Future Solutions for Australian Healthcare Health Insurance Summit 2014

Dr Avnesh Ratnanesan (Avi)

Founder & CEO, Energesse

Agenda

1. Understanding the Australian Healthcare ‘Eco-System’

2. Major System Challenges and Need for Reform

3. Specific Industry Challenges for PHI

4. Future trends and Solution Opportunities for PHI

5. ‘Future Solutions in Australian Healthcare’ White Paper

Understanding the Healthcare ‘Ecosystem’

Federal Government State Government

& Public Hospitals

Patient/Consumer

Not-for-

profit

Aged Care

Research &

Academia

Private Sector – PC & Hospitals

‘Ecosystem’ is interdependent

Federal Government State Government

& Hospitals

Aged Care

Research &

Academia

Patient/Consumer

Private Sector – PC & Hospitals

Major Challenges with Healthcare System

1. Growth in healthcare costs are ‘unsustainable’ - $140bil at 9.1% of GDP and outcome goals unclear

OECD Health Expenditure

Australia Health Outcomes

Health Growth Rate vs GDP

Actual Govt Health expenditure

Grattan Institute Report, adapted from The Conversation 24 April 2013

Major Challenges with Healthcare System

1. Rising costs are ‘unsustainable’ - $140bil at 9.1% of GDP and outcomes goals unclear

2. Ageing population – managing chronic disease and services

Chronic disease service load

Major Challenges with Healthcare System

1. Rising costs are ‘unsustainable’ - $140bil at 9.1% of GDP and outcomes goals unclear

2. Ageing population – managing chronic disease and services

3. Inequitable care – fragmented & uncoordinated delivery

4. Inefficient resource allocation – silo structures and culture

5. System driven by short term activity and measures, rather than outcomes

6. Significant portion of health outcomes is influenced outside the system

Dynamic consumer needs and expectations

Specific Challenges for Health Insurers

1. Rising costs of claims with stagnating traditional funding models

2. Regulatory restrictions prevent efficient management of member health pathways

3. Information asymmetry in clinical practice – variable protocols and moral barriers

4. Consumer disempowerment and complex behavioural drivers

5. Protectionism & lack of trust amongst healthcare stakeholders

Future Trends and

Solution Opportunities for PHI

Develop new innovative funding sources

Population Health Management, Changing Incentives and Integrated Care

Valuing Service Outcomes: Cost-Effectiveness & Risk-Share Agreements

Leverage partnerships & bridge silos

Facilitate best practice peer-sharing & community think-tanks

Enhance trust with stakeholders

Empower Consumers (Community rating)

Empowering Prevention amongst Consumers AIA Vitality Program

70%

75%

80%

85%

90%

95%

100%

Source: “Participation in an Incentive-based Wellness Program and health care costs: Results of the

Discovery Vitality Insured Persons Study”. Reproduced with permission from AIA Vitality Program

Not Engaged

Benchmark

Cancers Cardiovascular

Diseases Endocrine and

metabolic disease

Musculoskeletal

Engaged members experienced lower

costs per patient

Cancers Cardiovascular

Diseases Endocrine and

metabolic disease

Musculoskeletal

Engaged members had lower

admission rates

Get your strategy right with prevention: PepsiCo Study

Source: “Do Workplace Wellness programs save employees money . Evidence from a Fortune

500 company Liu et al. Diagram adapted from www.engagingleader.com/6-lessons-from-pepsi/

Personalised health and Behavioural profiling to improve adherence

Reproduced with permission from Akumen

Future Solutions for Australian Healthcare 1. Michael Armitage, Private Healthcare Australia 2. George Savvides, CEO, Medibank 3. Dwayne Crombie, MD, BUPA Health Insurance 4. Mark Fitzgibbon, CEO, NIB 5. Prof Ian Frazer, AC, CEO TRI 6. Prof Stephen Leeder, AO, Chief Editor, MJA 7. Gavin Fox-Smith, CEO Johnson & Johnson 8. Michael Ackland, GE Healthcare 9. John Bronger, Pharmaceutical Society of

Australia 10. Dr Martin Cross, Chairman, Medicines Australia 11. Alison Verhoeven, CEO, AHHA 12. Dr Mal Washer, Doctor & former MP 13. Michelle Bridges, Wellness expert and ‘The

Biggest Loser’ host .... And 7 other healthcare experts

For complimentary copy

Call +612 8091 0918 OR

Email avnesh@energesse.com

Summary

1. Understanding the broader Australian Healthcare ‘Eco-System’

2. Major Challenges within the System and Need for Reform

3. Specific challenges for the Health Insurance Industry

4. Future trends and Opportunities for PHI

5. Future Solutions in Australian Healthcare White Paper

For complimentary copy

Call +612 8091 0918 OR

Email avnesh@energesse.com