Key takeaways

  • Despite Australia’s high standard of universal healthcare, it lags behind the rest of the world when it comes to digitising its hospital systems and processes. How good could it be if digitised?
  • The cost and complexity of deploying digital tech to existing facilities, coupled with an inflexible funding regime, has greatly hampered the adoption of medical health record technologies here.
  • Lessons could be learned from a US policy that both incentivises and facilitates the broad-scale digital transformation of hospitals.

Given today’s digitally-connected world, you would expect a visit to the hospital to have really changed. Gone would be the hours-long waiting times, the confusion, the miscommunication. The experience would be streamlined – you could check in in advance via a smartphone app and you would have already communicated some preliminary triage information, such as symptoms or drug allergies, before stepping through the door.

Upon arrival, you’d don a pre-prepared identity bracelet containing an RFID chip and photo ID that not only ties you to your definitive Electronic Medical Record (EMR), but allows staff to quickly locate you. With all relevant information at hand about your prior medical history, the clinician could more easily provide an integrated treatment plan.

This description probably doesn’t sound all that far-fetched – provided you haven’t visited an Australian hospital any time recently. In their high-tech environments with multi-million dollar MRI machines and robotic keyhole surgeries, the installation of core administration IT systems would not have been expected to have posed a great challenge.

It may come as a surprise to learn, therefore, that while a growing number of hospitals around the world have taken the next step toward full digitisation, Australia lags behind. In 2015, there were 1,414 digital hospitals in the US. In Australia, there was one.

Why Australia’s hospitals
are lagging    

We have, at present, a somewhat archaic paper-based record keeping system in most Australian hospitals that is increasingly seen as inefficient, expensive and dangerous. It is a contributor (at least partially) in the more than 18,000 deaths per year in Australia¹ attributable to medical error.

Australia’s lone digital hospital is St Stephen’s Hospital in Hervey Bay, Queensland. Opened in December 2014, it set a new benchmark for community healthcare. It was the first (and is, so far, the only) fully digitised hospital in Australia.

One would think that, as with St Stephen’s, all new healthcare facilities in Australia (especially those built from the ground up) are likely to be digitally enabled. This isn’t the case. Hospitals are still opening with paper such as Fiona Stanley² in Western Australia. An even greater challenge is the retrofitting of existing hospitals to be digital-ready.

the system

The primary reason for Australia’s lagging healthcare industry, however, comes down to funding. Hospitals receive their funding from states, who have been unable to date to adequately shoulder the cost of the capital upgrade, even if it saves money in the long run.

Delaying digitisation is starting to hurt. At this point, rising costs and the increased healthcare demands posed by our ageing population are placing hospitals under severe pressure to decrease the unit cost of treating patients.

In research undertaken by PwC, implementing EMRs could equate to savings of approximately $1.76 billion a year³. It’s not something that is debated much anymore, most hospital systems would love to go fully digital.

The magnitude of the capital costs (estimated to be up to $125,000 per bed when implemented hospital by hospital³), combined with a lack of certainty regarding outcomes, reliability of providers, and standards of interoperability across institutions, has led to a situation where a small handful of hospitals are adopting new technologies – albeit in a piecemeal and more expensive manner – but most are opting to wait and see.

It’s a rational but frustrating approach and, if nothing is done to circuit-break the situation, Australia will continue to fall further behind the rest of the world and millions of dollars risk being wasted.

Digitisation attempts to date
in Australia

State governments in Australia have taken steps to incentivise digital deployment, achieving reasonable success in improving the accuracy and collection of information, reducing investigation times and minimising duplicated tests and documents.

Queensland Government’s eHealth Investment has met with some notable success, as demonstrated by Brisbane’s Princess Alexandra Hospital, which is well on its digitisation journey and is scheduled to become fully digital early in 2017, making it the first digital public hospital in Australia.

All states and territories have had some degree of success, and these efforts are to be congratulated; however, the most important benefits of a digitised healthcare system will only be fully realised when a majority of institutions support the technology. That’s what will really facilitate integrated, cross-institutional medical treatment.

The secret to the
United States’ success

Instrumental to the marked uptick in digital hospitals in the US has been the Meaningful Use policy, part of a government investment4 to promote and expand the adoption of health information technology.

Meaningful Use requires healthcare providers to demonstrate how their use of electronic health record technology improves the quality, safety and efficiency of the treatments they provide, while also reducing health disparities. That is, hospitals are not only required to deploy such technologies, they must also do so in a way that produces measurable improvements in clinical and population health outcomes, transparency and improved quality of data and patient satisfaction.

Compliance yields financial incentives and this has further accelerated the adoption of digital technology in US hospitals.

Standing on
the shoulders of giants

While it has been extremely successful, the US’s Meaningful Use policy has had its shortcomings, such as its failure to define standards for information exchange between healthcare providers, which remains a problem today. From a broad perspective, however, it has succeeded admirably in facilitating a beneficial change to the industry.

An Australian implementation of Meaningful Use would include those aspects that made the US version so successful, but it would also benefit from its lessons learnt.

An opportunity
wrapped in a predicament

Implementing an improved, Australian version of the Meaningful Use policy – where funding is allocated based on accomplishing clearly defined goals and benchmarks of success – is a viable solution to both incentivising the industry to innovate toward a fully digital future, while ensuring standards for data exchange and interoperability are maintained.

We might be behind at present, but this gives us the advantage of hindsight to create an even better version of an already successful policy. It’s a rare example of a win-win scenario, with all stakeholders standing to benefit. A fully-digitised healthcare industry in Australia would ensure the highest quality of patient care while minimising medical error, improve efficiency by cutting down on research and administrative paperwork, and deliver cost benefits to both governments and taxpayers alike.

Follow the argument for adopting a Meaningful Use-style policy in Australian hospitals by reading PwC’s August 2016 report Australia can see further by standing on the shoulders of giants.


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John Forsythe

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