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A conversation with Professor Jane Hall

What’s an economist doing in health? Professor Jane Hall says it’s to ensure we get value for money from our scarce health-care resources.

Professor Hall is the founding director of the Centre for Health Economics Research and Evaluation and a former member of the Academy of Social Sciences.

In this podcast she gives her take on the issues facing Australia’s health-care industry.

Voice-over: Welcome to the National Health and Medical Research Council podcast. Our podcasts aim to keep you in touch with major health and medical research issues, and the people who shape them.

Introduction: What’s an economist doing in health? Professor Jane Hall says it’s to ensure we get value for money from our health-care resources. Professor Hall is the founding director of the Centre for Health Economics Research and Evaluation, and a former member of the Academy of Social Sciences, which advises the federal Minister for Health. In this conversation, she gives Dr Mark Bradley an economist’s take on the issues facing Australia’s health-care industry.

Interviewer: Well, Jane, thank you for joining us today on this NHMRC podcast.

Prof. Hall: Thank you.

Interviewer: Now the Centre for Health Economics Research and Evaluation is something that many people may not be aware of. I'd like you to tell us exactly what you do here.

Prof. Hall: Certainly. I might just start, though, if I can, by saying that when I started working in health and I did an economics undergraduate degree first, people used to say, 'What's an economist doing in health? What on earth has economics got to do with health and health care? Isn't it all about money and greed driving things, whereas health care is all about altruism?' Well, people don't say that anymore. There's been a big change in the time that I've been working in the field. Health care is one of the biggest industries we have in this country. It accounts for almost 10 per cent of our GDP, so that's an enormous amount of economic activity, and unless you understand economics and you have the tools of economic analysis at your fingertips, you're going to find it hard to understand and analyse the health care system. So health economics really draws on a variety of fields within economics and applies it to understanding health and health care.

Interviewer: And the outcomes of programs?

Prof. Hall: The outcomes of programs — as in understanding health outcomes?

Interviewer: Yes. Has the dollars that you've invested in certain programs, have they actually given you the outcomes?

Prof. Hall: Well, absolutely. We're not interested just in where the dollars go, we're interested in value for money. Indeed, the whole of economics, that is the core economic problem. Resources are scarce; human wants and desires are apparently unlimited; how do we get the best use out of the scarce resources that we have? Money is just a convenient way of measuring a lot of things; it doesn't necessarily measure everything. So we're interested in how do we use the resources we put into health care and indeed health, so we include all sorts of health promotion and public health in that, to generate the most social good.

Interviewer: So let's focus down on to some of the key projects and research areas that you're examining here. What are those?

Prof. Hall: I guess we can describe our work under five sort of broad headings. One is around financing and incentives issues. So what is the impact of the overall sort of structure of the flows of finance in the Australian health care system. So we've done work around private health insurance. We've done work around the safety net. Now, for example, we showed that those people who took out private health insurance in response to the lifetime health cover and financial incentives, it certainly increased the proportion of people with private health insurance, but those people are not likely to go and use private hospitals. They continue, by and large, to be users of public hospitals. So if the objective of that policy was to reduce pressure on public hospitals, it hasn't achieved its objective.

Interviewer: Why do people continue to use the public sector hospitals?

Prof. Hall: That is harder to answer until we collect some more data. I think it's because they may have front‑end deductibles on their insurance policy. It may be because they're among the healthier group and that their admissions to hospital are less likely to be elective.

Interviewer: Now, you're also working on areas around health work force issues?

Prof. Hall: Yes, that's right.

Interviewer: What are the big issues there?

Prof. Hall: Well, the big issue that's perceived in health work force is that there's a shortage — a shortage of doctors, particularly general practitioners, and a shortage of nurses. Now the idea that there's an absolute shortage doesn't sit very comfortably with economists. Shortages mean that the current demand and the current sort of responses aren't dealing adequately with what's there. So we're interested in a few things. We've just got an ARC‑funded research grant which will look at new nurses, new nurses entering their university education and also entering the work force, and following them forward over time to see how the experiences that they have during their training or during their early working years affect their attitudes to work and their preferences for different sorts of work and where in fact they do work and how much they move in and out of the work force. And that sort of longitudinal picture has not been well established. And we know that we train a lot more nurses than we keep in the work force. Now some of that might be because this is a group that's particularly mobile and they travel. It may be because a lot of particularly young women are taking time out to establish families. But there are some very important issues around the structure of work and the pressures and experiences that young nurses have to understand how that affects their retention in the work force.

Interviewer: I'm aware that there is now an elevated level of discussion around the development within the nursing profession of nurse practitioners to take on many of the roles or tasks that often doctors would do in hospitals and so forth, particularly useful in regional and more isolated areas. What's your take on that?

Prof. Hall: There was a Productivity Commission review of the health work force a few years ago. At the moment, Australian health work force planning is stuck in still seeing the professions very rigidly, that a nurse does one set of activities and a doctor does another set of activities. In other countries, there's much more discussion about flexibility of roles. For example, if we look at primary health care, there are a lot of things that are currently done by doctors and at the moment they're generally done by doctors because only doctors get reimbursed on the medical benefits schedule, but could be done by people with different sorts of skills and different skill sets. So I think one of the issues for Australia to face is how do we develop this much more flexible approach to the health work force, because that's what we're going to need.

Interviewer: What's your commentary on where you might see things heading. Because we've had this interesting situation in this country where we've got hospitals that are managed by the states, yet we've got a lot of policy coming from the Federal Government, so it's almost like two sides to a coin.

Prof. Hall: Yes. Most people that you talk to say that a big problem in the structure of Australian health care is the division of responsibilities between the Commonwealth and the states. I don't agree with that. I think we could waste a lot of time sorting out Commonwealth‑state responsibilities, and I think it would be very time‑consuming, because it involves dealing with our Constitution and getting changes through that and through the whole financial relationships of Commonwealth and states. And I think there are more important issues to be dealt with. What matters is not whether the Commonwealth does it or the state does it. What matters is having the right sort of incentives in the system and allowing for the right sort of flexibility for the movement of funds so that we deliver the right sort of care to the right sort of people at the right time. I don't think the average patient cares whether it is a Commonwealth program or a state program, in name, that delivers them a service. What they care about is getting the right health care for them when they need it. And I think that's where our focus should be.

If I were this government, I would be very interested in how we could restructure primary care to have a more primary care-led health care system. In the past we've always talked about our general practitioners as gatekeepers. It sort of sets up the notion of some sort of guard standing at a turnstile to decide who can get in and who should be kept out. Whereas again in other countries they're talking about primary care-led health services and they're seeing the primary care practitioner not as an individual, but as a team of people who provide an advocate, and indeed in some terminology the medical home for the individual. Now as we move into a population which is going to have much more chronic disease, as we move forward with medical technology and we learn more about risk factors and early intervention, then the role of the primary care provider is not just to sort out who's really sick and who isn't. It's about becoming a partner with the individuals themselves in managing their health risks and their illness, if they do develop it.

Interviewer: In some sense you've seen this already happen because a lot of GPs no longer work in isolation, they work in medical centres ‑ it's a one‑stop shop for almost every possible allied health worker that you could imagine. So that's a holistic sort of approach that has really started to take hold, hasn't it?

Prof. Hall: Well, you can see why it appeals to patients. A one‑stop shop is a lot more convenient, and a lot easier in terms of, hopefully, having some coordination of care. But driving a system under fee for service doesn't set up the right incentives for that sort of more holistic care.

Interviewer: OK. Jane, thank you very much for your musings today. They've been most insightful.

Prof. Hall: Thank you.

Voice-over:  This podcast was brought to you by the National Health and Medical Research Council, working to build a healthy Australia. You’ll find more information about this and other health and medical research issues on our website, at www.nhmrc.gov.au.

Page reviewed: 5 May, 2011