© 2012 Mater Misericordiae Health Services Brisbane Limited. All Rights Reserved.

Software Developer’s Conference

Malcolm ThatcherCIO, Executive Director

Information & Infrastructure Division

Mater Health Services Brisbane

© 2012 Mater Misericordiae Health Services Brisbane Limited. All Rights Reserved.

Key Healthcare Sector Challenges…

© 2012 Mater Misericordiae Health Services Brisbane Limited. All Rights Reserved.

Healthcare has some serious challenges…• Aging Population

– In 2020 Australia’s median age will be almost 40.Today it is 37 and in 1980 it was just 29.

– In 2020 there will be more 65 year olds than 1year olds. There will be as many people aged 60-70 as there will be aged 10-20.

– By 2020 the “population pyramid” will be inverted.

• The Aging population is also impactingon the health workforce

• 80% of healthcare costs consumed inlast 20% of life

• % of GDP spent on healthcare isgrowing

Our ageing population will significantly increase future demand for health care

Note: Population projections based on Series B growth assumptionsSource: ABS 3222.0, Population Projections, Australia, 2004-2101 (2006); ABS 3201.0, Population by Age and Sex, Australian States and Territories (2006); ProductivityCommission, Economic Implications of an Ageing Australia (2005)

By 2036, it is projected thatone quarter of Australians will be over 65

Acute care expenditurerises sharply from 60 onwards

Hospital expenditure per capita by age group: 2002/3Australian population by age bracket: 1976-2036

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

65+

45-64

25-44

<25

Population by age bracket (#)

1976 2006 2036

13252933

2006

24965+252045-64252725-442744<25

20361976

13252933

2006

24965+252045-64252725-442744<25

20361976% population by age bracket

0

1,000

2,000

3,000

4,000

5,000

6,000

0-4

5-9

10-1

415

-19

20-2

425

-29

30-3

435

-39

40-4

445

-49

50-5

455

-59

60-6

465

-69

70-7

475

-79

80-8

485

+

Males Females

Hospital expenditure per capita ($)

One major contributor tohigh cost of treatment inolder years is the use ofexpensive technology

© 2012 Mater Misericordiae Health Services Brisbane Limited. All Rights Reserved.

Key Business Challenges

• Inability to meet demand for services• For public patient care delivery this is

evidenced by:– waiting lists for specialist appointments– ED bypass and insufficient beds

• For private patient care delivery,efficiency of operating theatre process,asset utilisation;

• We also have a reimbursement model(whether public or private) which is stillbased on inputs rather than outputsand hence we will continue to incurwaste.

© 2012 Mater Misericordiae Health Services Brisbane Limited. All Rights Reserved.

IT Delivery in Healthcare• IT investment in healthcare is historically low (typically 1.0-2.0% of revenues)• Fact is most Australian hospitals rely on the paper-based health record for

patient care• Why do we need more investment in Health IT:

– To improve efficiency - some reports suggested as much as 30% of healthcarespending is waste (conservative)

– Booz & Company estimate $7.6B in annual healthcare savings by 2020 frominvestment in eHealth

– To improve the safety and quality of care – one study shows Australia has a16.6% rate of adverse events – most worldwide studies show a 10% adverseevent rate; 3% of hospital admissions caused by medication errors alone =200,000 admissions or $700+m per year

– Even the best hospitals in the US fail to deliver what we know to be the mostappropriate care 40-50% of the time!

– Recent data published in The New England Journal of Medicine showed thatbased on a study of 10 North Carolina hospitals there has been no improvementin patient safety since the 1999 IOM Report “To Err is Human”

– Proliferation of new knowledge

© 2012 Mater Misericordiae Health Services Brisbane Limited. All Rights Reserved.

Key Challenges for CIOs

• The Key Challenge for healthcareCIOs is not about the delivery of newtechnology (e.g. cloud computing)…

• how to deliver new value from existing investments and thensupplement that investment to deliver even greater value;

• how to drive innovation through the use of technology, not thetechnology itself;

• how to achieve social transformation in healthcare; To do thiswe have to focus more on why people do things rather thanwhat people do;

© 2012 Mater Misericordiae Health Services Brisbane Limited. All Rights Reserved.

So what can you do…

• Acute healthcare needs long-termpartnerships in order to deliver enduringvalue

• So, you need to differentiate based onyour value proposition

• Value in healthcare has to be associatedwith innovation

• When selling a partnership, be prepared todefine what that means