Value-based health care in Australia: Promoting better outcomes in primary health

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There are numerous value-based health care (VBHC) initiatives being delivered in Australia — but they are often focused on acute care settings, and investment in knowledge-sharing across the sector continues to be slow. This lack of coordination could be hindering progress towards better healthcare outcomes and experiences for patients. But there are success stories that should be shared, such as the Choices Post-Discharge Program funded by the WA Primary Health Alliance (WAPHA), which saw a 35% reduction in emergency department presentations and an 18% reduction in offences. Such examples show the potential for VBHC to transform the healthcare landscape in Australia.

As chronic disease and multi-morbidity continue to be a major healthcare challenge in Australia, accounting for a significant proportion of the healthcare burden and costs, VBHC approaches are gaining traction in the primary care setting, as a way to improve patient outcomes and experiences while reducing costs[1]. At its core, VBHC is a healthcare model that focuses on delivering high-quality care that is tailored to the needs of patients and communities. This means shifting the focus from volume to value of the services provided.

The Australian government has initiated a range of initiatives to promote VBHC, including the National Strategic Framework for Chronic Conditions, released in 2019. The framework outlines a strategic approach to the prevention and management of chronic disease in Australia and emphasises the importance of VBHC approaches. These include but are not limited to the use of person-centred care models, multidisciplinary care teams, and data-driven decision making. More recently, the Allied Health Framework for Value-based Health Care (2022) was developed in close collaboration with the allied health community and consumers of Queensland. It provides a structured approach to working with consumers and communities to shift the focus of care delivery towards achieving outcomes that are meaningful to them.

At Larter, we have been actively considering and supporting the implementation of VBHC within the Australian health sector, sharing insights with industry leaders and collaborating with commissioning bodies to facilitate a change in healthcare services towards a value-based model. We share some examples of ways that VBHC is currently being implemented in primary healthcare in Australia.

1. Outcomes-based funding / value-based procurement

Many Australian commissioners and funders are moving towards outcomes-based funding for primary healthcare providers, where funding is linked to the quality of care and patient outcomes rather than the number of service sessions provided. Western Victoria PHN’s mental health services program exemplifies this approach, paying providers based on specified outcomes (e.g., enhanced mental health functioning and fewer hospitalisations), linking incentives with improved outcomes and reduced costs.

Value-based procurement requires leveraging both technology and data analytics, which commissioners are increasingly deploying. For example, patient outcomes and experience data can be used to track provider performance and outcomes, and to inform contracting decisions. By incentivising healthcare providers to prioritise outcomes, value-based procurement and contracting can help improve service delivery and lead to more efficient use of healthcare resources.

2. Person-centred care

VBHC places the patient, carer, and support people at the centre of care. This includes involving patients and their care team in the decision-making process, providing education and support to help patients self-manage their conditions, and tailoring care to meet the individual needs of each patient. The Flinders Medical Centre (FMC) in South Australia has implemented a patient-centred care program for patients with chronic conditions. This program involves developing a personalised care plan in collaboration with the patient and their family. The care plan is based on the patient’s goals and preferences and is designed to improve their health outcomes while promoting their independence and quality of life.

Another great initiative is a virtual model of care that has been adopted in Tasmania to enhance person-centred care and access to treatment. Tasmania is at the forefront of digital health innovation, particularly in cardiac rehabilitation. In partnership with digital healthcare provider Cardihab, the Royal Flying Doctor Service Tasmania, and the Tasmanian Department of Health, patients are offered an intervention that is customised to meet individual needs through a menu-based system. This empowers patients to choose how they complete their rehabilitation, which is known to increase engagement and completion rates. In addition to improving patient outcomes, this innovative model of care has the potential to support more cardiac rehabilitation patients in Tasmania while generating cost savings.

3. Data-driven decision-making

VBHC relies on data to measure and improve patient outcomes. Primary healthcare providers in Australia are increasingly using data to monitor and track patient outcomes, identify areas where improvements can be made, and measure the impact of interventions. NSW is leading the way in value-based healthcare through initiatives such as the Leading Better Value Care (LBVC) program. This program was launched by the NSW Ministry of Health in 2012 and has been implemented across a range of healthcare services, including mental health, cancer care, and chronic disease management. Data from multiple sources have been gathered and analysed, including patient records, hospital data, and clinical guidelines, ensuring that resources were allocated effectively to achieve the greatest impact. By adopting a multidisciplinary care approach, as well as offering patient education and support, the LBVC program has led to a reduction in the number of avoidable hospital admissions for patients with chronic obstructive pulmonary disease. The success of the LBVC program has prompted other states and territories to adopt similar approaches to VBHC.

4. Multidisciplinary care teams, working to the top of practice scope

VBHC recognises that delivering high-quality care requires a team-based approach. Primary healthcare providers in Australia are implementing multidisciplinary care teams that include doctors, nurses, allied health professionals, and other healthcare workers. The Hunter New England and Central Coast PHN in New South Wales has implemented a multidisciplinary care team approach for patients with chronic conditions. Healthcare providers from different disciplines work together to develop a comprehensive care plan for the patient. By working together, the team can ensure that the patient’s care is timely, coordinated, comprehensive, and person-centred.

5. Integration of care

VBHC involves integrating care across different healthcare settings and providers. Primary healthcare providers in Australia are working to improve the coordination of care between general practitioners, hospitals, community health services, and other healthcare providers. Integrated healthcare can facilitate appropriate data sharing, which in turn can improve the patient experience by reducing the need for patients to repeat their medical history to multiple providers. This has the potential to result in better health outcomes, increased patient satisfaction, and improved patient safety, as providers have access to a patient’s complete medical history and can make more informed decisions about their care.

At Larter, we continue to think through the challenges of adopting VBHC delivery in Australian primary health settings. We have recently been working with commissioing bodies to codesign community-led integrated healthcare models and to develop commissioning strategies which optimise value-based approaches. We are committed to continuing this work and partnering with others to drive the adoption of VBHC approaches, because we believe that everyone deserves access to high-quality, person-centered care that delivers outcomes which matter to them.

Contact us if you want to explore opportunities to deliver VBHC in your setting.

For more reading on innovations in VBHC, see the Australian Centre for Value-Based Health Care.

[1] The Australian Centre for Value-Based Health Care uses the World Economic Forum definition of value: The health outcomes that matter to patients relative to the resources or costs required