60
Building and measuring the value proposition in Laboratory Medicine Bev Rowbotham MD FRACP FRCPA
| Date post: | 17-Jan-2015 |
| Category: |
Health & Medicine |
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Building and measuring the value
proposition in Laboratory Medicine
Bev Rowbotham MD FRACP FRCPA
The economics of healthcare
Healthcare spending in high income countries
The Value Movement
bull Health outcomes achieved per dollar spent
bull Microeconomic theory one basic measure
of economic efficiency ndashOutput per unit of
input
The Value Movement
Productivity falls in healthcare
Health funding trends ( HIC)
bull Refusal of governments to pay more
bull Health insurers want to reduce the cost of
claims
bull Consumers want to reduce OOP
bull More people dependent of the
Government safety net (USA)
bull More people with chronic disease
Sky is not falling in Australia
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
The economics of healthcare
Healthcare spending in high income countries
The Value Movement
bull Health outcomes achieved per dollar spent
bull Microeconomic theory one basic measure
of economic efficiency ndashOutput per unit of
input
The Value Movement
Productivity falls in healthcare
Health funding trends ( HIC)
bull Refusal of governments to pay more
bull Health insurers want to reduce the cost of
claims
bull Consumers want to reduce OOP
bull More people dependent of the
Government safety net (USA)
bull More people with chronic disease
Sky is not falling in Australia
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Healthcare spending in high income countries
The Value Movement
bull Health outcomes achieved per dollar spent
bull Microeconomic theory one basic measure
of economic efficiency ndashOutput per unit of
input
The Value Movement
Productivity falls in healthcare
Health funding trends ( HIC)
bull Refusal of governments to pay more
bull Health insurers want to reduce the cost of
claims
bull Consumers want to reduce OOP
bull More people dependent of the
Government safety net (USA)
bull More people with chronic disease
Sky is not falling in Australia
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
The Value Movement
bull Health outcomes achieved per dollar spent
bull Microeconomic theory one basic measure
of economic efficiency ndashOutput per unit of
input
The Value Movement
Productivity falls in healthcare
Health funding trends ( HIC)
bull Refusal of governments to pay more
bull Health insurers want to reduce the cost of
claims
bull Consumers want to reduce OOP
bull More people dependent of the
Government safety net (USA)
bull More people with chronic disease
Sky is not falling in Australia
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
The Value Movement
Productivity falls in healthcare
Health funding trends ( HIC)
bull Refusal of governments to pay more
bull Health insurers want to reduce the cost of
claims
bull Consumers want to reduce OOP
bull More people dependent of the
Government safety net (USA)
bull More people with chronic disease
Sky is not falling in Australia
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Productivity falls in healthcare
Health funding trends ( HIC)
bull Refusal of governments to pay more
bull Health insurers want to reduce the cost of
claims
bull Consumers want to reduce OOP
bull More people dependent of the
Government safety net (USA)
bull More people with chronic disease
Sky is not falling in Australia
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Health funding trends ( HIC)
bull Refusal of governments to pay more
bull Health insurers want to reduce the cost of
claims
bull Consumers want to reduce OOP
bull More people dependent of the
Government safety net (USA)
bull More people with chronic disease
Sky is not falling in Australia
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Sky is not falling in Australia
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Australian health spend
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Australia patients foregoing healthcare
because of OOP costs
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Laboratory Medicine
USA
bull The ldquoat riskrdquo model of reimbursement will
be accelerated
bull Conventional strides to efficiency
bull Use of pathology as an early detection
system for patients who are about to
transition from low cost to high cost
Lessons from other countries
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Pathology funding in Australia ndash the MoU era
-50
0
50
100
150
200
250
300
350
Pathology Rebates and Cost Indices January 1985 to June 2014
Consumer Price Index Average Weekly Earnings Pathology rebates zero
Average Weekly Earnings up by 288
Over the same period rebates for Pathology have been reduced by 105
Consumer Price Index up by 182
1st August 1986Pathology schedulereduced by 132
The Federal Court challenge which overturned a further arbitrary fee reduction
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Growth in healthcare expenditure
1000
1500
2000
2500
3000
3500
4000
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Medicare Payments - An Index of Medicare Benefits PaidFrom January 2000 to June 2013 (3 month moving averages) amp percentage growth over this period
All benefits include safet net and bulk billing incentive payments
All others
GPs
DI
Path
AWE
CPI
137
182
48
219
88
203
Medical Cost Inflation
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Pathology utilisation - the referrers decision
450000
500000
550000
600000
650000
700000
750000
800000
All BTOS Groups reflecting Clinical Activity (GPs Speccons Anaesthetics Obstetrics Operations)
Services per day trend
The Howard stimulus of general practice
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Response to fee restraint
bull 1 Efficiency
bull (i) Mergers large laboratory networks
bull (ii) Centralisation of testing
bull (iii) Automation
bull 2 Private equity
bull 3 Competition for volume
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Laboratory networks
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
The Australian challenge
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Competitionbull Price ndash bulk billing increased
bull Value ndash for referrerbull Improve efficiency ndashTAT
bull Better health information - graphical reports cumulative reports integrated reports
bull New tests
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Pathology - a healthcare service
bull Direct patient healthcare service
bull Critical infrastructure for other direct patient
healthcare services ndash management decisions
based on pathology results
bull Risk management for direct patient
healthcare service
bull Enabler of hospital in the home health policy
bull A high reliability industry (aviation electricity)
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Pathology in the healthcare silos Cancer
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Risk management doctors are time poor prone to reasoning errors
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Risk management costs
bull Spend on risk in financial sector 5
bull Postulate If 20of pathology tests requested as
ldquorisk managementrdquo this is 3 of spend on GP
services
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Pathology to keep patients and save money
out of hospital
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Pathology - a nation building service
Sustainable populations in regional and
rural Australia
Logistics capablility
Critical infrastructure- biosecurity
Medical research ndash data mining of
laboratory information services
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Regional Australia ndash labs ACCs
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Critical infrastructure ndash the Queensland floods
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
BiosecurityThe praetorian guard Sentinel chickens and pathology
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
111
2232
73
494849
12
4125
111200
2000
42
162243
3226
61
9384
132151
252
298
320
363
310
272 274
208
171
109
57
5018111114
28
00
50
100
150
200
250
300
350
400
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 91
01
11
21
31
41
51
61
71
81
92
02
12
22
32
42
52
62
72
82
93
03
13
23
33
43
53
63
73
83
94
04
14
24
34
44
54
64
74
84
95
05
15
25
3
P
osit
ive
Te
st N
o
Week No
SNP Influenza testing 2009 by week n=39143 (Jan - 23rd October Week 43)
Flu A FluB Non FluAB Positivity
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Staffbull Laboratory Operations
ndash 24 hours per day 7 days per week
bull FTE Went from 198 to 224 ndash 119 scientists
bull 10-14 hour days (600 ndash 2000 hrs)
ndash 79 laboratory assistants (13 bodies)bull 3 day time and several night time assistantsbull Swab cutting (VTM) setting up extractionsbull Technical assistants put on 3 PCR runs overnight
bull Tests FTE 2008 931 month July 2009 1810 month
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Data mining
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Current status
bull Efficient High value (unrecognised)
- Price ndash controlled
- value to patient doctor society
bull Competitive
bull Innovative
bull no transformative technology in sight
bull The wolves are circling
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
How to save the hen
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Critical infrastucture ndash the electricity industry
bull The bad storm season came at a difficult time for Queenslands premier Peter Beattie who had to fight a state election in March 2004 He announced a formal review of the Queensland electricity system by consultant Darryl Somerville in order to find out what was causing the network fragility
bull The 2004 report was commissioned by Peter Beattie because he had an absolutely massive problem on his hands veteran energy analyst Keith Orchison told NM in a recent phone interview The investment had been far too low and when they had a storm the lights didnt just go out they stayed out Beatties response was to get Darryl Somerville and a couple of others to sit down and look at what the situation was and what they ought to do about it
bull Darryl said Youve spent too little money the system is run down it needs a very significant level of investment Orchison says
bull The result was the 2004 Somerville Report which slammed the operation of the government-owned networks and argued that billions more needed to be spent on improving reliability standards Energex the south-east Queensland network operator had been running its electrical assets hard for more than a decade underinvesting in critical infrastructure in a conscious effort to maximise profits
bull Those profits went not to shareholders but to the state treasury Critically it emerged that the state government had regularly been siphoning hundreds of millions of dollars in special dividends to help prop up the states bottom line
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Saving pathology from Government
bull The hollow log of health funding -easy target large $ invisible weak advocacy
bull Misunderstandings
- role of the investor
- perceptions of poor quality eg not following guidelines (already out of date)
- perceptions of waste - risk management
- Use private sector to test change and introduce into public sector
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Saving pathology from doctors and
shareholders
bull Referrers
bull Equity holders ndash dividend
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
What next
Self quantitation
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
What nextSmartphones
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
What nextThe Porter model
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
What next -The Blumenthal model
bull Indicators - IOM
bull Data systems - measurements
bull Security around data
bull Pay on best available value
measurements
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
What now
1 Describe current value to payers
2 Better use of pathology
3 Measure outcomes
4 Incentivise valuable services
5 Eliminate waste
ndash Deregulated ACCs rents
- Compliance costs ndash NATA accreditation
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
1 Describe the value ndash the Porter model
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
2 Better use of pathology
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
The goal ndash to avoid hospitalisation
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
3 Measure and benchmark
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
ICHOM
bull Write here
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
International Consortium of Health
Outcomes Measurement ICHOM
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Outcomes research
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
4 Reward value
bull Expertise
bull Comprehensive labs with critical volumes
bull Hospital and emergency centre services
bull Regional remote
bull Hospital in the home
bull Biosecurity surge capacity
bull Research
bull Training
bull Genomics
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
New payment models
bull Brookings Health Affairs Blog 7 July 2014
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
5 Eliminate waste
IOM 2013
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Deregulated collection centres ndash value for whom
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
bull Write here
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
How to define value
bull NET Bible Proverbs 3110Who can find a wife of noble character For her value is far more than rubies
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
bull 1 Economics not health policy is driving
the delivery of health care
bull 2 Laboratory Medicine is at the centre of
this as it is regarded as a commodity
bull 3 Pathologists need to define and argue
the Value proposition
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
bull Write here
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
Arrow KJ Uncertainty and the welfareeconomics of medical care Am Econ Rev
53(5) pp 941-973 1963
bull ldquoThatrisk and uncertainty are in fact significant elements in medical care hardlyneeds argument I will hold thatvirtually all the special features of this industry in fact stem from theprevalence of uncertaintyrdquo
