A/Prof Anthony Landgren - Healthscape - Asia-Pacific focus: What can we learn from our region?
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Transcript of A/Prof Anthony Landgren - Healthscape - Asia-Pacific focus: What can we learn from our region?
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Asia-Pacific Pathology Practice
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ASIA-PACIFIC FOCUSWHAT CAN WE LEARN FROM OUR REGION?
Tony Landgren
Chief Pathologist & Medical Director
Healthscope Pathology
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• Personal perspective derived from comparative analysis of diagnostic practices operated by Healthscope in the Southeast Asia Pacific region.
• Analysis is not intended to be judgemental or critical but rather to identify and understand differences as a means of improving diagnostic performance and business performance in diverse environments.
• Healthscope is an Australian registered public company operating in Australia, New Zealand, Malaysia, Singapore and Vietnam with >20,000 staff, >40 hospitals, >60 human and veterinary laboratories and >60 medical centres.
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Asia Pacific Region
• Australia *• Brunei Darussalam• Canada• Chile• People's Republic of China• Hong Kong, China• Indonesia *• Japan• Republic of Korea• Malaysia *• Mexico• New Zealand *• Papua New Guinea *• Peru• The Republic of the Philippines• The Russian Federation• Singapore * (Secretariat APEC)• Chinese Taipei• Thailand *• United States of America• Viet Nam *
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Australian Pathology Activity in Southeast Asia-Pacific Region
• Laboratory services
- Sonic Healthcare - Australia, New Zealand
- Healthscope - Australia, New Zealand, Vietnam, Malaysia & Singapore
• Pathology Data Centres
- Primary Health (India)
- Healthscope (Malaysia)
• Quality Assurance Programs and pathologist training programs (RCPA)
• Numerous equipment, reagent/consumable and service suppliers
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Pathology Service Diversity
• Disease
• Government health policy
• Economic factors
• Referrer expectations
• Patient expectations
• Operating environment & opportunity
• Cost
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Disease Diversity - Communicable
• Developing Countries- Immunisation variability -> consequences - Gastroenteritis- Hepatitis- Malaria- Dengue- Tuberculosis- Sexually transmitted diseases inc. HPV- HIV
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Disease Diversity - Non-communicable
• Emerging with improved nutrition, increasing age……
- Diabetes
- Obesity
- Hypertension & ischaemic heart disease
- Chronic renal disease
- Malignancy
- Smoking related disease
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Government Health Policy
• Heavily weighted to communicable diseases
• Public health programs – housing, nutrition, security of water supply, sanitation, education, vaccination, primary health care……
• Private health care – most primary health care, fertility, child health, fitness to work, aesthetic surgery……
• Diagnostic pathology – education, regulation, limited direct funding of testing…..
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Health Economics - What did we learn from the GFC?
• Regional decline in utilisation of laboratory services was an immediate response and in direct proportion to economic decline.
• Regional recovery in utilisation of laboratory services highly variable and does not seem to be aligned to economic improvement.
• Major impact on disease monitoring testing - HbA1C…….
• Minor impact on microbiological testing.
• Doctors and patients appear to have made a choice to use fewer and more limited services.
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Diagnostic Markets
• Local partnerships
- the facilitation problem
- the bureaucracy problem
• Clinician gate keepers
- pathology request
- specimen collection
- patient billing
* drug prescribing, dispensing, billing
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What do referrers expect?
• Australia & New Zealand
- Quality/reliability
- Accessibility for patients – collecting arrangements
- Fast turn around time
- No out of pocket expenses to patient
(plus pathology service choice linked to rent paid)
• Singapore & Malaysia
- Quality/reliability
- Fast turn around time
- Competitive price -> margin for referring doctor (mostly self collection)
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What do patients expect?
• Assume high quality/reliability
• Best price (or no out of pocket expense)
• Referring doctor will make decisions regarding necessary testing
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Laboratory Management Models
• Operational and financial skills
• Medical and scientific diagnostic skills
• Customer relationship and marketing skills
Strong marketing, commercial contract and debt management skills
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Economics of Diagnostic Testing
• Average Fees
• Pricing arrangements
• Billing arrangements
• Labour mix and costs
• Other operating costs
• Operating margins?
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Market Distortions
• Who are the customers?
• Who are the payers?
• What are the ancillary commercial arrangements?
• What is the fee schedule history?
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Economics of Diagnostic Testing
Average episode fee in $AUS
• Australia $65-75 (State variability)
• New Zealand $45 (75% community pathology)
• Singapore $30
• Malaysia $15
• Vietnam $5
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Pricing of Diagnostic Testing
Pricing arrangements
• Government determined fee schedule – Medicare
• Contract determined fee schedule – health services, referrers…
• Laboratory determined fee schedule
• Market competition determined fee (individual client and schedule)
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Billing and Paying for Diagnostic Services
Billing Arrangements
• Test related (Singapore & Malaysia)
• Episode related (point in time) Australia & New Zealand
• Mostly episode related (health event) Vietnam
Payer Arrangements
• Government (Australia, New Zealand + public health elsewhere) – Individual patient account to payer(s).
• Patient indirect through referring doctor (Singapore & Malaysia) – Monthly account to doctor.
• Patient direct (Vietnam) - off schedule or uncontracted elsewhere)
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Labour Management
Labour cost as a percentage of average fee
• Australia 45-55%
• New Zealand 38-42%
• Singapore 32-42%
• Malaysia ~ 30%
• Vietnam ~ 20% (local component)
~ 80% (exported component)
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Labour Management
Pathologist/Scientist/Technical Officer/Laboratory Assistant Mix
• Australia 2/58/25/15%
• New Zealand 2/48/30/20%
• Singapore 2/3/40/55%
• Malaysia 2/3/35/60%
• Vietnam 0/1/19/80%
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Other Operating Costs
• Equipment/Reagents/Consumables (25-30%)
• Rent (5-20%) collecting centres and laboratories
• IT (5%)
• Regulatory compliance - EQA, IQA, Accreditation….(1-2%)
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Diagnostic Service Difficulties
LABORATORY EVENT NOTIFICATIONS MALAYSIA/SINGAPORE 2013 (>400)- Infrastructure problems dominate (>x100 Australia and New Zealand)
• Pre analytical error 25% • Analytical error 22%• Electricity supply failure 12%• Water supply failure 12%• Transport delay 10%• Data transmission failure 8%• Reagent storage failure 5%• Waste disposal unavailability 2%• Export & import of materials delay 2%• Other
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Operating MarginsNot a secret!
Singapore>New Zealand>Malaysia>>>>Australia
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Improving Diagnostic Performance
• Education (external & laboratory based)
• Competency Certification (point in time and continuing)
• Accreditation (NATA, IANZ…)
• Internal Quality Assurance
• External Quality Assurance (QAP….)
• Regulation
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What have we learnt?
• Business of pathology is hard in Southeast Asia Pacific region but it is of high quality and profitable despite:
- Complex political and health policy environments
- Developing and vulnerable economies
- Developing regulatory environments
- Long investment timeline
- Interesting referrer relations
- Variable business law & ethics
- Challenging diagnostic demands
- Technical support and infrastructure problems
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What have we learnt?
• Pathology practice viability irrespective of the local economic environment depends on managing operating expenses because income is relatively fixed and/or driven by market competition.
• Labour management is critical to control of costs.
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What have we learnt?
• Management skills must align with the external operating environment.
• Medical and scientific diagnostic knowledge and skills while critical to the internal operating environment do not necessarily align with the external operating environment.
• Australian pathology funding and regulatory model does not support rational use of diagnostic testing or laboratory viability.
• Australian concerns about free market influences on pathology practice are not supported by my experience of Eastern Asia Pacific private sector operation or New Zealand community pathology competitively tendered environment.
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What have we learnt?
• Distortions in funding and operating models effect the viability and quality of diagnostic services.
• Managers in Australia look to laboratory operational changeto make savings not the external service infrastructure necessary to market, collect and transport the specimens.
• Managers in Southeast Asia Pacific look to customer service improvement to increase business and maintain pricing.
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What have we learnt?
• In Australia uncontrolled collecting centre rent and capital contribution arrangements coupled with an inflexible and outdated laboratory staffing model and a distorted pricing schedule when compared to our near neighbours threatens the viability and internationally recognised high standard of our laboratory services. (This is despite a strong economy in a highly developed social and regulatory environment.)
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What can we learn?
• Stressed systems tend to throw up innovative ways of doing things to survive.
• Engaging commercially and professionally with our neighbours has significant mutual benefit.
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Acknowledgements
• Healthscope Pathology
• Melbourne Health – Royal Melbourne Hospital
• University of Melbourne – Department of Pathology
• Royal College of Pathologists of Australasia
• RCPA QAP
• National Health and Medical Research Council
• Australian Council on Health Care Standards