Budget Review 2010-11 Index

Budget 2010–11: Health


Dr Rhonda Jolly       

A report to the Government in 2008 noted a growing amount of research which highlights the important role e-health may be able to play in delivering ‘a higher quality, safer, more equitable and more efficient health system’.[1] E-health can achieve efficiencies by reducing medical errors associated with lack of access to patient information and adverse drug events as well as time and costs associated with duplicate, unnecessary and dangerous treatments and tests.[2] The report also estimated annual cost savings from e-health implementation of approximately $2.6 billion in 2008–09 dollar terms. More importantly, according to the report, the ultimate benefit:

... will be a safer and more sustainable health system that is suitably equipped to respond to emerging health sector cost and demand pressures. Improvements in the Australian health care system will also drive stronger workforce productivity and will therefore be integral to Australia’s long run economic prosperity.[3]

In December 2008, the Government released a National E-Health Strategy which set out an incremental and staged approach to developing e-health capabilities. The approach was intended to leverage on existing e-health strategies, manage the variation in capacity across the health sector in general and in the various states and territories, and include scope for changes as technology developed further.[4]

The final report of the Rudd Government’s National Health and Hospital Reform Commission (NHHRC), released six months later in June 2009, endorsed the directions set out in the National E-Health Strategy.[5] The NHHRC also made a number of recommendations relating to e-health. These included a recommendation that a person-controlled electronic health record should be in place for all Australians by 1 July 2012. Access to the personal health record would be owned and controlled by individuals and access would need to be approved by the owners.[6]

In this Budget the Government has responded to the NHHRC recommendations by committing funding of $466.7 million over two years to establish ‘the key components’ of a personally controlled electronic health record system’.[7]

This funding is intended to ensure that nationally consistent patient health summaries result from existing and compliant information sources, so patients who choose to participate in the system will have secure access to their health records. They will also be able to grant their healthcare providers access to those records. In time, information in these records is intended to deliver more informed clinical assessments and decision making, improve continuity of care for patients and introduce efficiencies in health care service delivery. 

There is long-standing opposition to electronic health records which is based on concerns about the security of the information that will be kept on the records, who will be able to access information and whether the records will become a means to achieve what has been labelled ‘function creep’, through the use of information for other purposes.[8] In response to this measure, David Vaile, from the Australian Privacy Foundation, has repeated the concerns of the Foundation that what has been developed in e-health will not protect privacy—it is the ‘elephant in the room’ and a recipe for a technology and public health disaster.[9]

At the same time, a number of health stakeholders have expressed their support for electronic health records and for the general use of technology to improve health outcomes. The Australian Medical Association ‘supports individuals taking responsibility for their own health and recognises that “person-controlled” electronic health records could empower and encourage patients to do this’.[10] The Consumers Health Forum (CHF) is also supportive of the development of e-health initiatives, including personal electronic health records. The CHF is of the view that there must be measures in place to ensure that all Australians will have access to these electronic health records and individual consumers and health practitioners will be able to use them effectively.[11]

The Government’s recently released national health and hospitals reform package has been extensively criticised by the Health Informatics Society of Australia (HISA) for what HISA considers is its failure to address e-health issues. President of the Society, Michael Legg, has argued spending on hospital beds and doctors has taken precedence over health technology, but the way to real health system reform is not just by increasing the numbers of doctors or hospital beds; real reform will be gained by improving the flow of information across geographic and private-public boundaries. According to Legg, reform will therefore require fixing the ‘glaring omission’ in the health and hospitals reform package through a commitment to connect health care systems electronically.[12]   

Similarly, the lead author of the Deloitte e-health strategy report, Andrew Powick, has made the point that a considerable section of the health system remains reliant on ‘bits of paper, human memory and patients lugging their x-rays around’.[13] It is critical to make investments to remedy this situation and to deliver a co-ordinated national e-health agenda.

Legg makes a valid point about overcoming negative perceptions of e-health which Ian Birks, Australian Information Industry Association (AIIA) Chief Executive, echoes. That is, it is difficult to promote spending on e-health as something that will deliver eventual cost savings for the system.[14] More doctors, nurses and hospital beds are tangible, but spending millions of dollars on technologies which many people have difficulty in comprehending, is not an easy sell for any government. Providing specific funding in the Budget to promote consumer awareness and understanding of this measure and the Government’s proposed overall directions for e-health may have gone some way to address this situation.

In terms of the specific funding in the Budget, the National E-Health Transition Authority (NeHTA) has been enthusiastic. According to its Chief Executive Officer, Peter Fleming, this Budget provides everything the authority asked for.[15]  NEHTA is a government authority and unlikely to be critical of the measure or funding provided.

While others have welcomed this measure, there have been reservations about the extent of the funding. The AIIA, for example, considers that while the funding is positive, it is ‘only a start’.[16] Medical Software Industry Association (MSIA) President, Geoffrey Sayer, agrees that ‘any investment is a good investment’, but adds that ‘the devil is in the details about how the funding will actually translate to a national e-health system’.[17]

Others are less cautious and have criticised the measure as a ‘drop in the ocean’. Professor Mohamed Khadra, for example, argues for ten times as much to be spent on e-health.[18] Independent health technology consultant, David More, also believes the Government has ‘not provided enough detail for a sensible assessment ... Until that (detail) becomes clear, this is so much hot air’.[19]

Further, Geoffrey Sayer has questioned how the funding will be distributed and whether the Government is truly committed to implementing a comprehensive e-health system. Sayer believes the opt-in nature of this measure is ambitious also in assuming a target of 190 000 hospital admissions associated with medication errors will be cut by personal health records implementation.[20]

In his Budget Reply speech, Opposition Leader Tony Abbott noted his support for e-health but he considered ‘hundreds of millions of dollars have already been spent to make this a reality and no more should be spent until it’s certain that we’re not throwing good money after bad’.[21]

The idea of an efficient, secure national electronic personal health record system was arguably one of the most substantial reforms advanced by the NHHRC—an important systematic opportunity ‘to improve the safety and quality of health care, reduce waste and inefficiency, and improve continuity and health outcomes for patients’.[22] The commitment in this Budget to such an e-health future is considerably less than some expected. It is short of recent estimates by the consulting firm Booz and Company which concluded that Australia would need to spend between $4 and $8.5 billion to implement an e-health strategy.[23] As a number of commentators have pointed out, in effect, the commitment in this Budget is but ‘a small investment’.[24] It appears the general consensus is that considerably more funding will need to be invested to ensure viable e-health outcomes.

[1].    National E-Health and Information Principal Committee, National e-health strategy, Deloitte, 2008, viewed 17 May 2010, http://www.health.gov.au/internet/main/publishing.nsf/Content/604CF066BE48789DCA25751D000C15C7/$File/National%20eHealth%20Strategy%20final.pdf

[2].    Australian Institute of Health and Welfare findings published in Australia’s Health 2002, quoted in Deloitte, National e-health strategy, op. cit.

[3].    Deloitte, National e-health strategy, op. cit.

[4].    Ibid.

[5].    National Health and Hospitals Reform Commission, A healthier future
for all Australians: final report
, Commonwealth of Australia, Canberra, 2009, viewed 17 May 2010, http://www.health.gov.au/internet/nhhrc/publishing.nsf/Content/nhhrc-report

[6].    Ibid.

[7].    Australian Government, Budget measures: budget paper no. 2: 2010–11, Commonwealth of Australia, Canberra, 2010, p. 225.

[8].    For example, the Privacy Commissioner has noted that ‘function creep’ was experienced in relation to Canada’s Social Insurance Number which was looked upon as a piece of identification and property. Owners asked for it on apartment rental applications, video stores required it as security for movie rentals, universities and colleges requested it on their application forms and pizza places even used it as a customer number for their delivery system. Office of the Privacy Commissioner, Healthcare identifiers and privacy: discussion paper on proposals for legislative support, submission to the Australian Health Ministers’ Conference, August 2009, viewed 17 May 2010, http://www.health.gov.au/internet/main/publishing.nsf/Content/eHealth-061

[9].    A Cresswell, ‘Experts warn over medical records plan’, The Australian, 13 May 2010, p. 7, viewed 17 May 2010, http://www.theaustralian.com.au/in-depth/budget/experts-warn-over-medical-records-plan/story-e6frgd66-1225865740097  

[10]. Australian Medical Association (AMA) Shared electronic medical record – 2010: position paper, AMA, 2010, viewed 17 May 2010, http://www.ama.com.au/node/5472

[11]. Consumers’ Health Forum, Submission to the 2010–11 Budget,  2009, viewed 17 May 2010, http://www.chf.org.au/pdfs/sub/sub-572-federalbudget-dec09.pdf

[12]. K Deane, ‘E-health is Rudd's little orphan Annie’, The Australian, 27 April 2010, p. 26, viewed 14 May 2010, http://parlinfo.aph.gov.au/parlInfo/download/media/pressclp/47IW6/upload_binary/47iw60.pdf;fileType%3Dapplication%2Fpdf

[13]. Ibid.

[14]. Ibid.

[15]. J Hutchinson, Budget 2010: devil is in the details for e-health, Networkworld website, 13 May 2010 viewed 17 May 2010, http://www.networkworld.com/news/2010/051310-budget-2010-devil-is-in.html?page=1

[16]. F Foo, ‘$467 million boost for e-health records’, The Australian, 11 May 2010, viewed 17 May 2010, http://www.theaustralian.com.au/in-depth/budget/m-boost-for-e-health-records/story-e6frgd7f-1225865227332

[17]. Hutchinson, Budget 2010, op. cit.

[18]. F Foo, ‘Budget 2010: expert slams meagre e-health funding’, The Australian, 12 May 2010, viewed 17 May 2010, http://www.theaustralian.com.au/in-depth/budget/expert-slams-meagre-e-health-funding/story-e6frgd66-1225865353736

[19]. Cresswell, ‘Experts warn over medical records plan’, op. cit.

[20]. Sayer, in Hutchinson, Budget 2010, op. cit.

[21]. T Abbott (Leader of the Opposition), Budget reply speech 2010–11, Commonwealth of Australia, Canberra, 2010; Abbott is referring for example to funding totalling $366.2 million over seven years (from 2005–06 to 2011–12) already committed to e-health development. Senate Community Affairs Committee, Answers to Estimates Question on Notice, Health and Ageing Portfolio, Supplementary Budget Estimates 2009–2010, 21 October 2009, Question: E09–244.         

[22]. NHHRC, A healthier future for all Australians, op. cit.

[23]. Booz and Company, Optimising e-health value: using an investment model to build a program for success,  2010, Sydney, viewed 17 May 2010, http://www.booz.com/media/file/Optimising_e-Health_Value.pdf

[24]. Khadra in Foo, ‘Budget 2010’, op. cit.