Private Health: - A Provider ViewA QUESTION OF BALANCE

Overview • About Cabrini• The Big Picture• Our Health

Economy• Competition,

collaboration & conflict;

• The Future

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ABOUT CABRINI

Cabrini – Who we are

uGeography – Melbourne onlyuPhilosophy – Catholic, not for profituService Complexity – HighuService Range – WideuMarkets – MultipleuCompetition – StronguChallenge – Balancing mission and marginuPersonality – collaborative, innovative, willing.

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ABOUT CABRINI

What we do• Acute care – elective and

emergency;

• Post-acute care;

• Residential aged care;

• Out of hospital care

• Diagnostics and Pharmacy

• Cabrini Institute

• Cabrini Technology Group

• Cabrini Linen Service

• Cabrini Foundation

• Social and Community Outreach

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ABOUT CABRINI

How much we do

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THE BIG PICTURE

The Big Question – where too next?

Australian  Prudential  Regulation  Authority  -­‐ http://www.apra.gov.au/PHI/PHIAC-­‐Archive/Documents/PHIAC-­‐Annual-­‐Report-­‐2013-­‐14.pdf

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Hospital coverage by number of insured persons, 1971 to 2014

THE BIG PICTURE

Critical DisruptionsThe Five Forces Shaping Health Care’s Future

u The Greying Patient (and Provider)u The Lifestyle Epidemicu The Information Revolutionu The Blessing and Curse of Clinical

Technologyu The New Health Care consumer

Source: The Advisory Board Company – Research Briefing – Five Disruptive Forces Affecting Health Care, Washington USA 2014

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THE BIG PICTURE

Service Utilisation a big challenge8

Grattan Institute, 2015, Fiscal Challenges for Australia

THE BIG PICTURE

Service Redesign Challenge9

THE BIG PICTURE

Value – Why Insure?

uControl and Choice uAccessuQuality and amenityu“Peace of mind”uAvoidance of tax-related financial penalties;uAncillary servicesuSome believe it’s “the right thing to do”

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Lewis, Wills & Franklin, 2015

OUR HEALTH ECONOMY

The Value Proposition

uDecision 1 – do I take out private health insurance? If yes, go to decision 2.

uDecision 2 – which insurer will I use, and what level of insurance cover will I take out?

uDecision 3 – which doctor and which hospital will I use?

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INSURER VIEW

PROVIDER VIEW

OUR HEALTH ECONOMY

Melbourne Privates12

OUR HEALTH ECONOMY

Melbourne Publics13

OUR HEALTH ECONOMY

Victorian Privates14

Gippsland

Barwon  South  Western

Grampians

Loddon  Mallee

Hume

St  John  of  God  Health  Care,  BallaratBallan  District  Health  &  Care

St  John  of  God    Health  Care,  WarrnamboolCobden  District  Health  Services  Inc

Geelong  Private  HospitalThe  Geelong  Clinic

St  John  of  God  Health  Care,  Geelong

Warley  Hospital  Inc

Maryvale  Private  Hospital

Neerim  District  Soldiers  Memorial  Hospital  IncHeyfield  Hospital  Inc

Euroa  Health  Inc

Yackandandah  Bush  Nursing  Hospital  Inc

Murray  Valley  Private  Hospital

Wangaratta  Private  HospitalShepparton  Private  Hospital

St  John  of  God  Hospital,  Bendigo

Sea  Lake  &  District  Health  Service  Inc

Mildura  Private  Hospital

Nagambie  Hospital  Inc

0 50

Kilometres100

Metropolitan map

including  Department  of  Human  Services  regional  boundaries

Department  of  Human  Services  regional  boundariesbased  on  Local  Government  Areas

Australian  Standard  Geographical  Classification  1  July  2004Hospitals  current  at  26  August  2008

Regional  Victorian  private  hospitals

OUR HEALTH ECONOMY

Product Differentiation:Our Customer Service Wedge

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Frei, Frances, Moriss, Anne; 2012

COMPETITION, COLLABORATION, CONFLICT

Competition in action

uDoes health service competition…u Improve consumer choice? - YESu Improve doctor amenity? - YESu Drive efficiency and reduce cost?- NOT OFTEN ENOUGH!

uSome examplesu New hospital developments – brown fieldu New technologies – robotic surgery.

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COMPETITION, COLLABORATION, CONFLICT

Merits of Collaboration

uFragmentation and dis-integration the major barrier to designing better health services;

uMany different elements of the service systemu Primary careu Publicsu Local government

uWorking with public sectoru Benchmarkingu Workforceu Clinical services improvement.

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COMPETITION, COLLABORATION, CONFLICT

Perils of Conflict

uShared motivationsu Excellent Patient Experienceu Efficiency and cost containmentu Sustainable health economy.

uAreas of conflictu Scope of cover eg Emergency, Palliative Care, Chronic Dis

Programs, HITH & TITH;u Payment, auditing and revenue gouging;u Safety and quality – the car analogy.

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COMPETITION, COLLABORATION, CONFLICT

Silly comparisons19

Member/Patient

Private Provider

HealthInsurer

PatientExperience

&Value

Insurance Choices and

Cover

Clinical Choices and Care

Service Payment and

Improvement

THE FUTURE

Private Health Relationships20

THE FUTURE

Providers and Patients

uFocus on the homeu Biomedical and assistive technologies

u Information Exchange platform;u Integration of care

u With primaryu Between private providers;u Between public and private.

u Information transparency and disclosure;uStandardisation of careuRewards for healthy lifestyle.

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THE FUTURE

Some other players

uDoctorsu Increased numbers, increased specialisation;u Workforce reformu Greater disclosure and transparencyu Increased regulation;u Shift from VMO to salary

uRegulators u Busier than ever!u Drive for public disclosure, informed consumer.u Cyber-security of paramount importance.

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THE FUTURE

Providers and Insurers

u Shift to local economy focus, health services research;

u Blended payment systems;u Packages of care;u Extension to primary care integration;u Information Exchange, shared informationu More effective rationing

u Negotiated service and/or revenue caps;

u Move from safety focus to outcome focus.

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THE FUTURE

New Payment Models

u To earn revenue, we admit patients;uNo effective cap or price signals to doctors or

patients;u Ineffective as incentive to manage complex

patients;uNeed more bundling;uNeed more capitation;uShift risk for managing complex clinical care

models to providers – its what we do.

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THE FUTURE

Insurers and Patients

u Information transparency;uAway from acute towards population health;uPackages of care for complex patients;uProduct simplification;uAdministrative simplification.uMove to risk rating

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THE FUTURE

Cabrini Strategic Response

u Consolidate current market position;u Innovate and diversify business lines.u Information systems to improve clinical practice and

efficiency.u Advocate for area information exchange;u Invest in out of hospital services, esp care in the home;u Partner & collaborate with others in local economy:

u Other privates;u Publics;u Primary care (PHN)

u Workforce planning

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Conclusion

u Private health insurance of vital importance to private providers;

u The five disruptive factors will change the nature of relationships;

u Insurers and providers will become more responsive to patient needs;

u Information exchange and transparency of data will drive efficiency and practice improvement;

u There will be increasing involvement of primary care in private health

u Innovation and collaboration can protect the value proposition of private health.

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