The productivity gap Down Under

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Reflecting on the long journey back to England after speaking at the Australian Healthcare and Hospitals Associations (AHHA) conference in Adelaide I concluded that there are great similarities between these two health systems on opposite sides of the world. But in terms of economic context and, in particular, the productivity challenge they face, they are poles apart.

Both health systems are facing complex reforms driven by minority or coalition governments. In England the reforms focus on devolving decisions about the use of health care resources to the clinical front line. In Australia the creation of local hospital networks and local primary care organisations ('medicare locals') are part of a radical move to create a more rational and responsive structure. Different reforms, but they do have similarities.

First, the proposed reforms in both countries seem to have been designed to solve problems associated with elective secondary hospital care provision, when in fact the principal challenges of both systems are associated with the management of older people with long-term conditions and complex co-morbidities.

Second, both set of reforms purport to support decentralisation and devolving of power, but in practice could result in even more concentration of power at the centre. In Australia this is because there will be a greater concentration of the control of funding and system regulation at federal government level; in England the potential strategic weakness of smaller GP commissioning consortia could result in more power being concentrated in the new National Commissioning Board.

However the context is different; Australia's economy is booming and the main challenges affecting system managers are recruiting sufficient staff and constraining burgeoning pay levels. No one at the AHHA conference mentioned the need to improve productivity. Contrast this to the situation here in England where improving productivity is now the prime focus of all NHS managers. Most of these managers are now wishing, with hindsight, they had used the growth of the past decade to improve NHS productivity as well as using funding to improve quality.

In the long term the real challenge for all health care systems is to create the incentives to consistently improve productivity, not just when resources are under pressure.



Comment date
21 January 2011
This is an interesting perspective that was spolied by a disappointing side swipe. I think that it is incorrect to say that managers didn't use the opportunity to improve productivity during the growth years. It takes more than a management team to change a culture and random interventions from national or regional leaders to advance waiting times targets for example created an enviroment where the way to be successful was to buy clinical co-operation rather than improve services through challenge and redesign. Quality in healthcare has seen significant improvement particularly when managers and care professionals work closely together to improve the patients experience of care. We will need to guard against trading productivity for quality over the next decade.

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