Focus on primary healthcare: Medibank chief George Savvides

There are too many perverse incentives and a lack of coordination in Australia’s healthcare system, Medibank boss George Savvides told a CEDA forum yesterday.

Australia’s health system has too many bad incentives leading to higher costs and poorer health outcomes, Medibank Private managing director George Savvides said on Thursday.

One of the worst examples of poor coordination of services, he told a CEDA audience, is the number of patients with chronic illness presenting for acute care with preventable conditions, which is a significant driver of health costs. Avoidable costs will continue to mount as the population ages, and chronic conditions become more widespread, unless the government does more to improve primary care systems, Savvides stated.

The complexity of the funding and coordination of primary care meant many of the heaviest users of the healthcare system defaulted to using far more expensive hospital services, often in poorer health, than would have been the case if adequate primary care had been provided, he argued. Two-thirds of payments for potentially preventable hospitalisations made by Medibank in 2013 were driven by chronic disease.

Savvides added that 3% of Medibank’s customers were responsible for around one-third of all claims, highlighting the potential for savings to be found in better coordinating primary care for those with high needs.

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