Address to CEDA

Address by Jill Hennessy to Committee for Economic Development of Australia

Thank you.

And may I begin by acknowledging the traditional owners whose land on which we meet, and pay my respects to elders past and present.

I’m truly delighted to be here today to talk about our health system.

Because I firmly believe that Victorians deserve a strong health system.

A health system that means that when you go to the emergency department or call an ambulance, you know that you will get the care you need in a timely way.

That when you need elective surgery, you don’t have to wait months and months and months.

A health system that provides good access to primary care.

A health system that empowers people to lead healthier lives, and that educates them about how to stay well.

And a health system that uses the fantastic talents of its medical researchers to discover new diagnostic tools, new treatments, cures, and technologies.

Victoria’s health system is among the best in the world – the most efficient in Australia.

This year, the Andrews Labor Government is spending a total of $15.85 billion across the entire health system; in hospitals, ambulance services, mental health and drugs services, aged care, community health and public health services.

In fact, health makes up around 28 per cent of the State Government’s operating expenses in the 2015-16 Budget.

I am proud of this Government’s strong commitment to health care, with an additional investment of $2.1 billion on last year’s State Budget in health.

But, we know that, without reform, our healthcare system will become unsustainable.

The cost of delivering high-quality care continues to rise, and people are demanding more of their healthcare system.

Our population is growing.

Our population is ageing.

And with that comes increased pressure on our hospitals, and on our community health services.

So, we need to ensure our health system is able to cope with increasing patient demand, and needs.

The National Health Reform Agreement – signed by the Commonwealth and all States and Territories in August 2011 – delivered major reforms to how health is funded and delivered across the country.

The Abbott Government’s decision to walk away from this Agreement will see $17.7 billion cut from Victoria’s public hospitals over the next decade.

You simply can’t cut $17.7 billion from our hospitals and expect there to be no consequences.

These cuts will mean Victorians will be forced to wait even longer for treatment in emergency departments and on elective surgery waiting lists.

And, on top of these funding cuts to Victoria’s hospitals, the Abbott Government has also walked away from key National Partnership Agreements, including the NPA on Improving Public Hospital Services, on Adult Public Dental Services, and on Preventive Health.

These Agreements were made because the Commonwealth recognised that the responsibility to fund health is a shared one between the Commonwealth and the States.

This shared responsibility encourages the Commonwealth to improve the whole health system – including primary care – and to incentivise keeping patients away from hospitals where treatment is more costly, and the greatest burden is placed on the States.

Indeed, health is all of our responsibilities.

What we saw at the meeting of First Ministers last month was a positive sign.

That everyone at least acknowledges that the future funding model being put forward by the Federal Government simply isn’t sustainable, and that there does need to be reform of how health is funded nationally.

There needs to be a mature conversation about how we can work together to ensure our health system delivers the vital services it needs to, to all Australians.

Because when all governments are under pressure to do more with less, we need new ideas to improve efficiency, services and to guarantee the future of our health system.

We need to find new ways to ensure Australians get the care they need, when they need it.

We need to make our health system a stronger one; one which Victorians can rely on.

Before coming to government, we could see that our health system was increasingly struggling and becoming unsustainable.

And we knew that if we didn’t act, Victorians would ultimately suffer.

After four years of cuts by the former State Government and under-investment in health capital, we knew then – and we know now – that we need to take a fresh look at our health system as a whole.

The most recent performance data shows us what we already know.

That for too many years now, patients have been waiting too long for elective surgery, too long for ambulances to arrive, and too long to receive emergency care.

But new data published today shows a hidden crisis in our health system; one I know many people in the room today are acutely aware of.

The wait people face to receive specialist outpatient care.

The data released today shows huge variation across health services.

And when a patient is waiting an average of well over a year for their first ENT appointment in Bendigo, or nearly 6 months to see a gynaecologist at Eastern Health, there are clearly problems in the system that cannot be ignored.

As a Government, we are not blind to the challenge that lies ahead.

But it is a task that we are capable of addressing, and one that we have embraced.

One of our first actions upon entering office was to appoint highly-respected surgeon and former President of the Australian Medical Association, Dr Doug Travis, to undertake a review of Victoria’s public hospital capacity, and to recommend how best to increase the system’s capacity.

It is the most comprehensive audit ever undertaken into Victoria’s public hospitals.

The Government was provided with Dr Travis’ Interim Report in April this year, and today I want to detail how we are going to implement his recommendations, as well as the recommendations of Dr Travis’ Final Report, which is being released today.

What the Travis Review has done is provide us with a very clear understanding of what hospital capacity is, and how it is used and distributed.

The Review highlighted that it is important to move beyond thinking about capacity just in terms of the number of beds in a ward – a figure that means very little to a patient waiting for care.

Rather, we should be talking about a health service’s capacity to provide care in a timely way, in the most appropriate setting – sometimes in a bed, sometimes in a chair, and sometimes outside the walls of a hospital.

And with this concept in mind, how can we do things differently to make the most of existing capacity, and to ensure the State’s health resources are best utilised to meet the expected increase in demand.

Currently, there is a mismatch between patient demand and hospital capacity.

There is an uneven distribution of resources across the State when it comes to what beds are available and where… and what beds patients need and where.

In the recent State Budget, the Government provided $200 million to open 101 new beds and other points of care right across Victoria as part of the Hospital Beds Rescue Fund.

61 of these beds are already open, and minor construction work is occurring to allow the rest of the beds to open within the next 6 months.

But simply opening extra beds is not enough.

Rather, the Travis Review says that the aim is to treat more patients more effectively, within clinically appropriate timeframes, in the most suitable locations, and in the most cost-effective way.

To achieve this, health services need to be innovative.

Indeed, investment in improving healthcare has seen many excellent projects achieve significant productivity and capacity enhancements.

Innovation in healthcare delivery occurs almost every day in our health system.

Healthcare workers are acutely attuned to the need to improve the way they deliver services, share information, and work together.

But the changes – like redesigning the way a patient is triaged in emergency – are usually small, and the impacts are typically only seen at the local institution or individual patient level.

If innovation is the key to sustainably increase the capacity of the health system to meet growing demand, the real challenge now is how to identify and embed major innovation across the whole system.

Dr Travis has recommended in his Final Report that Victoria establish a new innovation program.

A program that combines the knowledge and ideas of people right across our healthcare system, and encourages them to work together to identify ways to address challenges and implement them.

And so I can today announce that the Government will establish Better Care Victoria.

Better Care Victoria will bring together the skills and experience of those across the research, business, and health sectors, with a mission to increase our health system’s capacity.

It will fold in and build on the accomplishments of the Health Innovation and Reform Council, and will be guided by a set of principles:

  • To support the whole Victorian health system to work better together to improve the interface between primary and acute care,
  • To enable the development of new programs and ideas that can increase health system capacity,
  • and to facilitate an evidence-based approach to ensure they are feasible and sustainable over the long term.

I know that innovation is already an essential part of everyday business for health services.

But Better Care Victoria will work closely with all Victorian health services to support and drive innovation, sharing knowledge and expertise across the whole health system, focusing innovation efforts across the state, as well as identifying new models in other jurisdictions and countries that could be adapted to the Victorian context.

And, to oversee this program of work, I will be appointing a Board made up of respected health sector experts with specialist knowledge and skills in leadership, health, and change management.

What’s become clear through the consultation undertaken by Dr Travis is that there are four key areas of innovation that need to be focussed on:

  • Patients with chronic and complex medical needs – such as a patient experiencing kidney failure who is also struggling to manage their diabetes,
  • Providing appropriate care outside the walls of the hospital – this could at home, or in the community,
  • Reducing variation in the care provided – so that a patient knows that they can turn up to any hospital in Victoria providing that care and be treated in a similar way,
  • and, as demonstrated so clearly today in the Specialist Clinic Activity and Wait Time Reports – access to outpatient care.

These areas were identified because they represent a significant proportion of health service activity.

And so providing a new focus and greater effort on these areas has the potential to make a significant impact on the system’s capacity and to improve patient outcomes.

As part of the Review, public health services provided Dr Travis with a range of interesting proposals, detailing innovations which have already shown benefits in their local settings, and other promising ideas to tackle service issues.

One example – designed to target patients who, due to a range of physical and lifestyle factors would be at risk of a rapid decline in health – involves a partnership between a hospital and community based services.

Through this program, services intervene at a much earlier stage to offer tailored solutions that meet the needs of the individual – before they experience decline.

Another example is a hospital which introduced a seven-day-a-week model of care in order to improve patient throughput.

This project sees a reduction in variation of care provided in the general wards during the week and particularly over the weekend.

This means that patients experience the same service every day of the week.

It has resulted in a reduction in the average length of stay, with thousands of bed days saved over 12 months, more timely treatment of other patients, reduction in mortality, and better flow through the emergency department.

With the support of Better Care Victoria, these types of innovative programs can be scaled up and we could see benefits right across the whole system.

This could be through the provision of:

  • seed funding to initiate new programs,
  • oversight to enable shared learnings and coordinated roll-out to other health services, or
  • additional expertise to promote continual improvements.

So, to support this important work, the Government will establish a Better Care Victoria Innovation Fund.

This Fund will be used to foster innovation, support the testing of ideas, and to scale up proven innovations.

But we know that for innovation to be truly effective, collaboration and active partnerships between all health services, across all settings, and between health professionals – whether in the public, private or not-for-profit sectors – will be vital.

In particular, partnerships between health services with high demand and neighbouring health services with spare capacity must be fostered and supported.

We know from a recent Auditor-General’s Report that in some parts of Victoria, patients are waiting three weeks for imaging services, while in another part of the State, the wait is just a few days.

So we need to realise the vision of a collaborative hospital network, where capacity and infrastructure is better utilised so that patients in one part of the State who are waiting too long can be treated elsewhere.

We want to promote partnerships between neighbouring health services, so that patients get the treatment they need sooner.

And the Government’s $60 million to boost elective surgery activity in the recent State Budget will help achieve this.

But, these partnerships must also extend beyond just one part of the system.

We need start to see partnerships that span across the community-hospital interface.

Patients also need to be informed and understand where there is capacity within the system, and that’s why it’s important to change the way we talk about capacity.

Releasing specialist outpatient clinic waiting times data – as we are today – is the first step in improving the way we report on capacity.

And it represents significant progress towards increased transparency in health service reporting – a matter about which we will be legislating later this year.

The Travis Review noted that the complexity of funding models can create barriers, particularly when there are multiple health care funding sources, for example when caring for people with chronic and complex conditions.

To address this, the Government has initiated a pilot of a new funding approach, HealthLinks, that encourages health services to pool funds around specific high-risk patients, such as those experiencing chronic disease.

In doing this, health services can intervene earlier, providing specialised coordinated care, and to wrap appropriate tailored services around the individual to achieve better outcomes, without the risk of losing revenue.

This approach is similar to those being promoted in the United States under the banner of ‘accountable care’, however, our trial program will see existing funds converted to encourage new approaches and drive systemic change over time, rather than being funded as a stand-alone approach.

In the first phase, a small number of large health services will collaborate with the Department of Health and Human Services to pilot the new funding approach, with the program to commence at the start of next year.

The Government is also working with health services to break down other barriers to sustainable and accessible services.

We will continue to support the Strengthening our Regional Hospitals Initiative, which is focused on supporting our outer metropolitan, and rural and regional health services to actively work together to deliver more sustainable services.

This initiative has already seen great progress, with health services working together to address a range of opportunities including streamlining local procurement processes, improving access to clinical services through the use of telehealth, and supporting more effective patient flow between services through the use of regional bed management strategies.

The aim of the Strengthening our Regional Hospitals Initiative is to support local actions and ensure innovations are shared and developed across multiple health services.

Because by bringing partners together, we can enhance the pace and scale of innovation across our health system.

Innovation is absolutely critical to ensure we are best placed to meet future demands; however, we must also ensure our system is appropriately equipped to support these service innovations.

And this requires us to make sure we have the right planning and the right infrastructure in place.

The Travis Review found that while our hospital system had capacity that could be commissioned to meet growing demand, we need to invest more in building and in renewing our hospital infrastructure to ensure facilities are fit-for-purpose.

And we need to invest so that our hospitals can respond not only to the changing levels of demand, but also to changing clinical practices and models of care.

Victoria is growing at a rapid pace, and governments need to plan and deliver for the future needs of an expanding population and increasing constraints on existing infrastructure.

This Government has committed over $560 million to build new hospitals, expand and redevelop health and ambulance facilities, and to purchase and upgrade equipment over the next four years.

This includes:

  • $200 million for a new Women’s and Children’s Hospital in Sunshine – which I’m very proud will be named after my dear friend and the former Premier, Joan Kirner,
  • $106.3 million for an expansion of Casey Hospital in Melbourne’s east,
  • and $10 million to build and fit-out an additional cath lab at Ballarat Health Services.

But, as we know, our growing and ageing population, and increasing prevalence of chronic conditions, will continue to place greater pressure on our health system.

While the Travis Review found that Victorian public hospital facilities are generally well equipped – in terms of physical capacity – to meet the immediate challenges of a growing population, it also found that, in some areas, the available capacity does not necessarily line up with demand from the local community.

And so, just opening some of the existing spare capacity will not necessarily address demand, and could actually be an inefficient use of resources.

Rather, the Travis Review tells us that we need to identify current and future demand, and improve the link between demand for health care services and capacity improvement so we’re more effective and efficient about how resources are distributed.

As I flagged in April in response to the Travis Review’s Interim Report, the Government will develop a state-wide strategic services and infrastructure plan.

This Plan will better align health service demand with operational and capital funding for new and replacement infrastructure.

It will ensure the capacity of our health system is better positioned to respond to demand.

The Department of Health and Human Services have established a new framework for health system planning, and work is already underway to develop this state-wide plan.

This approach is consistent with the Government’s commitment to reform major infrastructure planning.

And in June, the Government introduced legislation to establish an independent expert authority – Infrastructure Victoria – which will promote rigorous and transparent decision making, and improve public debate and consensus about priority infrastructure projects in Victoria.

It will also support improved social, economic and environmental outcomes for the state.

Health planning is a critical aspect of the state’s overall long-term infrastructure planning.

And the state-wide strategic services and infrastructure plan for health will have a 20-year outlook.

The Plan will, of course, identify more immediate opportunities – for example, those that we should seek to achieve within the next 5 years.

The development of this state-wide plan represents a significant opportunity to set the future direction and strategy for the Victorian health system.

And it will include the development and promotion of a set of core principles that will help us re-build and re-shape the system to achieve a better balance between community-based and hospital-based services well into the future.

It will be a comprehensive system-wide plan.

And the Final Report of the Travis Review identifies that the development of such a plan will be critical to effectively target the future allocation of recurrent and capital funding to best meet the health needs of Victorians.

Of course, the development of such a plan is a significant undertaking, and the first plan will be published in 2017.

Development of the Plan will of course be informed by extensive consultation with the sector and other stakeholders.

Because I consider it absolutely critical to consult widely with health professionals who work in the Victorian public health sector.

They’re the ones on the front line, at the coal face; who know what the issues and challenges are.

It is they who understand the barriers and opportunities for improvement.

And they play a vital role in achieving an integrated and high-performing health system.

Their knowledge and insights will be essential as we work together to improve the system to better respond to the challenges ahead.

And to ensure fulsome consultation, I want to ensure a process for ongoing engagement.

And so consultation and communication with the health sector will be a key function of Better Care Victoria.

Collaboration between health services, consultation between government and the workforce; it is by working together that we will build and strengthen our health system.

So, next month, on Friday 18 September, I will convene a Health Reform Summit to engage and consult broadly with the sector on setting the vision for our health system for the next two decades.

A vision which places the role of the public health system within the broader health reform agenda for Australia.

This Summit on Health Reform will bring together around 100 of Victoria’s health sector experts, and hopefully many of you in the room today.

It will underpin the thinking around the development of the 20-year state-wide strategic services and infrastructure plan.

And it will provide an opportunity to discuss and debate a range of longer term health reform opportunities, all focused on ensuring Victoria’s health system remains at the forefront of high-quality, effective and efficient health care delivery.

One such area is how we can effectively respond to the growing prevalence of chronic disease.

Because the fact is: we must re-design our system so that we are not only better positioned to effectively manage chronic disease, and reduce avoidable hospital admissions, but also to prevent and delay the onset of these conditions to begin with.

In Victoria, it is estimated that around 10 per cent of patients with chronic diseases contribute to 55 per cent of hospital inpatient days for conditions that are largely preventable and that could be better treated earlier in the community.

During 2014-15, there were around 60,000 avoidable admissions in Victorian hospitals.

And it is estimated that avoidable hospital admissions will grow to nearly 80,000 by 2025-26 if things don’t change.

We must do more to reduce the number of people who are being admitted to hospital for conditions that could have been avoided.

This important work will form part of the COAG national health reform agenda that the Victorian Premier has been charged with leading, together with Tasmania.

This will consider the reforms needed to build a stronger community-based primary care sector which has better connections with specialised health services, so that people can access the appropriate care in their community.

Achieving this will help alleviate pressure on emergency departments and specialist health services which means that they can be freed up to manage acute health and emergency care.

Ultimately, a stronger community-based primary care sector and better systems that can support coordinated care across sectors are needed if we are to support the increasing number of people living with chronic health problems.

I want to challenge participants in the Summit next month – and all of you – to not only think differently about our how our health system could look 20 years from now, but to also commit to promoting innovation and change as we move towards that future.

People right across the health system must remain engaged in the continuing search for effective innovation.

I want to thank CEDA for organising today’s event and for the opportunity to speak to you all today about this very important issue.

Everything that I have spoken to you about today is about improving the experience of every patient, across every aspect of the health system in Victoria.

If we lose sight of the patient, we have lost our purpose.

As I stated earlier, supporting people to optimise their health and wellbeing is fundamental.

It is core to my values.

It is core to this Government’s agenda.

It is core to every Victorian.

Because not only does good health have individual benefits, it also supports a more prosperous and vibrant community.

And this Government will invest in health to not only boost the capacity of our hospitals, but ultimately to ensure that Victorians can access high-quality treatment and services, irrespective of where they live or what they earn.

Thank you.