New report reveals the benefit of a greater focus on out of hospital care

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Private Healthcare Australia has released a new report highlighting the potential gains from prioritising access to 'out of hospital care'.

The report, 'There’s no place like home – reforming out-of-hospital care', says refocusing Australia's health system on providing healthcare outside hospital settings will be critical to ensuring its long-term sustainability.

The association said the reforms proposed in the report would improve healthcare access, reduce the burden on hospitals and the public health system and deliver savings of $1.8 billion.

The report identifies models of out-of-hospital care that can be delivered now, ranging from short-stay surgery to mental health and substance use disorder management, short acute interventions like wound care and chemotherapy, to end-of-life care.

“Australia’s health system is under unprecedented strain, hospital waiting lists have blown out and consumer research confirms that people want more flexible healthcare options, including access to out-of-hospital care,” said CEO Dr Rachel David.

“We’re living in a new and rapidly changing environment, not only in terms of demography and technology, but societal expectations have shifted. Consumers are demanding and expecting different healthcare options, convenient care, which is often best delivered out of the hospital environment.

“Australia currently lags behind comparative health systems in the delivery of out-of-hospital care. This is despite increasing evidence showing the benefits of out-of-hospital models of care in terms of efficiency, quality, reduction of adverse events and patient experience. Patient outcomes are equivalent or improved compared to traditional inpatient models with reduced risk of hospital admission of up to 80 per cent and reduced readmission risk of up to 40 per cent.

“Yet out-of-hospital services in Australia account for 1-10 per cent of total activity across different models of care. For example, in the uptake of short-stay surgical models, the average length of stay for elective surgery joint replacements in Australia’s private system is 5.4 days compared with 1.9-2.8 days in Canada, the US, the UK and Scandinavia. Further, in Australia only 10 per cent of end-of-life care is delivered in the home compared with 41 per cent in the US and 56 per cent in the UK.

Dr David said there were implications for the broader health system.

The number of Australians over 75 is expected to reach 3 million by 2031-32. This will equate to 10 per cent of the population. This is expected to drive demand for an extra 1 million patient days in overnight private hospitals, an increase of 17 per cent relative to 2021-22. Similarly, in the public system, this same trend is expected to drive demand for approximately 3.1 million additional patient days relative to current levels, or a 15 per cent increase in total public hospital patient days.

“Without intervention, this additional demand will fall almost entirely upon ‘bricks and mortar’ hospitals, further exacerbating wait times and existing bottlenecks, in addition to cost inflation for public and private payors.

“Australian demand for flexible healthcare options is high, and private health funds are already taking action to increase access to out-of-hospital care, by improving funding models to better align with the incentives of health professionals to promote best practice, increasing funding or provision of care in line with global levels, and raising consumer awareness and education for out-of-hospital models of care. However, this alone is not sufficient to increase the uptake of out-of-hospital care at the scale or pace required to meet the needs of future demand on Australia’s private healthcare system," added Dr David.

Currently, private health insurance involvement in out-of-hospital care is restricted to funding or providing a limited number of hospital-substitute and chronic disease management programs. This limits patient access to high-quality care and restricts the choice of where they can receive services.

“Our health financing system was designed in the 20th century is not fit for purpose in the 21st century. Demand for healthcare is growing at an unsustainable rate, driven by the dual burdens of a rapidly ageing population and the rise of chronic disease, which places pressure on access to care and healthcare costs, for both patients bearing out-of-pocket costs and taxpayers more broadly.

“We can’t keep throwing money at the system to keep doing the same thing. We have to think creatively and do things differently. This means changing the way we fund health services to meet the needs of patients and those who treat them. We need flexible, contemporary, home focussed and virtual care models that make the most out of the available workforce."