From evidence based medicine to value based healthcare – is Australia ready?
Written by Niamh O'Reilly


Australia’s healthcare system is complex with both Federal and State Governments sharing the responsibilities of funding and delivering healthcare services, which are further split between public and private sectors (1). In making healthcare purchasing decisions, the Australian Government develops policies grounded on an evidence based medicine (EBM) approach (1, 2, 4). EBM harnesses data ranked according to its quality to inform decisions relating to health care policies and the approval of products for reimbursement (5). The preparation of high-quality data, such as systematic reviews and meta-analyses requires a high level of expertise and critical appraisal, therefore these resources provide a higher level of confidence and are therefore ranked at the top of the pyramid, as shown in Figure 1.

Figure 1. Evidence based medicine approach


Adapted from an evidence based medicine pyramid generated by Dartmouth College (6) and Central Michigan University (7).

Health service reforms are needed to tackle the burden of rising costs

A recent health policy report by the Organisation for Economic Co-operation and Developments has flagged that Australia has the 5th most obese population among all OECD country’s (1). Additionally, the aging population is increasing (1 in 4 Australians will be over 65 by 2060) and this population has a higher need for health services (7, 8). Health service experts are concerned with the cost burden being placed on the healthcare system due to increasing levels of chronic illness and aging populations.

Is value based healthcare the answer?

Value based healthcare (VBHC) combines the use of robust clinical data with cost-benefit analysis of real world data and a patient-centric approach, as shown in Figure 2. This system would see reimbursement based on quality of care and patient outcomes in the real world rather than the volume of procedures and patient visits (10). This approach aims to encourage the use of real world data via ‘pay for performance’ programs to extract greater value from the healthcare services provided (11).

Figure 2. Value based healthcare approach

From evidence based medicine to value based healthcare – is Australia ready?

In 2012, the Boston Consulting Group published a report analysing progress in developing infrastructure (patient registries and programs to capture quality data) to enable a VBHC system (12). Each country’s progress was examined using four categories; clinician engagement, national infrastructure, data quality and data use. Australia scored low in relation to readiness to implement a VBHC system, particularly in terms of data use and infrastructure. In 2016, 25 countries were examined for indicators of alignment with VBHC parameters (11). This assessment again described Australia’s overall alignment as moderate and noted that Government and major payers have not yet implemented plans for systematic change. While Australia has made some progress in terms of setting up disease registries, there is to date a lack of data sharing which reduces the usefulness of these registries (13).

Ultimately, it needs to be determined whether the upfront cost of putting in place new policies, infrastructure, disease registries and data analysis resources will ultimately result in long-term cost reduction and benefits to the Australian community.

Collaborative partnerships to progress VBHC solutions

Pay for performance solutions based on real world health outcomes aim to maximise value in the healthcare system for all stakeholders and countries are increasingly moving towards VBHC to more efficiently and effectively manage rising healthcare costs. Implementing VBHC solutions in Australia would require the collaborative efforts of these various stakeholders. CRC is well positioned to work with them in progressing potential VBHC solutions for clients by drawing on our extensive range of medical affairs and market access capabilities.


1. Organisation for Economic Co-operation and Developments. OECD Health policy in Australia. 2015.

2. Australian Department of Health. Evidence-based medicine and POCT. http://www.health.gov.au/internet/publications/publishing.nsf/Content/qupp-review~qupp-evidence-based-medicine-poct. 2013

3. Australian Department of Health. Evidence Based Practice. http://www.health.gov.au/internet/publications/publishing.nsf/Content/natsihp-companion-toc~invest-enablers~evidence

4. Australian Commission on Safety and Quality in Health Care. Australian Safety and Quality Framework for Health Care: Putting the Framework into Action: Getting started. 2016.

5. Sackett DL, Rosenberg WM, Gray J, Haynes RB, Richardson WS. Evidence Based Medicine: What it is and what it isn’t. British Medical Journal. 1996; 312

6. Glover J, Izzo D, Odato K, Wang L. Darthmouth College. 

7. University CM. Evidence based medicine pyramid. http://libguides.cmich.edu/cmed/ebm/pyramid

8. Braithwaite J. Robust, evidence-based treatment will boost ailing medical system. The Australian. 2016. 

9. Amalberti R, Nicklin W, Braithwaite J. Preparing national health systems to cope with the impending tsunami of ageing and its associated complexities: Towards more sustainable health care. Int J Qual Heal Care. 2016; 28(3):412–4.

10. Porter ME. A Strategy for Health Care Reform – Toward a Value-based System.

N Engl J Med. 2010; 363 (1): 1-3

11. The Economist Intelligence Unit. Value-based healthcare?: A global assessment. 2016.

12. The Boston Consulting Group. Progress Toward Value-Based Health Care. 2012.

13. The Economist Intelligence Unit. Value-based healthcare: A global assessment. Country Snapshot: Australia. 2016.