Webinar: Can new payment models support the provision of value-based healthcare?

The fifth webinar in the PCHSS 2020-2021 webinar series was on whether new payment models support the provision of value-based healthcare.

Event summary:

With the rising costs of healthcare, health systems are looking for ways to incentivise high-quality care while keeping costs down. So, does paying healthcare providers for their performance improve value for money and hold providers accountable? Although high quality evidence remains scarce, the key messages remain consistent over time. Different payment methods, in the right context, can influence clinical behaviour in desired directions but require careful design.

In this webinar, Professor Tony Scott summarised new evidence from two recently published systematic reviews on the impact of different payment methods for healthcare providers. These reviews found that pay for performance blended with existing payment methods may increase some preventative care measures, whilst higher fee for service payments increase the quantity of care, but not necessarily the quality of care.

Following Professor Scott’s presentation there was a panel discussion featuring Dr Michael Wright (RACGP) and Mr James Downie (IHPA). The session was moderated by Associate Professor Yvonne Zurynski (PCHSS).


Professor Tony Scott

Anthony Scott is the Health and Healthcare Program Coordinator at the Melbourne Institute. He is a Fellow of the Academy of the Social Sciences in Australia, immediate past President of the Australian Health Economics Society, and a Board Director of the International Health Economics Association. He established the Medicine in Australia: Balancing Employment and Life (MABEL) panel survey of 10,000 doctors and is a Research Lead Investigator in the NHMRC Partnership Centre for Health System Sustainability.

Dr Michael Wright

Dr Michael Wright is a GP and health economist. Dr Wright currently works as a portfolio GP, combining clinical practice with strategic appointments and academic research analysing the effects of current health policy on the quality and performance of primary care. Dr Wright is currently board chair of Central and Eastern Sydney Primary Health Network, and also chairs RACGP’s Reference Expert Committee on Funding and Health System Reform. Dr Wright previously worked in London as a clinician, a Leadership Consultant with The King’s Fund, and was a researcher at the London School of Hygiene and Tropical Medicine. Dr Wright completed his PhD at the Centre for Health Economics Research and Evaluation (CHERE) at the University of Technology Sydney (UTS) in 2019. His PhD investigated the impact of continuity of general practice care on health outcomes, and his research interests including health funding and health policy research into quality, efficiency, and sustainability of health services.

Mr James Downie

James Downie is the Chief Executive Officer at the Independent Hospital Pricing Authority. Prior to his current role James was the Executive Director, Activity Based Funding, leading the teams responsible for delivering the classification, costing and pricing functions of IHPA as well as the data acquisition activities. He previously held roles with the Victorian Department of Health, the Royal Children’s Hospital Melbourne and various technical and operational roles in the resources industry.

During the session, the speakers received several questions from attendees and they provided the following responses:

The obvious challenge in Australia is the fragmented payer scene based on provider role. Do we need to move to single payer?

Mr Downie: There are a lot of examples around the country where people are able to provide good, high quality coordinated care despite the funding models and we have to be careful that we don’t treat funding models as the be all and end all. The funding model won’t drive value-based care but will support it. IHPA focuses on removing barriers and ensuring that funding models don’t impact care.

Professor Scott: A few years ago there were white papers produced looking at reform of the federation, which was the closest that we have come in Australia to shifting models.

Dr Wright: It is difficult. The new national health reform agreement suggests that there is going to be jurisdictional cooperation in integrating the system. There are areas such as collaborative commissioning, which is where primary health networks are partnering with local health districts to identify a priority with shared funding and shared priorities.

Specialist MND multidisciplinary clinics have proven to be improve health outcomes and extend life, but how do you fund all HCPs privately in these clinics if health sector not engaging with this integrated care model – silo funding models Medicare, NDIS, Medicare chronic and complex care plans, private health funds are difficult to process separately for each participant?

Mr Downie: It is a good example of where some funding reform- something from the hospital side- can really make a difference. Being more agnostic about provider and move to a capitation type model does allow potentially hospitals to purchase services from GPs and other private practice. Compared to hospital admissions GP services are very economic; you can buy a lot of GP services for the price of a single admission. We think that capitation and bundled models that give providers more flexibility about where/who they purchase services from will start to remove some of those barriers. The view that everything has to be fee for service or through hospital funding is becoming outdated.

It would be interesting to compare generational difference. Do doctors who received free medical education act differently to those who graduate with a large financial burden?

Dr Wright: There are some generational differences. Medical students know that GPs are the lowest remunerated doctors on average within the health system, and the disparity between GPs and other specialists is growing is having an impact on the workforce. About 10 years ago there were ~100 more specialists than GPs, now that number is in the thousands. We have more and more specialists and less GPs at a time when we have more chronic disease and multi morbidity that should be managed in general practice.

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