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Australians are living longer, largely due to health services that identify and treat illnessesmore effectively. But an ageing population and increasingly prevalent risk factors such asobesity lead to many people spending long years living with chronic health conditions,including diabetes, arthritis and cardiovascular disease. These chronic conditions adverselyaffect the health, wellbeing and income of nearly four in ten Australians. For some, theeffects are debilitating.For the health system, the increasing prevalence of chronic conditions comes at a substantialcost. About 38 billion is spent annually in the health system to provide care to people withchronic conditions (figure 1). Costs are higher when considering the income lost due to lowerproductivity, reductions in tax revenues and increases in welfare payments.Prevention can reduce the human and financial costs imposed by chronic conditions; thereduction in smoking rates and the associated burden of disease is one example of success.Nonetheless, there is still significant scope to mitigate the effects of chronic conditions onpeople’s lives and improve the management of such conditions following a diagnosis. Thiswould promote wellbeing and produce economic benefits.Governments have long sought to change the focus of the health system, towards preventionof ill-health and integrated person-centred care. System-wide reforms have enabledimprovements in health services. For example, the introduction of activity-based fundingand the creation of primary health networks (PHNs) have improved efficiency andcollaboration. But there is also significant successful innovation on a smaller scale,developed and implemented at a local level. These local innovations offer important,practical insights into ways to improve outcomes for people with chronic conditions.The Council on Federal Financial Relations tasked the Productivity Commission withfinding examples of successful innovations, and examining how these work. Beyond theirpositive effects on people with chronic conditions, such innovations provide importantinsights for the health system. The system has substantial limitations, including its focus onthe needs of providers rather than consumers, limited collaboration, fractured fundingarrangements, poor data practices, and barriers to the use of the full capabilities of its diverseworkforce. Understanding how innovative interventions have overcome some of thesesystem inadequacies offers valuable and practical lessons for broader reform.To gain the full benefits of these innovations, the lessons they offer need to be diffused to abroad audience. However, diffusion of knowledge about the practical ways to implementinnovation in healthcare is often slow, and policy makers are sometimes unaware of relevantexperience in other settings of care or other parts of Australia. This report seeks to contributeto the process of knowledge diffusion.2INNOVATIONS IN CARE FOR CHRONIC HEALTH CONDITIONS

Figure 1Chronic conditions are common and costlyMany Australians, especially older people,live with chronic conditions9038% of Australians 9.2 million people haveat least one physicalchronic conditionPrevalence rate (%)80706050403020100Under 1515–4445–64Age65 Chronic conditions are expensive forthe health system, especially hospitalsPrivatehospitals22%The health systemspends 38.2 billioneach year to care forpeople with chronicconditionsPharmaceuticalBenefitsScheme17% GPs8%Public hospitals39%Allied health4%SpecialistsOther4%6%Share of health system spendingon chronic conditionsOVERVIEW3

Successful innovations come in all shapes and sizesIn this report, the Commission has taken a different approach to past reviews that maderecommendations for health reform. Rather than revisiting already well-known problemsand designing a path to change, we started by looking at a diverse range of practical, albeitoften small scale or relatively unknown, innovations already underway. We examined thosethat have delivered (or are on track to deliver) sustainable outcomes to understand howwell-known barriers to change can be overcome, and what this means for the health system’spotential and its limitations.To identify examples of innovation, the Commission spoke with people across the healthsector, including consumer and advocacy groups, government departments, hospitals andlocal hospital networks, PHNs, service providers, individual practitioners and academicsfrom a range of disciplines. The people we spoke with told us about positive examples ofinnovation, the challenges they encountered and the ways they are working to overcomethem. We focused on initiatives that seek to tackle physical chronic conditions, as preventionand management of mental ill-health were examined in detail in the Commission’s MentalHealth inquiry.We often heard how innovation was frustrated by funding arrangements. Initiativescompeting for limited budgets can struggle to demonstrate their value, as results take timeto be realised and outcomes can be difficult to quantify. In some cases, effective innovationsnever make it past their trial phase or are discontinued due to funding shortages or a changein management priorities. Health funding mechanisms do little to support innovation, andprocess improvement tends to occur despite systemic funding policies, rather than beingassisted by them. While some services have managed to use existing funding arrangementsto introduce new and improved practices, innovating in this way is not straightforward. Trialsof innovative funding mechanisms are underway and may pave the way to further reform.Innovation was often achieved because dedicated individuals were committed to pursuing itand were supported by local health service executives. Successful innovation involvedchanges to ‘business as usual’ practices in the health sector. Often, this meant overcomingentrenched organisational cultures, and, in some situations, rigid administrative limits on therole of clinicians.Change also takes time and information. Innovations examined in this report have frequentlytaken years to develop their service models and the relationships that sustain them.Continuous review is a common feature of success. Innovative programs sought to improvetheir performance by evaluating their processes, collecting and analysing data and changingcourse when they did not reach their goals.Not all the innovations examined in this report required funding reform — in many cases,only modest investment was necessary and what mattered more was adopting a different wayof working. We did not try to ‘pick winners’ between these innovations; each one has4INNOVATIONS IN CARE FOR CHRONIC HEALTH CONDITIONS

strengths and weaknesses. Nonetheless, there are features that distinguish successfulinnovations from other interventions. They include: considering people’s needs and preferences, and offering comprehensive support empowering health workers to make full use of their skills in delivering care building sustainable collaborative relationships between people as well as organisations improving the flow of information between different parts of the health system making the most of existing funding structures and embracing innovative approaches tofunding.Supporting people to manage their healthWhen people play an active role in their health care — through informed self-managementin partnership with medical professionals — this often leads to improved wellbeing andreduced hospitalisations. In practice, this involves people monitoring their symptoms, takingmedications as prescribed, following lifestyle advice to the best of their ability and knowingwhere and when to seek professional assistance.Achieving and maintaining self-management is not easy. Clinicians face time pressures andfinancial incentives that limit their ability to inform and work with consumers. And abouthalf of the people who have chronic conditions find it difficult to adhere to long-termtreatment plans.Effective self-management depends on many factors, including people’s understanding ofthe actions required to manage their condition, their ability and confidence to undertake theseactions, and their social and clinical supports. Policy frameworks promote self-managementthrough consumer information and by building clinicians’ skills to communicate withconsumers. However, these broad-brush measures do not adequately address the needs ofthe people who require proactive assistance.Supporting consumer self-management can start with small, cost-effective steps, which canassist many people with chronic conditions. While such innovations exist, they currently reachonly a small proportion of the population. For those with more complex needs, a range of otherinterventions — from health coaching to programs that deliver care tailored to the needs ofremote communities — can be effective in helping people to manage their health (box 1).Successful innovations to enhance self-management enable bespoke health care, whichconsiders people’s circumstances and preferences, and delivers advice and support in formatsthat are accessible and relevant to the consumer. Their innovative use of technology andworkforce skills means that the investment required is often small compared to otherinterventions. In addition to achieving better health outcomes, such investments may reduceexpensive hospital admissions. While scaling up these initiatives and replicating them in otherlocations would require additional upfront funding, evaluation of these programs has shown thatthey lead to better health outcomes and are likely to increase the efficiency of health services.OVERVIEW5

Box 1Case studies — innovations helping people to manage theirchronic conditionsNellie — a system that sends friendly text messages to participants, reminding them to take theirmedication or monitor their health and check in with their GP. The system tailors the messagesaround a specific goal, agreed between the person and their GP, collects responses and sendsthe relevant information back to the GP for review. Evaluation in the United Kingdom showed thatthis system can improve health outcomes for people with chronic conditions such as diabetes, aswell as improving the efficiency of primary health services.Turning Pain into Gain — a program to help people living with chronic pain, delivered via groupsessions, one-on-one clinical service assessments and allied health services. Parts of theprogram are supported by volunteers who completed the program in the past. Evaluation of theprogram found that it improved participants’ ability to undertake various day-to-day activities,including exercise, household chores and leisure activities, and reduced hospitalisations by 78%.Monash Watch — a program that employs ‘care guides’ who phone participants regularly, tomonitor their health and wellbeing and encourage them to make healthier choices in their dailylife. Using a decision support system, the care guides refer people to nurses and other healthprofessionals when they need additional help. Interim evaluation results show that Monash Watchis achieving a 20–25% reduction in hospital acute emergency bed days compared to usual care,well in excess of the 10% reduction it set out to achieve.One Stop Liver Shop — a mobile care delivery model for people with chronic hepatitis B (CHB)that brings visiting clinicians and specialised equipment to a remote community in the NorthernTerritory. It provides all the care needed by people with CHB, where they live, and in theirlanguage. The model combines these visiting services with a purpose-made mobile applicationdesigned to provide CHB education in both English and Yolŋu Matha. Services are coordinatedby community-based educators. The service enables people to access care that would otherwisenot be available to them and avoid hospital visits.FINDING 1 — THE HEALTH SYSTEM CAN IMPROVE THE WAY IT SUPPORTS PEOPLE TO MANAGETHEIR CHRONIC CONDITIONSHealth services do not always do enough to support people to manage their own chronicconditions. Innovative interventions show that supporting people with chronic conditionsto be more active in their health care can be a low-cost way to improve health outcomesand prevent hospitalisations.6INNOVATIONS IN CARE FOR CHRONIC HEALTH CONDITIONS

Empowering the health workforce to deliver better careIn many health services, funding constraints, workforce norms and administrativerestrictions preclude the efficient matching of roles and skill sets. This means, for example,that nurses carry out routine care tasks while their time might be better spent delivering morecomplex care, and allied health practitioners undertake tasks that could be done by assistants.People often face long waiting times to see a specialist, even though a clinician with adifferent skill set, such as a general practitioner (GP), could help them much faster andachieve comparable outcomes.Successful innovations consider the skills and training required to fulfil a role and find theworkers who are best suited for the role (box 2). Some programs are redefining the role ofclinicians, empowering GPs to deliver care in the community to people who would otherwisebe admitted to hospital. In other cases, innovative GP practices have built teams of healthprofessionals and other staff to enable more delegation of tasks and more efficient care.Some of these practices have adopted the patient-centred medical home model, deliveringcoordinated care tailored to people’s needs. This transformation has often led to a reductionin practice revenues, as current funding models are not designed to support this investment.There are also programs that have recognised that some aspects of health care can bedelivered safely and effectively by workers with different skills and experience. Forexample, peer workers are an important part of the mental health workforce, and theircontribution is expanding in services for people with physical chronic conditions.Greater health workforce flexibility can raise service quality and lower system-wide costs.For example, Tasmania’s Community Rapid Response Service provides home-based carefor people at risk of a hospital visit and supports GPs to manage conditions that wouldnormally lead to a hospital admission. Over 10 months, the program cost about 840 000,while conventional care would have cost 2.2 million. These figures are based on a smalltrial — if such an approach were successfully implemented in other jurisdictions, costsavings would be significant.Increasing workforce flexibility requires leadership and time to address enduringorganisational cultures and to provide support to staff performing new roles. We heard ofcases where potentially effective changes to clinical roles were abandoned due to lack ofstaff engagement.OVERVIEW7

Box 2Case studies — health professionals making the most of their skillsGeneral Practice Pharmacist program — Pharmacists work in general practice care teams inwestern Sydney to deliver clinical and education services. Their responsibilities includeperforming medication reviews and providing medication advice to consumers, GPs and otherpractice staff. The regular presence of pharmacists in general practices improved outcomes byreducing adverse drug events and instances where a person takes five or more medications daily.A separate study estimated that employing pharmacists in GP clinics could generate potentialsavings of 1.56 for every dollar spent, as people have fewer adverse reactions to medications.GPs with special interest — In parts of Queensland, hospitals have dedicated roles for GPswith special interest, who work with specialists to perform clinical assessments and coordinateongoing management of care. Consumers benefit, as they do not need to wait for long periods tosee a specialist and their health outcomes are on par with those of people who only see thespecialist. The GP benefits from higher job satisfaction, gaining additional skills and working in aspecialised area. And there are potential efficiency gains for the health system, as specialists areable to help people with more complex health needs.Choices — This Perth program provides vulnerable people at risk of poor health outcomes withpeer support and case management for about three months after a visit to the emergencydepartment (ED). The program focuses on finding stable accommodation for people experiencinghomelessness and assisting them with managing their chronic conditions. Peer workers offeremotional support and help people to navigate health and social services. Clients of Choices hadfewer ED presentations and hospital inpatient days after engaging with the program, translatinginto a decline in hospital costs of 1.1 million. They also had fewer interactions with the justicesystem: there was an 18% decrease in the number of clients committing offences, and a 60%decrease in the number of clients brought to the ED by police.FINDING 2 — EMPOWERING THE HEALTH WORKFORCE TO DELIVER BETTER CARE HASBENEFITS FOR CONSUMERS AND THE HEALTH SYSTEMEntrenched workforce practices and administrative restrictions curtail the ability of healthprofessionals to use and develop their skills, and limit the role played by trainedadministrative staff and peer workers. As a result, consumers are not offered the supportthey need or have to wait longer than necessary to access care.Innovative approaches consider the mix of skills most suitable to delivering care andcreate new roles, responsibilities and workflows that deliver effective and efficient care.Building and sustaining collaborationCollaboration often improves service quality and the adaptability of the health system. Thiswas evident in Melbourne’s north west during the peak of the COVID-19 pandemic in 2020.Care pathways for people with COVID-19 were established quickly by using pre-existingcollaborative arrangements between the Royal Melbourne Hospital, the local PHN and twocommunity health services. Similar processes were put in place in Western Sydney, basedon the existing collaboration between the PHN, local health district and GP practices (box 3).8INNOVATIONS IN CARE FOR CHRONIC HEALTH CONDITIONS

However, collaboration is not just useful in times of crisis. It can help people access anappropriate level of care when and where they need it.Successful collaboration is often driven by individual ‘champions’ who use their personalnetworks to connect with other people in relevant organisations. This means thatcollaborative efforts are vulnerable when key participants change jobs or funding runs out.One health service manager noted that collaboration is often ‘first on the chopping block’ intimes of change. To overcome this, successful innovations worked to embed collaborationas a routine feature of health services (box 3).Box 3Case studies — collaboration takes many formsCOVID-19 clinics in Western Sydney — a long-standing partnership enabled the primary healthnetwork (WentWest) and local hospital network (Western Sydney Local Health District —WSLHD) to rapidly develop a COVID-19 screening, assessment and management model centredon community and primary care. WentWest and WSLHD set up 20 COVID-19 screening andtreatment clinics and developed a risk-based response model delivered by primary care clinicsand hospitals. A dedicated clinic offered culturally safe screening and support for Aboriginal andTorres Strait Islander people living in the area.Royal Perth

affect the health, wellbeing and income of nearly four in ten Australians. For some, the effects are debilitating. For the health system, the increasing prevalence of chronic conditions comes at a substantial cost. About 38 billion is spent annually in the health system to provide care to people with chronic conditions (figure 1).