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Speech to the Committee for Economic Development of Australia

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Minister for Health


Committee For Economic Development of Australia 16 May 2012


Thank you for inviting me to be with you this morning.

I acknowledge the traditional owners of this land, the people of the Kulin nation and pay my respects to their elders past and present.

I’d also like to acknowledge the CEO of CEDA, The Honourable Professor Stephen Martin, and all CEDA members who’ve joined us here today.

CEDA plays an important part in advancing the national conversation on economic and social policy. Having a strong contest of policy ideas is central to my approach to the health portfolio, and I thank CEDA for its role in promoting informed, thoughtful debate.

I was very pleased to have been asked to speak with you today about eHealth. It’s a priority for me as Health Minister, and for the Government.

Australia’s health challenge

Like many developed nations, Australia is ageing.

Forty years ago, about 8 per cent of Australians were aged 65 and over. Today, it stands at about 14 per cent Australian Government Department of the Treasury. Australia's Demographic Challenges. Appendix - the economic implications of an ageing population. Accessed 14.5.12. .

By 2040, this is projected to double to around a quarter of our entire population.

Of course, this is good news. More Australians are living longer. It means our medical treatments are better and we’re making healthier lifestyle choices.

But the trend is putting ever-increasing pressure on the public purse.

This is compounded by an increase in chronic and complex conditions like dementia, cancer, and diabetes - as well as the rising cost of new treatments.

If we don’t act to help ease this pressure, over time the cost of healthcare will become too much for taxpayers. If we don’t move to a more sustainable model, some estimate that within 30 years healthcare spending will outstrip the total revenue collected by all state and local governments Australian Government Department of Health and Ageing. National Health Reform progress and delivery (p.1) DoHA. Canberra, September 2011..

Making the most of the health dollar

This means more than ever before, we have to make the most of every precious health dollar.

We must be guided by the evidence and invest wisely. We must find efficiencies and return the benefits to patients.

And that’s what we’ve done in this Budget.

Where the evidence said things weren’t working, the Government’s done things differently.

We’ve made sensible saves to fund smart policy.

It’s how, in the face of tough economic circumstances, we’ve been able to deliver both a surplus and a reforming health Budget…

…a Budget that’s delivered dental care to those Australians who need it most…

…that’s delivered bowel screening to help detect cancer early…

…and that’s delivered $233 million for the next instalment of the Government’s eHealth program.

The case for eHealth

The case for the Government’s eHealth program is a strong one. That’s why we’re continuing our investment.

eHealth has helped computerise our paper based medical records system.

It has helped healthcare professionals, clinics, hospitals to communicate electronically with their patients, and with each other. And now the Government’s national eHealth records system is drawing all those threads together.

It will be the cornerstone of the eHealth system in Australia.

It will mean a patient’s medical information is available in one place. Available online, wherever and whenever it’s needed - which is a particular benefit given how mobile we Australians are. We spent 262 million nights away from home in the year

ending September 2011 Travel by Australians - September 2011 Quarterly results of the National Visitor Survey, Tourism Research Australia, Canberra. 2011..

The national eHealth records system will mean better, more efficient, more convenient healthcare. And the benefits will flow to patients, healthcare professionals, and to government.

You may be surprised that in any one week, one in three Australian GPs see a patient for whom they have no current information. More than one in five GPs face this situation every day Australian Government Department of Health and Ageing. The readiness of Australian general practitioners for the eHealth record. Unpublished. 2011..

We know that about two to three per cent of all Australian hospital admissions are medication-related. This represents about 190,000 hospital admissions each year, costing $660 million…of which about 15,000 are due to inadequate patient information Roughead, EE & Semple, SJ. Medication safety in acute care in Australia: where are we now? Part 1 : a review of the extent and causes of medication problems 2002-2008. Australia and New Zealand Health

Policy 6:18, 11 August 2009..

For patients over 75, up to 30 per cent of admissions are known to be medication-related, with up to three quarters of these potentially preventable Runciman, WB, Roughead, EE, Semple, SJ & Adams, RJ. Adverse drug events and medication errors in Australia. International Journal for Quality in Health Care;15(1):i49-i59. International Society for Quality in Health Care & Oxford

University Press. Boston, Mass., December 2003..

For example, I recently heard the story of an elderly man who collapsed in a shopping centre. He collapsed from a perfectly preventable interaction between medicines. The incident occurred after the man’s GP, and his specialist, changed his medication independently of each other — without knowing what the other had done.

With eHealth, stories like these should be a thing of the past. Doctors will have access to a patient’s medical information at the click of a button, including medication.

eHealth will also spell the end for the duplication of things like blood tests. One study I’ve seen showed more than 7% of all tests ordered in a hospital’s immunology lab were unnecessary duplicates Huissoon, AP & Carlton, SA. Unnecessary repeat requesting of tests in a university teaching hospital immunology laboratory: an audit [letter]. Journal of Clinical Pathology

2002;55:78. 2002.

In our diabetes pilot in Queensland, the Hope Island Medical Centre showed me how GPs using eHealth will keep track of, and prompt, visits to allied health professionals like podiatrists and dieticians for their diabetic patients.

eHealth will also mean:

 better co-ordinated care for patients with chronic or complex illnesses; and  less of a need for patients to retell their story every time they see a healthcare professional.

And eventually eHealth also will work together with telehealth technology. For people with diabetes this could one day mean blood sugar levels read from home, sent to the doctor, and uploaded straight to an eHealth record.

As benefits like these are realised over time, we estimate eHealth will save the federal government around $11 billion over 15 years Deloitte, The national PCEHR system: relationship to the 2010 national IEHR business case, unpublished, Version 0.19, 22 June 2011.


That’s a long-term return of $11 billion for a government investment which includes around $465 million over the last two years, and another $233 million in the next two.

However you look at it, that’s pretty good bang for your buck.

eHealth: a journey

But the eHealth journey isn’t one that’ll be complete overnight. It’s not just a matter of ‘flick a switch’ and away you go.

During the last two years, the Government’s been building the foundations for the national eHealth records system. And progress has been strong. We’ve been working hard to build the essential digital infrastructure - the virtual poles and wires for the national eHealth records system.

It will ‘join the dots’ — connecting up our medical records, and connecting the computers of our hospitals, GPs, specialists and allied health professionals to each other.

And the foundations for this will be ready on 1 July this year.

Over the last two years, the Government has also provided more than $160 million to general practices across Australia (up to $50,000 per practice) to upgrade their computer systems for eHealth.

Government support has helped more than 96% of Australian practices to get the IT they need for eHealth - more than two times better than practices in the United States. That makes our GP workforce the fifth most computerised in the world The Commonwealth Fund. Why not the best? The Commonwealth Fund Commission on a high performance health

sector. October 2011. p.50..

Now many practices have most of the IT in place, we want to make sure government focuses its investment on the roll-out and take up of the eHealth record.

We've supported GPs to develop their IT systems. And from next year, by raising the bar for incentive payments, we'll encourage them to offer eHealth to their patients through the eHealth record.

Already we’re seeing around 70% of community pharmacies now using ePrescribing. One prescription exchange service reported 4.2 million prescriptions dispensed in the week before last Christmas alone.

Once the digital infrastructure is in place from 1 July, patients will be able to register for their own eHealth record through Medicare shopfronts and over the phone. And mums and dads will be able to register for their kids.

When they’re registered, patients will be able to go online to view their record and add a range of their basic health information. This will include things like emergency contact details, the location of advanced care directives, allergies, and medication.

Patients will also be able to create their own private ‘diary’ area of the eHealth record, where they can enter their own notes.

We’ve always said the rollout of the national eHealth system would be in gradual, carefully managed phases. That is the sensible, responsible way to deliver the reform.

Over time, as patients and doctors register, more detailed and sophisticated features will be available as part of an eHealth record.

Eventually things like immunisation records, Medicare and pharmaceutical benefits information, organ donation details, and hospital discharge papers will be able to be added.

And healthcare professionals will start to integrate patient eHealth records with the software they use in their practices. That way they’ll easily be able to add new information to a patient’s record.

As many of you would know, the Northern Territory introduced a form of eHealth records a few years ago.

What that example shows us is that take up tends to be slow in the first couple of years. But, as the system matures, take up starts to grow exponentially. We would expect that to be the case for the national eHealth records system too.

Looking to the future - the role for government in eHealth

As we move forward with our eHealth agenda it makes sense that we regularly reassess the appropriate role for government.

Back in 2008, the National eHealth Strategy suggested the best role for government was to stimulate investment in high priority computer systems and tools.

In a general sense, I think that holds true still. But what that means in practice is beginning to shift as eHealth in Australia evolves.

Since day one, we have called on expertise from the private sector to build the foundations for eHealth, to develop a common electronic language, and new software for GPs.

To date, this is work that’s largely been driven by government. And so it should have been. Investing in foundations, building infrastructure for the benefit of the whole nation - that’s the kind of work government is uniquely placed to lead.

But as we bed down the core infrastructure, I believe we need to turn our minds to how government can help unleash the creativity and inventiveness of the private and not-for-profit sectors.

As long as the strict security and privacy regime is maintained, we should work to make it easy for private providers and NGOs to offer eHealth related services to health professionals and patients.

I am particularly excited about the potential for some seriously interesting innovation in the consumer applications space.

As I’m sure you all know the recent growth in the number and functionality of apps has been staggering.

Google has reported 300% growth in the number of apps available in its online store in just one year - from 150,000 to 450,000 ComputerWorld UK, March 2012.

And several different sources show that healthcare apps already make up approximately 4% of the overall active apps market, May 2012 (Active apps are those that have been recently downloaded).

A few years ago we couldn’t have even imagined some of the incredible apps we enjoy today - apps that turn phones into metal detectors, apps that can tell you the name of a song just by listening…and the list goes on!

If we can partner with industry to create the right environment, eHealth has the potential to act as an innovation hub for app designers.

And I trust if we get it right, that many talented designers out there will create new, revolutionary eHealth apps.

These tools, working together with the Government’s national eHealth records system, will allow patients to keep track of their own health better than ever before.


eHealth is a great example of how the Government is working to get the best value from each health dollar.

We’re investing in eHealth because the evidence stack ups.

And in this challenging economic environment, the Government was able to make this investment by finding efficiencies elsewhere in the health portfolio.

It’s not about efficiency for efficiency’s sake.

As Minister, I care about efficiency, because of what it means for patients.

Cutting waste and being smart about our investment pays a long-term human dividend.

It means taxpayer investment in the things that work - more money, to more effective programs, delivering better healthcare for all Australians.

Thank you.