Hospitals don't need increased funding, they need to make better use of what they've got

The Australian hospital sector is facing growing pressure, not least around funding. The states are struggling to come up with the funds to fill the gap left by the Commonwealth’s 2014 budget announcement that it will reduce the levels of federal hospital funding from next year.

Australia’s health system is a network of service providers, rather than a single, coherent system. The rules around funding and access – even within a single hospital – are often different, making it difficult for patients to navigate their health-care journey.

Another feature of a system with multiple interfaces between services is queues. Australian patients do an awful lot of waiting. It’s not just inconvenient to the patient, it can result in increased cost of care and reduced health outcomes.

Proposed solutions usually focus on the need for more resources, be it money, beds or staff. But fixing the hospital system is not just a matter of more and more funds. We don’t necessarily need to increase funding to the public hospital system, we need to make better use of what we’ve got. Hospitals need to work smarter, not harder.

Working smarter

The health sector can learn from other industries that turn to operations research (“modelling”) to fix everyday challenges. Take check out lines, for example. Rather than customers having to choose which queue to join – and face uncertain wait times – some retailers are now introducing single queues designed to provide the quickest service time to all customers based on a first come, first served basis.

The health system is yet to routinely embrace this style of modelling, systems thinking and design thinking to reduce hospital waiting times, boost quality and improve patients' experiences. But there are pockets of excellence we can learn from – in the United Kingdom and at home.

The National Health Service (NHS) in Wales has created a modelling unit that’s embedded in hospitals to help redesign services in a more connected way. This has improved rostering of the workforce, led to better decisions on where to locate services, and optimised operating room schedules to avoid unnecessary patient cancellations.

The resulting impact has included net efficiency gains of £1.6m (A$3m) per year in one emergency department. More importantly, it has reduced the rates of early death among stroke patients by 60%.

Similarly, the Cumberland Initiative, a change management collaboration in the United Kingdom, estimates that adopting a systems-improvement approach to the National Health Service could save 20% of the NHS budget, which could then be redirected to improving health care.

Australia is also making some progress. The General Medicine team at Monash Health in Victoria has improved patient flows, which allowed 34% more patients to be treated. Without these changes, at least an additional 110 beds would have been required. This has saved a conservative A$10 million a year in operating costs.

At Victoria’s Florey Institute of Neuroscience and Mental Health, researchers have been modelling how stroke care can be improved. When someone has an acute ischaemic stroke, a blood clot is blocking vital blood supply to the brain. Dissolving this clot is one of the only two therapies shown to improve patient outcomes.

But patient outcomes worsen when there are any delays to treatment, either within hospitals or en route. And the median in-hospital delay is 70 to 80 minutes.

The Florey researchers showed that small reductions in the time between the start of symptoms and therapy can produce significant improvements in outcomes. Armed with such knowledge the patient treatment pathways can be improved to reduce the time to treatment and reduce disability in these patients.

Better patient outcomes and reduced disability means reduced cost to the system.

How can the health system benefit?

Other industries would not undertake significant investment in new capital infrastructure or reform projects without employing such methods. Yet just a handful of Australian hospitals are approaching hospital planning, efficiency improvements and quality improvement in ways that rival big business in terms of using operations research methods. Most are not.

State governments are currently considering how to improve quality and safety in Australia’s hospitals – and they want to achieve efficiencies too. What’s needed is sustained endeavour, an openness to accept that other industries have developed methods that can help health and a willingness to try. Those in Cardiff and also in Monash have achieved much with relatively little by embedding modellers into health care organisations.

This will require clinicians, health managers, and systems modellers and designers to work together – and acknowledge that while hospital staff do great work, we can do better by giving them better tools to help tackle the challenges they face. This is precisely what governments are also seeking: universities working with industry to achieve innovation.

The following people also contributed to this article: Keith Stockman, Manager Operations Research, General Medicine, Monash Health; Peter Lacey, Founding Partner of Whole Systems Partnership; Douglas McKelvie of the Symmetric Partnership; Claire Cordeaux, Executive Director, Health and Social Care SIMUL8 Corporation; Laurent Debenedetti, Healthcare Management Consulting, Director Gordian Laser Ltd; Dale Ward Partner, Consultant, Consilium Technology; John King, Ethos Partnership, Ethos Health, Ltd.; and Ian Gibson, Managing Director of Healthcare Delivery Modelling.

This article is part of our series Hospitals in Australia. Click on the links below to read the other instalments: