery, catch the symptoms and quality-of-life impacts that biomarkers miss, and stop paying for treatments that don’t work – redirecting spend to care that does.
This is the next real step for private health: not more services or lower unit prices, but care measured by what it delivers for patients.
We simply need the will to listen.
Andrew Sando is the CEO of the Australian Health Service Alliance, one of the country’s largest group health services purchasing agents representing member-owned/not-for-profit health funds. He is heavily involved in funding negotiations with private hospital operators, nationwide.