1 00:00:04,050 --> 00:00:06,480 Sean Aylmer: Welcome to the Fear and Greed Daily Interview, I'm Sean 2 00:00:06,480 --> 00:00:09,869 Sean Aylmer: Aylmer. Healthcare in Australia has been in sharp focus over 3 00:00:09,869 --> 00:00:12,570 Sean Aylmer: the last three years, everything from the capacity of our 4 00:00:12,570 --> 00:00:15,330 Sean Aylmer: infrastructure to deal with the pandemic to the state of 5 00:00:15,330 --> 00:00:18,360 Sean Aylmer: our hospitals and the role of private operators within the 6 00:00:18,360 --> 00:00:21,390 Sean Aylmer: broader healthcare sector. I thought we should take a closer 7 00:00:21,390 --> 00:00:24,270 Sean Aylmer: look at this space, both from a social perspective and 8 00:00:24,270 --> 00:00:28,440 Sean Aylmer: from the perspective of the businesses operating. Lucy d'Arville is 9 00:00:28,440 --> 00:00:31,290 Sean Aylmer: the head of the Bain's Australia and New Zealand Healthcare & Life 10 00:00:31,290 --> 00:00:34,080 Sean Aylmer: Sciences practice. Lucy, welcome to Fear and Greed. 11 00:00:34,500 --> 00:00:35,250 Lucy d'Arville: Thank you, Sean. 12 00:00:36,000 --> 00:00:38,879 Sean Aylmer: So how would you describe the current state of healthcare 13 00:00:39,240 --> 00:00:41,760 Sean Aylmer: in Australia? Let's start with maybe hospitals. 14 00:00:42,479 --> 00:00:47,490 Lucy d'Arville: Absolutely, Sean. I think it's helpful to understand Australia's healthcare 15 00:00:47,490 --> 00:00:51,180 Lucy d'Arville: system in the context of where it was the pre- 16 00:00:51,180 --> 00:00:54,990 Lucy d'Arville: pandemic and then where it is now post- pandemic. So 17 00:00:55,290 --> 00:01:00,510 Lucy d'Arville: between 2010 and 2020, our public hospital sector was very strong. 18 00:01:00,870 --> 00:01:03,810 Lucy d'Arville: And so we were seeing a decline in private health 19 00:01:03,810 --> 00:01:08,190 Lucy d'Arville: insurance penetration, which was putting private hospitals under pressure, as 20 00:01:08,250 --> 00:01:12,030 Lucy d'Arville: individuals were not seeing the value of private health insurance 21 00:01:12,030 --> 00:01:15,210 Lucy d'Arville: because there was a very strong public health system, which, 22 00:01:15,270 --> 00:01:18,570 Lucy d'Arville: as you know, is universal and so provides free access. 23 00:01:19,170 --> 00:01:22,530 Lucy d'Arville: That has really shifted with the pandemic. And so we have 24 00:01:22,530 --> 00:01:27,929 Lucy d'Arville: seen private health insurance penetration increasing post the pandemic. So 25 00:01:27,930 --> 00:01:31,530 Lucy d'Arville: it's now up around 47% of Australians. And that in 26 00:01:31,530 --> 00:01:36,810 Lucy d'Arville: turn is creating demand in the private sector for private 27 00:01:36,810 --> 00:01:41,940 Lucy d'Arville: hospital because Australians are now concerned about their health and are 28 00:01:42,000 --> 00:01:45,030 Lucy d'Arville: very much wanting to make sure that they've got that 29 00:01:45,030 --> 00:01:48,210 Lucy d'Arville: protection if they need it and go to the private 30 00:01:48,210 --> 00:01:51,360 Lucy d'Arville: hospital sector. So I would say that there is a 31 00:01:51,360 --> 00:01:55,110 Lucy d'Arville: shift at the moment between the public and private hospital dynamic. 32 00:01:55,890 --> 00:01:59,130 Lucy d'Arville: I would say the hospital sector as a whole is 33 00:01:59,130 --> 00:02:02,130 Lucy d'Arville: still very challenged. You will hear a lot of Australians 34 00:02:02,130 --> 00:02:06,030 Lucy d'Arville: use the word post- COVID and COVID is still very 35 00:02:06,030 --> 00:02:09,750 Lucy d'Arville: much apparent and prevalent for our frontline working in the 36 00:02:09,750 --> 00:02:13,980 Lucy d'Arville: hospital sector. And so you touched on it in your introduction, 37 00:02:13,980 --> 00:02:18,450 Lucy d'Arville: there are workforce challenges which are incredibly hard. And at 38 00:02:18,450 --> 00:02:22,739 Lucy d'Arville: any given time, wards in hospitals, whether it's public or private, 39 00:02:22,740 --> 00:02:26,700 Lucy d'Arville: will be operating down on capacity between 15 to 20% 40 00:02:26,700 --> 00:02:30,150 Lucy d'Arville: on any given day. And you're also seeing, in the 41 00:02:30,150 --> 00:02:35,820 Lucy d'Arville: public sector, very big backlog issues and wait times. The AMA (Australian Medical Association) 42 00:02:35,850 --> 00:02:38,489 Lucy d'Arville: last year, in their report for the end of financial 43 00:02:38,490 --> 00:02:43,860 Lucy d'Arville: year 2020, reported that they estimated 300,000 patients nationally were 44 00:02:43,860 --> 00:02:46,770 Lucy d'Arville: on a wait list and they estimate that that is 45 00:02:46,770 --> 00:02:49,470 Lucy d'Arville: likely to blow out to be half a million Australians 46 00:02:49,470 --> 00:02:50,910 Lucy d'Arville: by the end of FY23. 47 00:02:52,110 --> 00:02:57,540 Sean Aylmer: Wow, that's not good. Having said that, Lucy, the government 48 00:02:57,540 --> 00:02:59,640 Sean Aylmer: wants people to be in private healthcare though, doesn't it? 49 00:03:01,139 --> 00:03:03,419 Lucy d'Arville: I would say that the government wants to ensure that 50 00:03:03,419 --> 00:03:06,600 Lucy d'Arville: we have a vibrant public and private healthcare sector because 51 00:03:06,600 --> 00:03:09,930 Lucy d'Arville: we need both to be able to maintain our universal 52 00:03:09,930 --> 00:03:13,350 Lucy d'Arville: healthcare system. And we want to make sure that our 53 00:03:13,560 --> 00:03:17,730 Lucy d'Arville: public healthcare system is there for those individuals that can 54 00:03:17,730 --> 00:03:21,060 Lucy d'Arville: access care and we can do so in a way 55 00:03:21,060 --> 00:03:23,730 Lucy d'Arville: that they are not left with some of the accessibility 56 00:03:23,730 --> 00:03:26,489 Lucy d'Arville: challenges that you can see in markets like the US. 57 00:03:27,450 --> 00:03:30,150 Lucy d'Arville: And so it is incumbent, I would say, on Australians 58 00:03:30,150 --> 00:03:32,790 Lucy d'Arville: and the government to encourage people with the means to 59 00:03:32,790 --> 00:03:35,880 Lucy d'Arville: pay to ensure that we have a vibrant private hospital 60 00:03:35,880 --> 00:03:39,480 Lucy d'Arville: sector because that ensures the sustainability of the sector as 61 00:03:39,480 --> 00:03:43,110 Lucy d'Arville: a whole. It also provides a very attractive employment pathway 62 00:03:43,260 --> 00:03:45,270 Lucy d'Arville: for doctors as well. And a number of our doctors 63 00:03:45,270 --> 00:03:48,000 Lucy d'Arville: work between the public and private sectors. 64 00:03:48,840 --> 00:03:53,910 Sean Aylmer: Okay, so not withstanding the AMA's numbers in terms of 65 00:03:53,910 --> 00:03:56,880 Sean Aylmer: wait lists and things like that, are we heading in 66 00:03:56,880 --> 00:03:59,940 Sean Aylmer: the right direction? Are we not going fast enough perhaps? 67 00:04:00,690 --> 00:04:06,300 Lucy d'Arville: I would say that the pandemic has enabled innovation and 68 00:04:06,300 --> 00:04:10,560 Lucy d'Arville: disruption in a way that we have not seen previously 69 00:04:10,560 --> 00:04:16,229 Lucy d'Arville: in healthcare. Healthcare typically moves in a 10 to 20- year timeframe. 70 00:04:16,529 --> 00:04:19,800 Lucy d'Arville: And what we've seen in the last three years is 71 00:04:19,950 --> 00:04:23,339 Lucy d'Arville: an acceleration of things like new models of care, where 72 00:04:23,339 --> 00:04:26,219 Lucy d'Arville: you were seeing the embrace of telehealth, you're seeing the 73 00:04:26,220 --> 00:04:30,630 Lucy d'Arville: embrace of remote models of care, and you're seeing hospitals 74 00:04:30,630 --> 00:04:34,680 Lucy d'Arville: really thinking creatively about, " Well, how can we do more 75 00:04:34,950 --> 00:04:37,380 Lucy d'Arville: in the home with our patients? Or how can we 76 00:04:37,380 --> 00:04:39,990 Lucy d'Arville: reduce the time that people have to spend in hospital?" 77 00:04:39,990 --> 00:04:43,770 Lucy d'Arville: So I would say that there is an element of innovation 78 00:04:43,770 --> 00:04:47,970 Lucy d'Arville: that is happening. To improve our hospital sector, you actually 79 00:04:47,970 --> 00:04:50,969 Lucy d'Arville: need to take a systems approach. And I think what 80 00:04:51,120 --> 00:04:54,570 Lucy d'Arville: concerns me is when people look at our healthcare system in 81 00:04:54,570 --> 00:04:58,380 Lucy d'Arville: silos, they're missing the point that it's a very complex 82 00:04:58,380 --> 00:05:02,849 Lucy d'Arville: system that interacts across primary care, secondary and tertiary care, 83 00:05:02,850 --> 00:05:05,580 Lucy d'Arville: as well as allied health and community- based care. And 84 00:05:05,580 --> 00:05:08,130 Lucy d'Arville: any change that you make in one of these silos 85 00:05:08,130 --> 00:05:10,920 Lucy d'Arville: is going to have flow- on effects. And to answer 86 00:05:10,920 --> 00:05:12,930 Lucy d'Arville: your question about are we moving fast enough, I think 87 00:05:12,930 --> 00:05:17,310 Lucy d'Arville: it's encouraging that the new government has established its Medicare 88 00:05:17,580 --> 00:05:22,440 Lucy d'Arville: Taskforce and has released its first report, Strengthening Medicare. The 89 00:05:22,440 --> 00:05:27,060 Lucy d'Arville: concern that I have is healthcare is such a political 90 00:05:27,300 --> 00:05:30,420 Lucy d'Arville: hot potato. And so in order to be able to 91 00:05:30,779 --> 00:05:33,540 Lucy d'Arville: drive reform, any government is going to have to have 92 00:05:33,540 --> 00:05:36,300 Lucy d'Arville: the political capital to do so, and we are not 93 00:05:36,300 --> 00:05:39,630 Lucy d'Arville: seeing that pace of change that we would like because 94 00:05:40,080 --> 00:05:42,390 Lucy d'Arville: of the challenge it is to reform healthcare because of 95 00:05:42,390 --> 00:05:45,750 Lucy d'Arville: what can happen at the electoral box. And we saw 96 00:05:45,750 --> 00:05:48,630 Lucy d'Arville: that with the Medicare scare campaign a few years ago. 97 00:05:49,260 --> 00:05:51,120 Sean Aylmer: Stay with me, Lucy. We'll be back in a minute. 98 00:05:57,060 --> 00:06:00,210 Sean Aylmer: My guest this morning is Lucy d'Arville, head of Bain's 99 00:06:00,240 --> 00:06:05,670 Sean Aylmer: Australia and New Zealand Healthcare & Life Sciences practice. Okay, one 100 00:06:05,670 --> 00:06:07,770 Sean Aylmer: of the things that does seem to be getting voters 101 00:06:07,770 --> 00:06:12,450 Sean Aylmer: attention is the state of GPs. Not individual GPs, the 102 00:06:12,450 --> 00:06:16,049 Sean Aylmer: state of the network of GPs in Australia. It just 103 00:06:16,050 --> 00:06:19,140 Sean Aylmer: seems very challenging for someone to go to university to 104 00:06:19,620 --> 00:06:22,020 Sean Aylmer: work in a hospital, come out, become a GP, and 105 00:06:22,020 --> 00:06:25,740 Sean Aylmer: actually make a living. It seems that we need changes 106 00:06:26,430 --> 00:06:28,620 Sean Aylmer: at that level of the health service. 107 00:06:29,490 --> 00:06:33,690 Lucy d'Arville: We absolutely do, Sean. Our primary care system is the 108 00:06:33,690 --> 00:06:37,650 Lucy d'Arville: backbone of our healthcare system. And we need to have 109 00:06:37,650 --> 00:06:42,000 Lucy d'Arville: an incredibly strong primary care network in order to make 110 00:06:42,000 --> 00:06:45,300 Lucy d'Arville: sure that we are focused both on prevention and wellbeing 111 00:06:45,450 --> 00:06:48,359 Lucy d'Arville: of individuals, as well as making sure that the right 112 00:06:48,360 --> 00:06:51,210 Lucy d'Arville: chronic disease management is in place, as well as ensuring 113 00:06:51,210 --> 00:06:54,900 Lucy d'Arville: that individuals get the right referrals into the hospital network 114 00:06:54,930 --> 00:06:57,089 Lucy d'Arville: as and when they need it. The challenge with our 115 00:06:57,089 --> 00:07:00,960 Lucy d'Arville: primary care system at the moment is that our bulk 116 00:07:00,960 --> 00:07:04,409 Lucy d'Arville: billing rates are in decline because GPs are not able 117 00:07:04,410 --> 00:07:08,310 Lucy d'Arville: to create a sustainable living off the back of the 118 00:07:08,310 --> 00:07:12,360 Lucy d'Arville: Medicare rebate, which was frozen in 2014 actually. So it's 119 00:07:12,360 --> 00:07:16,320 Lucy d'Arville: not a pandemic issue, it was frozen from 2014 and 120 00:07:16,320 --> 00:07:20,340 Lucy d'Arville: was lifted in 2019, but has not been able to 121 00:07:20,460 --> 00:07:23,460 Lucy d'Arville: keep pace with inflation and the gap that was created 122 00:07:23,460 --> 00:07:28,290 Lucy d'Arville: between 2014 and 2019. So to answer your question in terms 123 00:07:28,290 --> 00:07:31,470 Lucy d'Arville: of, "Well, what does that mean? What's the reform that's needed 124 00:07:31,470 --> 00:07:34,080 Lucy d'Arville: in the primary care space?" What's going to be really 125 00:07:34,080 --> 00:07:38,940 Lucy d'Arville: important is in the near term, there probably is a short- 126 00:07:38,940 --> 00:07:41,550 Lucy d'Arville: term boost that's needed in terms of the primary care 127 00:07:41,550 --> 00:07:45,540 Lucy d'Arville: rebate in order to ensure that GPs are better supported 128 00:07:45,540 --> 00:07:48,450 Lucy d'Arville: and that patients have access to affordable and high- quality 129 00:07:48,450 --> 00:07:51,840 Lucy d'Arville: healthcare. Longer term though, that increase is not going to 130 00:07:51,840 --> 00:07:54,930 Lucy d'Arville: be financially sustainable unless you look at how the whole 131 00:07:54,930 --> 00:07:59,040 Lucy d'Arville: system interacts. And there will have to be winners and 132 00:07:59,040 --> 00:08:02,610 Lucy d'Arville: losers, Sean, in terms of the reform that happens. But 133 00:08:02,610 --> 00:08:05,730 Lucy d'Arville: in my mind, primary care is the absolute backbone of 134 00:08:05,730 --> 00:08:08,340 Lucy d'Arville: our system and that absolutely needs attention now. 135 00:08:09,180 --> 00:08:11,370 Sean Aylmer: What about allied health? And I'm never quite sure what 136 00:08:11,370 --> 00:08:14,820 Sean Aylmer: allied health means, I always struggle to get my head 137 00:08:14,820 --> 00:08:17,400 Sean Aylmer: around what we're talking about. So can you define it 138 00:08:17,400 --> 00:08:19,920 Sean Aylmer: and just tell us how it sits within the system? 139 00:08:20,790 --> 00:08:24,480 Lucy d'Arville: Yes, and so allied health is a really key part 140 00:08:24,930 --> 00:08:29,370 Lucy d'Arville: of our overall system. And allied health includes your services 141 00:08:29,370 --> 00:08:35,849 Lucy d'Arville: such as physiotherapists, dieticians, and it's really those supporting health 142 00:08:35,850 --> 00:08:39,300 Lucy d'Arville: services, I would say, that supplement what you get in 143 00:08:39,300 --> 00:08:43,620 Lucy d'Arville: the primary care space, which is your general practitioners, psychologists, 144 00:08:43,830 --> 00:08:46,290 Lucy d'Arville: and dental, and what happens in the secondary and tertiary 145 00:08:46,290 --> 00:08:50,610 Lucy d'Arville: care, which is your outpatient and inpatient treatment with private 146 00:08:50,790 --> 00:08:54,240 Lucy d'Arville: and public hospitals. And so in the allied health space, 147 00:08:54,240 --> 00:08:57,689 Lucy d'Arville: they have a really important role to play in integrated 148 00:08:57,690 --> 00:09:01,679 Lucy d'Arville: care. And when you think about the future of healthcare, 149 00:09:02,100 --> 00:09:07,470 Lucy d'Arville: there are really three words that matter. It's personalization, it's 150 00:09:07,710 --> 00:09:12,720 Lucy d'Arville: innovation, and it's integration. And what increasingly you need to 151 00:09:12,720 --> 00:09:17,579 Lucy d'Arville: see is allied health professionals being integrated with the work 152 00:09:17,580 --> 00:09:20,460 Lucy d'Arville: that's happening in primary care in order to make sure 153 00:09:20,460 --> 00:09:23,640 Lucy d'Arville: that with the rise of chronic illnesses, we are providing 154 00:09:23,910 --> 00:09:27,210 Lucy d'Arville: the right care that Australians need. And to put that 155 00:09:27,210 --> 00:09:30,540 Lucy d'Arville: in context, our healthcare system at the moment is very 156 00:09:30,540 --> 00:09:35,309 Lucy d'Arville: much geared towards a reactive care and it's very acute 157 00:09:35,309 --> 00:09:37,920 Lucy d'Arville: hospital centric. And we need to shift that to make 158 00:09:37,920 --> 00:09:41,340 Lucy d'Arville: sure that now, that 50% of Australians have at least 159 00:09:41,340 --> 00:09:45,180 Lucy d'Arville: one chronic condition, we need to fundamentally shift the paradigm 160 00:09:45,510 --> 00:09:48,540 Lucy d'Arville: to focus more on primary care and allied health, and 161 00:09:48,540 --> 00:09:49,920 Lucy d'Arville: even community care as well. 162 00:09:51,179 --> 00:09:54,690 Sean Aylmer: How, Lucy? How? Simple question, well, probably not. 163 00:09:54,690 --> 00:09:58,679 Lucy d'Arville: I know, it's the million- dollar question. 164 00:09:58,679 --> 00:09:58,739 Sean Aylmer: Yeah. 165 00:09:58,740 --> 00:10:02,700 Lucy d'Arville: I think what we're seeing is really it needs to 166 00:10:02,700 --> 00:10:06,210 Lucy d'Arville: happen in two parts. I would say that the private 167 00:10:06,210 --> 00:10:10,980 Lucy d'Arville: sector has a really important role to play to start 168 00:10:10,980 --> 00:10:15,420 Lucy d'Arville: to demonstrate the benefits of integration. You can already see 169 00:10:15,780 --> 00:10:18,449 Lucy d'Arville: what Medibank Private are doing, what the likes of the 170 00:10:18,450 --> 00:10:22,260 Lucy d'Arville: other insurers such as BUPA and NIB, they are starting 171 00:10:22,260 --> 00:10:25,229 Lucy d'Arville: to think through, " Well, how can we start to join 172 00:10:25,230 --> 00:10:28,020 Lucy d'Arville: the dots for our members more effectively? And how can 173 00:10:28,020 --> 00:10:32,040 Lucy d'Arville: we start to help the providers, primary care, allied health, 174 00:10:32,040 --> 00:10:34,500 Lucy d'Arville: and secondary and tertiary care, how can we help those 175 00:10:34,500 --> 00:10:37,530 Lucy d'Arville: providers to create a more seamless experience for our members?" 176 00:10:37,530 --> 00:10:39,329 Lucy d'Arville: And so I do think that the private sector has 177 00:10:39,330 --> 00:10:41,160 Lucy d'Arville: an important role to play in terms of some of 178 00:10:41,160 --> 00:10:44,610 Lucy d'Arville: that innovation. And also, the hospitals have quite an important 179 00:10:44,610 --> 00:10:46,500 Lucy d'Arville: role to play of how they are starting to tap 180 00:10:46,500 --> 00:10:50,040 Lucy d'Arville: into the primary care networks. But as I touched on 181 00:10:50,040 --> 00:10:54,270 Lucy d'Arville: earlier, there really is the need for broader system- level 182 00:10:54,270 --> 00:10:57,720 Lucy d'Arville: reform by the federal government. And that starts with really 183 00:10:57,720 --> 00:11:01,530 Lucy d'Arville: thinking about what are the needs of Australians that our 184 00:11:01,530 --> 00:11:05,429 Lucy d'Arville: healthcare system needs to be geared towards? And then making 185 00:11:05,429 --> 00:11:09,150 Lucy d'Arville: sure that we are funding and supporting those new models 186 00:11:09,150 --> 00:11:12,150 Lucy d'Arville: of care effectively. And those new models of care need 187 00:11:12,150 --> 00:11:15,420 Lucy d'Arville: to focus on both prevention as well as also thinking 188 00:11:15,420 --> 00:11:19,439 Lucy d'Arville: about lower cost models, which, as I said earlier, are 189 00:11:19,440 --> 00:11:21,600 Lucy d'Arville: going to result in winners and losers. 190 00:11:22,440 --> 00:11:25,080 Sean Aylmer: And the political will, of course, we need the political 191 00:11:25,080 --> 00:11:27,059 Sean Aylmer: will for this to happen, which is kind of the 192 00:11:27,059 --> 00:11:27,689 Sean Aylmer: sticking point. 193 00:11:28,380 --> 00:11:32,489 Lucy d'Arville: Absolutely. And the challenge for the current government is there's 194 00:11:32,490 --> 00:11:36,179 Lucy d'Arville: a whole range of other challenges that they need to 195 00:11:36,179 --> 00:11:38,880 Lucy d'Arville: face as well. So climate change, you spoke about that 196 00:11:38,880 --> 00:11:41,160 Lucy d'Arville: a few weeks ago in terms of the energy transition, 197 00:11:41,160 --> 00:11:44,730 Lucy d'Arville: there's pressures across all parts of the economy, and so 198 00:11:44,730 --> 00:11:48,059 Lucy d'Arville: it really is a question of balance. I would say 199 00:11:48,059 --> 00:11:51,030 Lucy d'Arville: that when you look at healthcare, we really do need 200 00:11:51,030 --> 00:11:53,340 Lucy d'Arville: to act in the sense of it feels as though 201 00:11:53,700 --> 00:11:58,260 Lucy d'Arville: the pressure's on our workforce and the fiscal challenges that 202 00:11:58,260 --> 00:12:02,520 Lucy d'Arville: are being faced. In five years' time, we will not 203 00:12:02,520 --> 00:12:04,980 Lucy d'Arville: be able to pride ourselves in having a universal healthcare 204 00:12:04,980 --> 00:12:07,380 Lucy d'Arville: system if we haven't tackled the reform question. 205 00:12:08,130 --> 00:12:09,929 Sean Aylmer: Lucy, thank you for talking to Fear and Greed. 206 00:12:10,440 --> 00:12:11,610 Lucy d'Arville: Wonderful. Thank you, Sean. 207 00:12:12,330 --> 00:12:15,210 Sean Aylmer: That was Lucy d'Arville, head of Bain's Australia and New 208 00:12:15,210 --> 00:12:18,330 Sean Aylmer: Zealand Healthcare & Life Sciences practice. This is the Fear and 209 00:12:18,330 --> 00:12:20,699 Sean Aylmer: Greed Daily Interview. Join us every morning for the full 210 00:12:20,700 --> 00:12:23,550 Sean Aylmer: episode of Fear and Greed, Australia's most popular business podcast. 211 00:12:23,820 --> 00:12:25,530 Sean Aylmer: I'm Sean Aylmer, enjoy your day.