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General hospitals on the way out !

Securing the future funding of our
own hospital in Maleny.

with Stephen Alexander.

Stephen Alexander is an advisor to government and industry as well as a social commentator.

His previous articles interoperating the impact of global issues including healthcare on the Maleny community can be found on his blog

Published January 2013

Both welfare and private based healthcare systems in the western world cannot and will not deliver on the promises, expectations or predicted requirements of an aging population. This is due to the simple fact that no government or insurance company anywhere in the world can reconcile the two opposing forces of escalating costs and restricted expenditure.

One of the consequences of governments rationalizing health care funding is to treat patients with acute conditions in large centralized metropolitan hospitals to maximize efficiencies. But with the cost of managing a single bed in these highly resourced environments exceeding $10,000 per night, cost savings have to be made. This involves rationalizing medical procedures, introducing hospital avoidance programs and reducing the number of the smaller general hospitals by keeping people in their own beds.      The UK is driving the changes, many of which are now being adopted in Australia. For example, the workforce and the management of hospitals are now being outsourced to multinational organizations like UK-based Serco who already operate our detention centers.

The UK Guardian newspaper recently quoted a senior National Health Service executive who warned that the public need to accept the closure of many hospital units and live healthier lives if they want the health service to survive. Hospitals will have to provide fewer services and beds if the NHS is to cope with growing demand caused by the aging population, warns Mike Farrar, chief executive of the NHS Confederation, which represents hospitals.

Health professionals must do more to keep people out of hospital and treat them in or near their homes, while politicians should back the urgent and far-reaching changes needed to keep the NHS sustainable rather than joining protest marches, he added.

Again due to the lack of available budget by treasury the funding of these new metropolitan hospitals often comes via a public-private partnership model with a consortia that also operates them offering both public and private services. In some cases in the UK existing hospitals are effectively given over to these groups if they undertake to provide an agreed level of public funded services.

The notion of the corporatization of the welfare state was explored by Margaret Thatcher in 1982 where newly released Downing Street documents show proposals considered by her cabinet. These included compulsory charges for schooling and a massive scaling back of other public services. "This would of course mean the end of the National Health Service," declared a confidential cabinet memorandum by the Central Policy Review Staff. One document noted "It is therefore worth considering aiming over a period to end the state provision of healthcare for the bulk of the population, so that medical facilities would be privately owned and run, and those seeking healthcare would be required to pay for it.”

In Australia our own shift in policy towards “shared responsibility” will have the effect of requiring us to stay in our own our homes to manage a chronic condition or stay in our own beds when it becomes acute.

With no increased funding set aside for the required army of nursing and care coordinators the burden will fall upon family and community members. In the case of dementia, which is now the fourth leading cause of death, this task equates to one full time job shared by anyone who can afford the time and is willing to commit.

Whilst many regional communities will struggle to keep their hospitals funded Maleny has a strong history of community partnership with our own hospital and a close-knit network of care givers and medical professionals. But this alone may not be enough to justify treasury singling it out for special treatment when the inevitable rationalization and closures occur in our own cash strapped state.

The challenge for Maleny will be to consolidate its capacity to collaborate and define a financially sustainable model that leverages the existence of our hospital within the context of our aging community from a health and welfare perspective.

This will have to clearly demonstrate its true broader value to the community’s ability to be more resilient to shock and to have greater self-reliance which, in turn, must be a measurable and deliverable benefit to treasury itself. This is where it gets tricky because treasury logic is hard to comprehend even by seasoned politicians because they tend to view value in terms of immediate cost cutting rather than taking a long-term more holistic view where the interdependencies of the broader community are factored into an equation.

Most people in Maleny would have experienced through friends or family the remarkable level of care, compassion and service delivery from our local hospital. But having an inherent sense of the tangible value to our families and care givers of having our hospital on the Range will not assist a treasury official or any of the external advisors who may determine the fate of our hospital. Prof. Ricky Richardson, Consultant Paediatrician & Physician, Great Ormond St. Hospital, UK delivered a keynote at CHIK Services’ Health-e-Nation 2012 conference on the Gold Coast where he predicted the end of all general hospitals.

We ourselves would have to make a case for any additional funding based upon the verifiable value to each party of adopting a model that increases the level of collaboration whilst at the same time delivering the policy aspirations of keeping our aging population out of the centralized hospitals.

The obvious challenge in Maleny is how to demonstrate cohesion across the majority of the various factions who traditionally do not see eye to eye on many matters and then to convince the politicians and bureaucrats that we have a workable model that could be copied elsewhere. The obvious risk is that any leadership would have to genuinely represent all of the interests within the broader community because any proposed model would have to clearly demonstrate the full commitment of each dependent party or group to the adoption of the proposals.

Interestingly, most seasoned commentators such as Sir Muir Grey at the NHS in the UK suggest that this type of innovation and change will be driven by the health consumers themselves rather than the health administrators or clinicians. This driver is already manifesting itself via geographical communities often led by local government and chronic disease internet based support groups who today can provide more information about managing a persons condition than is available to a busy general practice.

Much debate in the UK, USA and Australia has already taken place around the best legal structure for managing healthcare at a regional and local level with cooperatives, quasi-autonomous non-governmental organizations (quangos) who are financed by government all the way to fully corporatised for profit bodies. These include Super Clinics, most of which and like normal general practices are for profit corporate structures, Medicare Locals including our own Sunshine Coast Medicare that co-ordinates with the Maleny Hospital and Local Hospital Networks to help deliver specialist services, which include Nambour hospital tend to be not for profit or quangos. In the UK the government has set up a new category of corporate structure that is a not for profit and in some ways mimics a cooperative structure.

But to date not one of the models in Australia can continue current operations without the funding that we can no longer rely upon without developing ways to reduce the cost burden of the aging population.

I will conclude using the following quotation to illustrate that delivering health value outcomes for less cost to the treasury can be achieved in a community setting, if the community itself can discover a way to unlock the value of greater self-efficacy and by sharing our collective resources and knowledge.

“Value in any field must be defined around the customer, not the supplier. Value must also be measured by outputs, not inputs. Hence it is patient health results that matter, not the volume of services delivered. But results are achieved at some cost. Therefore, the proper objective is…patient health outcomes relative to the total cost (inputs). Efficiency, then, is subsumed in the concept of value. ”

Source: Porter ME. (2008) What is Value in Health Care? Harvard Business School

Stephen Alexander is an advisor to government and industry as well as a social commentator. His previous articles interoperating the impact of global issues including healthcare on the Maleny community can be found on his blog

Other links

Published on 8 Jul 2012

Jane Halton PSM, Secretary, Department of Health & Ageing delivers her keynote address at Health-e-Nation 2012, held on 28 March at The Royal Pines Resort, Gold Coast, Queensland.

Published on 8 Jul 2012

Archbishop Desmond Tutu opens the Health-e-Nation conference via video presentation. Mr Tutu talks about the need for global cooperation to meet global healthcare goals.

The Hinterlandgrapevine thanks Stephen Alexander for his insight into the future of health care, especially in our area.

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