Four Corners – Wasted
This week’s Video Insight coincides with a comprehensive story by the ABC’s Four Corners on the opportunities for effective cost management in Australia’s Health Care System.
In the video I implore investors to have an intimate understanding of the value provided by health care companies before investing in a sector which may appear to have strong growth prospects. Health care funders are under increasing pressure to contain claims inflation, so unless companies are helping to take significant costs out of the system, or are providing a product or service that warrants a premium price, it’s increasingly likely that the funders will identify and contain areas of excess.
The Four Corners story identifies numerous areas where the cost of procedures exceeds their proven effectiveness. In Australia’s fee-for-service system, there is no disincentive to limit expenditure, so health care professionals are encouraged to explore numerous, but at times unnecessary, tests and operations.
Reforms will be a slow process but Private Health Insurers are likely to benefit over the long term (this is a theme we’ve discussed extensively with our investment in Medibank Private – see here and here).
Four Corners concludes with, “Tonight’s story is not saying, “Don’t have those tests and procedures.” What it is saying is: “Ask your doctor the right questions before you proceed, like: ‘What is the evidence that they’re going to help me?'”. Some very practical advice indeed, and not just for consumers.
Ben MacNevin is an Analyst with Montgomery Investment Management. To invest with Montgomery domestically and globally, find out more.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
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Lissica
:
Depends on the patient population. It’s not easy to convince some people they don’t need their cholesterol checked every three months, or tick every other box on the lab form.
Greg Salway
:
It’s not practical for some people, especially in rural areas, but why wouldn’t you get a few quotes and thoroughly research your choice of health care professional(s)? It’s very similar criteria that one would use to pick a fund manager i.e. Deeply trustworthy, ethical, transparent,Long term goals in alignment etc…Remembering its your decision, it’s your body & you must ask plenty of questions and be comfortable. In my experience, people rarely truly understand the consequences of a negative health outcome…
Jessica Peade
:
This report really hit home. I’m just 27. In the public system, I initially had 1 CT scan and a subsequent steroid injection from a notorious Dr for injecting in the wrong place in the hope for subsequent treatments. Following this an MRI Leading to surgery, which was repeated by a senior surgeon just 6 weeks later. Then diagnosed “failed back surgery,” placed in a chronic pain management clinic and a disability allowance by the government. I hate to think what costs this had and such a disappointing, life changing outcome for myself. You place your trust in the professionals but had I been given some GP advice such as “no bed rest” initially (as I spent 6 weeks not moving) things could be very different.
Gerard
:
One of the problems is the risk of the Doctor being sued for not requesting this or that test,if the is an error in diagnosis or treatment.
Another problem is individual fees charged by some doctors….some are very greedy,so like with most procedures,patients should get a quote!!!