Healthcare innovation contributes $4bn to economy
Homegrown innovation in the healthcare industry has added $4 billion to the Australian economy in the past year, as businesses focus on delivering better patient outcomes, according to a new CommBank Healthcare Insights Report.
The proportion of healthcare businesses actively innovating has risen from 31% to 47% in the past year — now on par with the national average across all industries.
When considering the industry subsectors, the research shows that social assistance service providers are driving the spike in innovation performance, with 69% of these organisations successfully innovating.
According to the research, 58% of healthcare businesses noted better patient or customer outcomes as a benefit of innovation — far higher than the national average of 41%.
In addition, a relatively high proportion are expecting to see benefits for their staff, including increased engagement (40% compared with 26% nationally) and more knowledgeable employees (38% compared with 25% nationally).
Some headwinds encountered
While innovation activity in the healthcare industry has increased, businesses are still encountering some headwinds. The top challenge to innovation is an internal resistance to change — impacting 36% of organisations, and almost double the national average of 19%.
Other significant challenges to innovation are a lack of human resources (27%), skills (24%) and time (23%). Innovative healthcare organisations are predominantly investing in human resources, with more than one in two allocating spend to staff training and expertise (54%). This is being led by key subsectors, such as general practice.
Technology is the second most common area of investment amongst healthcare businesses, with almost one in two (47%) investing in this area. Of those investing in technology, 48% had allocated spend to IT hardware, followed by digital presence (47%) and IT software (46%).
The research suggests that spend on innovation activity in the healthcare industry overall is far less than the national average, with organisations investing an average of $174,000 compared to the all-industry average of $300,000.
The average estimated improvement in revenue and cost saving as a result of innovation in the healthcare sector is $375,000, which has increased by 14% year-on-year.
Extrapolated further, it suggests a total contribution to the economy of approximately $4 billion, and $2.16 for every dollar spent on innovation.
While financial metrics were an important variable for calculating a ROI for many organisations, they were outweighed by patient outcomes (59%), satisfaction (58%) and staff wellbeing (53%). While profit was a key factor for 51% of healthcare organisations, revenue and funding were only evaluated by less than one in three (31%).
“The reality is that Australian healthcare businesses are often operating with constrained budgets, but the research suggests that while overall spend may be less that other industries, organisations are prioritising investment into their staff and technology and this is delivering a healthy return,” said Cameron Ziebell, National Head of Healthcare, Commonwealth Bank.
“Our research has demonstrated that almost every decision healthcare organisations make centres around their desire to improve outcomes for their customers or patients. As such, financial returns are seen as secondary to patient outcomes and the wellbeing of staff, despite being undeniably important for the sustainability of their operations.”
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