Pricing for safety and quality in healthcare – “winter is coming”

Mr Benjamin Magid1, Dr Cathryn Murphy2, Ms Julie Lankiewicz3, Ms Natalie Lawandi1, Dr Anthony Poulton1

1Medtronic Australasia Pty Ltd, Macquarie Park, Australia,

2Bond University, Gold Coast, Australia,

3Medtronic Minimally Invasive Therapies Group, Boston, USA

A global shift in healthcare funding is currently underway. This shift is from fixed “fee for service” payments to “value based” payment models.

In 2012, the Australian Commission on Safety and Quality in Healthcare (ACSQHC) and the Independent Hospital Pricing Authority (IHPA) formed a joint working party (JWP) to review global efforts towards pricing for safety and quality in healthcare. At the time, the JWP considered these approaches unsuitable for the Australian public hospital system. Subsequently, a 2016 ministerial direction ensured that funding changes will be implemented from 1 July, 2018, targeting hospital-acquired complications (including Healthcare-Associated Infections) in Australian public hospitals.

This paper provides an overview of the public funding changes targeting hospital acquired complications, and commentary on the implications for Australian infection control professionals. Private hospital funding changes targeting hospital acquired complications are also discussed. A case study is presented based on the experience in the United States with the Hospital Value Based Purchasing Program. Unintended consequences of such funding models are discussed, as well as proposals to combat unintended consequences in the Australian context. Finally, suggestions are presented for how Australian infection control professionals can best respond to the changing funding models targeting hospital acquired complications in the public hospital system.