Home' Policy Magazine : Policy Vol 32 - No 4 Contents 18 POLICY • Vol. 32 No. 4 • Summer 2016--2017
otherwise impede new ways of doing business
creates an 'ecosystem' in which innovation can
ourish and percolate into the rest of the economy.
Establishing 'free trade zones' for health
innovation in Australia would be more than just
another reform 'process'. Within the geographic
areas declared to be HICs, healthcare providers
could apply for exemptions from existing
legislation to permit the creation of alternative
payment and service models that are currently
banned under Medicare and the Health Insurance
Act. Companies, start-up entrepreneurs, charities,
private health funds, federal government health
agencies, Primary Health Networks (PHNs), state
government health agencies and Local Hospital
Districts (LHDs) would all be eligible to apply
for registration as HIC-exempt providers of
approved clinical services.
HICs would not only liberate organisations,
both public and private, to develop integrated
models of care. HICs would also make it legal for
consumers to choose a publicly-funded alternative
to current Medicare arrangements---the existing
MBS bene ts for GP and other medical and
primary care services and right of access to free
public hospital care---on an opt-in basis.
applicability and success by the time promising
trials are ready to be fully rolled out to the general
population. Hence, trials have come and gone in
the past, and led nowhere in terms of long-term
Health Innovation Communities (HICs) can
circumvent and avoid the pitfalls of 'big bang'
reform, and minimise the inherent dangers of
gambling $155 billion or the 10% of GDP spent
annually on health on one big 'solution', but still
allow for innovation---for disruption of established
health payment and service delivery models---in a
real world-applicable, commercial and competitive
environment that would yield hard evidence beyond
trial quality, as well as establishing governance and
institutional structures that would support the case
for scaling up reform.
A modus vivendi for disruption
HICs are based on the concept of free trade zones,
which o er tax and other incentives to promote
trade and development. Removing rigid rules,
regulations and other disincentives that would
Health Innovation Communities (HICs): Key Design Features
HICs will be established in three to five areas (including a mix of urban and regional regions) to provide critical mass, benchmarking
and competitive tension. Preferred locations will have proximity between a major hospital, university or medical school to support
research, collaboration, training, measurement and control in partnership with Australia's renowned and world-leading publicly-
funded medical research industry.
Ideal sites will also have a target population base with high rates of obesity, chronic disease, and frequent use of hospital services
related to chronic illness, and may include, for example, the catchment area for Westmead Hospital in Western Sydney, the
Hunter region in mid-north coast of NSW, and the state of Tasmania.
• In areas declared HICs, healthcare providers will apply for exemptions from existing health legislation and regulations to allow
for the use of alternative payment and service delivery models that are currently banned under Medicare and the Health
• Companies, start-up entrepreneurs, charities, private health funds, and federal and state government health agencies could all
apply for registration as HIC-exempt providers by a joint government and industry-led HIC Commission.
• Exempt providers will accept and recruit individuals who want an alternative to the existing public and private health systems
and who voluntarily choose to opt-in to an Integrated Care Plan (ICP).
• ICPs will require existing public and private sources of health funding to be pooled on a capitation basis. This is necessary
to support genuinely integrated care, and give providers the ability, flexibility and financial incentive to develop new, cost-
effective care pathways.
• Appropriate safeguards will include a right for customers, when outside HICs, to access emergency care from traditional
Medicare and private health insurance providers.
• Customers within HICs will also have the right to break the ICP service contract, and return to default Medicare and private
insurance arrangements in exceptional or egregious circumstances as determined by an ICP Ombudsman. If ICP providers fail,
consumers can also default back to Medicare, meaning no-one will ever miss out on access to essential healthcare.
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