Horn health savings 'secondary', says investment specialist

Shared services not sufficient for health transformation

A shared services approach to health, as recommended in the recently released Horn report into the New Zealand health system, will not be enough to deliver the benefits needed to make the system sustainable, says one economist.

Dr Paul Winton, a principal of capital investment company Temple, says international studies suggest savings of 4.5 to 7.9 percent in health costs could be possible and a large part of these savings would come from labour productivity.

Shared services for the 21 district health boards, as recommended by the Horn report, were “really secondary” to such savings, he says.

A Temple study into the sector released last week says New Zealand is addicted to healthcare and warns that the current annual government spend of $12 billion a year could blow out to $45 billion by 2026, potentially bankrupting the government. Health spending has grown at 6 to 10 percent a year for the past 10 years, double the rate of the growth of the entire economy’s gross domestic product.

Information technology has a massive part to play in delivering increased labour productivity in health, but only if the sector sorts out some key issues, says Winton.

He specifically outlines better access to medical records to reduce administration time, improved professional time utilisation, increased in-home supported care and patient monitoring in the community to reduce hospital admissions.

“There is clear monetary value in getting this right,” he says. “The issue is, how do we kick this off? We have the technology and there are a relatively small number of issues.

“But who is going to lead the charge? That is something for the industry to sort out.

“We need recognition of the scale of the problem and the scale of the potential benefits.”

Winton’s views appear to support those of the Health Management System Collaborative (HMSC), a group of up to eight District Health Boards seeking to build a new shared health management system.

Bennett Madary, CEO of consultancy Simpl, which is managing the scoping of the project, says the group started searching for the kinds of savings the Horn report focuses on — in procurement, deduplication and sharing. However, that vision changed as the group came to realise that the real savings lie in transforming the way health services are delivered.

“The focus of the HMSC is on genuine transformation, on doing things better,” Medary says. The HMSC’s discussions have moved beyond IT.

The Horn report recommended that the HMSC project not proceed in its present form as it has “national implications”.

Instead, the report suggests the HMSC refocuses on replacing end-of-life hospital patient administration systems with systems that meet HISO standards and allow easy sharing of electronic information with other providers.

Medary told Computerworld, however, that the report has encouraged the group to continue to seek engagement with the likes of IPAC and primary health providers and users to ensure there is a “blueprint for change”.

He says it will be a mistake to invest seven to 10 years of capital into systems that “have their scope set by the past” and will fail to deliver a sustainable health system.

Winton says that in 1994 Denmark realised it was wasting 40 percent of its labour time in the health sector on paperwork.

“Now, Denmark is one of the world leaders in health. A 2006 study showed that for every dollar it spent on health, it got $1.62 back”.

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Tags healthMurray Hornpaul wintonhron reportTemple

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