National Electronic Health reforms, Aussie style.

For 14 months, Australia has had an electronic national health register. It has almost nothing in it, but the hope is that in years to come (when lots of people have registered) it will start to have all the information on someone’s health that floats around in the health industry. This includes discharge summaries, the history of medicine use, databases on allergies and conditions, payment histories, dental records, childhood illnesses, vaccination history, and treatment plans.

This health register was initially championed by Tony Abbott when his party was last in power and he was the health minister, so now that he is the Prime Minister, its future looks safe for the next few years at least. Let me, as an interested but only average-informed health watcher, talk through the possibilities of this health register, the failures to have health registers in many countries, and the wondrous ways in which the Australian variety seems to have benefited and thrived from a lack of foresight, a lack of consultation, a lack of expertise, and a lack of money. It is somewhat unusual and incredible from the point of view of normal economic thinking about reform, but we seem to have a policy area here in which it seems an advantage to bumble along in the dark, rather than be well-prepared beforehand.

But let us start with what we ultimately might want out of such a register.

The long-term usefulness of a national registry is enormous. Instead of each hospital ward and each GP having their own separate 20 datasets each on patients, staff, and payments, you would have just one. Doctors and nurses would type their diagnoses and delivered treatment onto an iPad, send it to the database and the whole rigmarole of insurance, subsidies, and passing on information happens automatically. With national-wide access, health professionals everywhere would know all they need to know about each patient without having to attempt to contact the 50 other places that person has been in so far. Even within hospitals and nursing homes there would no longer be a need for staff to meet and compare notes on patients and residents. Patients wouldn’t have to constantly fill out huge forms, nor worry that the allergy they forgot to mention this time leads to them being prescribed the wrong medicine. Essentially this means fewer mistakes and fewer forms.

Down the road, an electronic health register would become the logical vehicle for all monetary transactions in the health system. GPs and hospitals would be paid according to continuously updated health plans devised by diagnosticians including GPs and Artificial Intelligence diagnostic tools; inventory and usage would be deduced from this register; salary and accreditation of health workers would go via it; taxes and subsidies would flow within it. Effectively, a national electronic register could be the roadmap and marketplace used by all health professionals for all interactions with patients and others in health land.

This utopia is however far away. Many countries have tried to set up national registers and so far have little to show for it. Apart from a few small countries like Estonia that has a national system set up to record medical histories from birth to grave. This is partially due to the sheer complexity of information in the Health system: every tom-dick-and-harry has got his own software, IT specialists, specific needs, conventions, and incentives. As mentioned, your average GP has not one but twenty information systems ranging from an inventory of needles, to the salaries of the people working for her, to records of patients’ visits. There are thousands of pages of information on your average patient meaning that it is not only a hell of a job getting it into an electronic format, but you then have to find ways to condense it to be useful for anyone. There are pure technical difficulties, as well as the drama of matching records that use different naming conventions. Not all records are electronic either, a big issue in the UK National Health service where handwriting is a treasured art form.

Yet, the few small countries that have a system have indeed gone towards the utopia I described. What starts out as voluntary becomes compulsory, exemplified by Finland that now mandates all health professionals to use the system. What starts with information dispersal ends up being used for money, exemplified by Estonia that now uses its health records for medical invoicing.

Bigger countries that poured money into this have seen their efforts thwarted. In the US, the system is a mess tied up in red tape. In the UK, they abandoned their efforts of a national register, just as they have in the Netherlands. New Zealand also gave up. Canada and Sweden have regional initiatives but no national system. The only countries that have something approaching a national electronic register are Denmark, Estonia, and Finland. These countries were able to use their existing population registers and national health systems as the starting base, and managed to steamroll all privacy and vested interest issues up front by giving clear parliamentary approval. These are great examples that Australia unfortunately cannot follow.

The main reason why no Anglo-Saxon country has come close to a proper national health register is the politics of change. Everyone and his dog want their complaints met beforehand. Some complaints are valid, some self-serving. What about privacy? Who will check the accreditation? Why would early adopters bother to send data to something that is only useful to them if everyone else sends data too? Who is going to go through old dental records and how should they be standardised? How are you going to compensate hospitals for the expense of adopting the new system? How would you transition from the existing systems? What about private health care providers? How can you actually tell who is who when you lack a national identification register that covers the whole population to begin with?

These problems are so formidable that they have baffled the best efforts of countries for decades. The Netherlands for instance had a dedicated organisation work on this for 30 years, only to eventually fold without much to show. The UK poured billions of dollars into this and tried to engineer a system from first principles, eventually giving up (though they might try again). Every time these countries came up with plans there would be something that wasn’t to the satisfaction of some interest group who politically blocked it.

Why would Australia succeed when other, much bigger and more heavily resourced countries have failed before?

I have watched the Australian effort, concentrated in the National E-health Transition Authority (NEHTA) from the sidelines and have been amazed at the difference in the Australian approach to the European or American approach. It is a quintessentially Australian approach to change that might just work.

The key strengths of the NEHTA initiative are a lack of foresight, a lack of consultation, a lack of expertise, and a lack of money. Each of these is an enormous blessing in disguise when it comes to the problem at hand. Let me explain, for it is truly quite wondrous that these things should be strengths.

A lack of foresight in this area means that you don’t try to deal with all the problems that might arise. You essentially just do your best to guess the major blocks and then you improvise as the problems hit you. And the problems are stupendous, ranging from incompatible programming code to dysfunctional organisations who don’t want to play ball, emerging privacy issues, game-playing private contractors, opportunistic politicians, and high staff turnover.

The ‘let’s just forge ahead and adapt as we go along’ strategy is in essence a much smarter strategy than trying to work it all out beforehand, simply because it can’t be done. It’s too hard to anticipate the millions of different scenarios that could happen to derail original plans. Indeed, the outcome we have now hardly resembles the unrealistic plans of just 3 years ago. Strange as it may seem, but a lack of foresight is proving a blessing when it comes to setting up this sort of system, for it means we have not set up internal systems (and groups protecting them!) that prove to be unworkable and that would pertain to an imagined outcome that never arose.

All NEHTA has ended up with sofar is a bare-bones framework and a vague idea of where we might end up. Its strength is the agility of experimentation versus the rigidity of planning. And one of the funny things is that NEHTA of course has continuously pretended to have planned everything that is happening whereas it in fact has just been stumbling along from one unexpected problem to the other, adapting, cutting, and axing its supposed grand plan as it went along.

A lack of consultation is proving similarly crucial in this initiative. True consultation with lobby groups would mean every stake-holder would be warned about what they actually stand to lose down the line when the register gathers pace. After all, a system that is used for the flow of money, will undoubtedly also lead to changes in the way that money flows. A fully functional register would tell a health ministry which hospital and which health specialist is doing unusually poorly or is curiously expensive. The register would thus be the natural vehicle for organising competition between institutions and professions. Imagine having to negotiate with those professions and health providers that secretly know they are inefficient, on a system that will eventually expose this and cut out their slice of the pie!

The great thing about a lack of consultation is thus that you let sleeping dogs lie. There are still plenty of dogs barking, but not half as many and not half as vicious as they would be if they fully realised what is at stake. This is for instance the main mistake that was made in the Netherlands – consultation killed the process because too many stake-holders were alerted to what they might lose so they developed and voiced one objection and political road block after another.

A lack of expertise is also proving a major blessing in disguise for this initiative. By lack of expertise I mean that the builders of the national register had almost no clue of the difficulties faced on the ground by health professionals and patients. They were a bit naive. As a result, when major fundamental problems were discovered weeks before major elements of the national register were supposed to go online, quick pragmatic solutions were put in place with almost zero consultation that should greatly increase the eventual usefulness of this thing. Consider as an example of this, the initial inability to foresee that you have to bribe individuals uploading the information in order to get them to do it. Its basic economics that you have to do this, but a lack of expertise prevented them from seeing beforehand how important incentives really are. They were instead actually counting on the benevolence of the health professionals to complete all the uploading work. Due to a lack of expertise and realism, this major design element was overlooked, and had to quickly be worked out when spotted. This then lead to a payment for doctors and other health professionals to upload information to the system. This in turn, via the backdoor, established the principle of payments via this electronic register on the basis of system usage. It is a principle that would involve years of political wrangling if you had to discuss it beforehand, because it is so obvious where it would lead once in place. Hence, a lack of expertise has effectively allowed a crucial and politically sensitive mechanism to be smuggled in at the last minute with no organised opposition!

For a completely different reason has a lack of money proven a blessing in disguise. Fully establishing and implementing a national electronic system would cost tens of billions of dollars to do properly. Instead, Australia is doing it on the cheap, pouring no more than half a billion per year into this.

Imagine if tens of billions of dollars were available on the table for this. The vultures would be circling. If health providers knew that kind of money was on the table, the negotiations about implementation and bribes would be endless. Private contractors would game everything to the max. Different ministries would be claiming ownership over part of the enterprise in order to tap into the money pot. The shoestring budget this endeavour is on has thus protected it from big players and allowed it to slip under the radar and get going.

So we now have an embryonic national register with minimal bells and whistles that is of limited use at the moment, but that has great potential. Should it now attract more funds, more expertise, more consultation, and develop greater foresight in order to realise its potential? I sincerely hope not for it would be the surest way to kill it off! In order for it to grow and gather applications, it needs to first quietly experiment, make mistakes, find the most useful and docile users first, and slip in the major elements that will make it useful down the track. It is way too early to be investing big money into it.

Only once it has been established for a decade or so, with a secure operator, full functionality, and all the important usages in place, would this be safe from political obstruction. Would we eventually need a big push for a national electronic health register? Perhaps we will if the system was used as the main conduit of money in the Health System. Though maybe that can be slipped in quietly too.

Hence it is a case of so far so good with the National electronic health system in Australia. It remains a wonderful example of the genius of Australian institutional innovation at work. With less resources, less planning, less consultation and less expertise than other countries (like the US and the UK) we seem to get more results than others. Who would have thought?

Author: paulfrijters

Professor of Wellbeing and Economics at the London School of Economics, Centre for Economic Performance

4 thoughts on “National Electronic Health reforms, Aussie style.”

  1. The ‘let’s just forge ahead and adapt as we go along’ strategy is in essence a much smarter strategy than trying to work it all out beforehand, simply because it can’t be done. It’s too hard to anticipate the millions of different scenarios that could happen to derail original plans. Indeed, the outcome we have now hardly resembles the unrealistic plans of just 3 years ago.

    This has been long recognised in Startup culture – it’s known as the “Minimum Viable Product” strategy.


  2. Brilliant, Paul, but you’ve left out one outstanding element that puts all the others (that you’ve lined up so eloquently) in the shade. The ordinary voter has Zero interest in this project. To prove the point, next time you are in a room full of peers, ask them who keeps their own up-to-date, coherent record of all their transactions with the health ‘industry’.
    You could, equally, ask the Controller of the NEHR – the Head of the Department – how many citizens have been quizzing Medicare for their records of billed MBS items, but not hold your breath waiting for an answer.
    It was cheeky of you to ask “How can you actually tell who is who when you lack a national identification register that covers the whole population to begin with?”, the obvious place to start on an NEHR. All that would have taken was six or seven Ministries actually talking to each other with common purpose – how difficult is that? Now, if I am incinerated in a freeway pile-up, how long will it take to confirm my identity? Never mind me, though, I’ll wager the children of the mega-rich have had their DNA profiles stashed away in case of an unfortunate event that threatens the estate and dynasty. We’ve let all of our newborns have their heels pricked for tests, no questions asked, so wouldn’t you think it would be a simple next step to a State-owned DNA register? Oh, yes, I forgot that would be “Orwellian”.
    We would be entitled to believe, according to the evidence you have presented in addition to the tales of woe coming out of the US about the registration website for Obamacare, that the whole NEHR is under a pall of doom. But, see, you have painted a little smiley face peeking out from the chaos.


  3. Tongue in cheek Paul? The fact is that NEHTA has been a f#%ck up of gigantic proportions. The entire system is flaky, despite the millions spent.


  4. The casual contempt for democratic deliberation (“political obstruction”, as the author would have it) borders on the farcical. For sure, political decision making often leaves a lot to be desired, but gloating over a “crucial and politically sensitive mechanism […] smuggled in at the last minute” seems even less attractive. Sadly, this seems to be pretty much in line with current economic orthodoxy.


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