Stakeholders scrutinise Productivity Commission’s ‘Quality Care’ report ahead of Economic Reform Roundtable

In the lead-up to the government’s Economic Reform Roundtable, scheduled for 19 to 21 August, the Productivity Commission has released its interim report on Delivering quality care more efficiently. The report has triggered commentary from patient advocacy groups, industry leaders and private hospitals, as stakeholders weigh in on whether the findings address the nation’s healthcare challenges, expose critical gaps, and outline the next steps for government action.

Australia ranks 27 out of the 36 OECD countries that reported their proportion of health spending on prevention. The government’s current investment approaches are fragmented, constrained by siloes, and focused on short-term outcomes rather than the long-term benefits of preventive health. The interim report notes that even a modest 10% reduction in preventable hospitalisations could save the nation $600 million annually.

For the medtech sector, the emphasis on prevention and integrated models of care resonates strongly.

“These reforms are an opportunity to embed medical technologies that support early intervention, save lives, improve quality of life and reduce long-term costs. The report cites MTAA’s submission regarding the barriers to funding that arises from the difficulties of measuring the full economic and social value of prevention,” Ian Burgess, CEO of MTAA told Health Industry Hub.

Anand Vairavan, Managing Director of Roche Diagnostics, welcomed the report’s call for a nationally coordinated approach to collaborative commissioning under the National Health Reform Agreement (NHRA).

“This reflects our feedback and will ensure that innovative models of care, supported by diagnostics and digital health innovations, can help Australians and the healthcare system benefit from advances in technology for a more sustainable future,” he said.

The company also supported a proposed national framework to underpin government investment in prevention, including broader economic assessment methods beyond traditional health technology assessment (HTA) approaches such as QALY.

“This paradigm shift is required to enable preventive health programs to be rolled out in Australia as the current HTA system is too limited to capture the true value of prevention programs,” Vairavan added.

Patient advocacy groups also endorsed the interim report’s focus on prevention. Tanya Hall, CEO of Hearts4heart, told Health Industry Hub, “Too often our health system is fragmented with healthcare professionals not talking to each other. We need transparency of outcomes across states and stronger communication between hospitals to ensure patients receive timely patient-centred care.”

Chris Forbes, CEO of Kidney Health Australia, emphasised the value of early intervention, saying “Given that 1 in 7 Australians are at risk of chronic kidney disease, early detection can slow or stop the progression of the disease. A national framework to support investment in prevention, improving outcomes and slowing the escalating growth in government care expenditure is of benefit to all.”

The Australian Private Hospitals Association (APHA) also backed the interim report’s recommendations, highlighting the role of private hospitals in addressing national health challenges.

“Aligning these reforms under the National Health Reform Agreement with private hospital capabilities will support more sustainable federal and state budgets, and ease government capital expenditure on public facilities and better promote innovation,” said Brett Heffernan, CEO of APHA.

Yet, the report leaves critical blind spots that stakeholders say need urgent attention.

Burgess stressed that while the report focused on new models of care, it did not address the medical technologies and digital health solutions required to “make them work”.

“A value-based procurement approach should be embedded into the new National Health Reform Agreement, now under negotiation,” he added. “It is also important that TGA remain the sole regulator of medical devices, including those containing AI.”

Meanwhile, Heffernan drew attention to structural challenges in the system. He cautioned, “The report does not fully address how to overcome resistance to change, manage fragmented responsibilities, or navigate competing priorities across sectors and jurisdictions. Clarity on funding levels for prevention and collaborative programs is lacking, as are concrete solutions for data sharing barriers related to privacy and jurisdictional issues.

“Additionally, standardising evaluation methods across diverse programs and securing reforms beyond short-term political cycles remain unaddressed.”

Missed opportunities in genomics and precision medicine were highlighted by Roche Diagnostics, noting the risk of patients falling through the cracks due to fragmented funding and service provision between the Commonwealth and the States.

“There is an opportunity to re-think the overarching funding and service provision model, particularly now that Genomics Australia has been established. We believe that the current model sees patients who would benefit from genomic testing and precision medicine fall through the gaps and this should be addressed,” Vairavan commented.

Hearts4heart stressed that while prevention is discussed broadly in the interim report, there is no specific reference to major chronic disease areas like cardiovascular disease despite the high burden of disease and its preventable nature.

“We also need to see stronger commitments to digital health integration, workforce training in patient-centred care, and ensuring equitable access for rural and regional communities,” Hall said.

Crohn’s and Colitis Australia CEO, Leanne Raven, explained the need for measurable standards.

“We stress the importance of ensuring Local Health Networks are measuring activity on those conditions that have high utilisation rates as well as being poorly controlled. For example, although people with IBD are frequent flyers of our hospital system and half of the 180,000 people living with IBD have active disease, there is no agreed clinical standard of care for IBD embedded in our hospitals and the quality of care remains unmeasured,” she said.

Both Crohn’s and Colitis Australia and Medicines Australia noted that the interim report omitted reference to the Health Technology Assessment (HTA) Review.

“Prevention isn’t just good health policy – it’s essential for Australia’s productivity and economic sustainability. We now need HTA processes that match the pace of medical innovation and recognise the true value of keeping Australians healthy,” said Liz de Somer, CEO of Medicines Australia.

Next Steps for Government

Stakeholders are urging decisive, collaborative action from the Federal Government.

“Our expectation is that the government will engage closely with patient organisations – like Hearts4heart – in shaping the implementation of these recommendations, ensure that cardiovascular health is prioritised in prevention strategies, and move quickly to fund and deliver collaborative commissioning models that can make a real and measurable difference for patients,” urged Hall.

Embedding collaborative commissioning and the national prevention framework into both the FY27 Budget measures and the new NHRA is essential, according to the MTAA.

“We would like to see genuine collaboration with industry to ensure the final recommendations are practical, workable and appropriately consider how medtech, particularly digital health solutions, can support prevention initiatives and new models of care,” Burgess emphasised. “A priority for MTAA is that the government focuses on digital health funding and reimbursement, so that the innovative technologies needed to support these new models of care can actually reach patients when they need them.”

Heffernan reflected on ongoing dialogue with state governments over the last six months, saying “Regardless of their political persuasion, the states universally understand and appreciate the contribution private hospitals make to healthcare in their backyards and the pressure that is alleviated in the public hospitals they run. We need the Australian Government to meet us halfway on these reforms.”

Vairavan noted that any reforms will require Commonwealth and State Government agreement and collaboration “which is always a challenge”. He explained, “However, we know from the national response to COVID that in a time of crisis, differences are set aside as different levels of Government strive towards a common goal. If the ink on the NHRA addendum is not yet dry, there is an opportunity to incorporate these recommendations now.”

Prime Minister Anthony Albanese and Treasurer Jim Chalmers will host the three-day Economic Reform Roundtable this week at Parliament House in Canberra.

The Productivity Commission is now accepting submissions to inform the final report of Delivering quality care more efficiently, which will be delivered to the government later in the year.

“Fragmented regulation across the care sector reduces productivity, heightens the risk of harms, limits access to care and creates unnecessary burdens for care providers. Previous reform efforts have faced roadblocks and lost momentum – we need a fresh, concerted approach,” emphasised Commissioner Martin Stokie.

In reimagining healthcare across the entire patient journey, Health Industry Hub^TM is the only one-stop-hub uniting the diversity of the Pharma, MedTech, Diagnostics & Biotech sectors to inspire meaningful change.

The Health Industry Hub^TM content is copyright protected. Access is available under individual user licenses. Please click here to subscribe and visit T&Cs here.