Whilst the reputation for the intern experience is one of fetching coffees for superiors and photocopying a litany of documents, the experience I was fortunate to have at the Grattan Institute over Summer 2012/13 will be one to remain with me for years to come.
Founded in 2008 with financial endowments from the Federal and State governments, BHP Billiton and in kind support from the University of Melbourne, the Grattan Institute has sought to carve out a role as one of Australia’s most significant think tanks, specifically focused on public policy. Since founding, it has released a variety of influential reports on key policy issues with its most notable work released last year concerning the significant reforms that could unleash a new wave of economic growth in Australia.
In this vein of significant reforms to the way things are done in Australia, Grattan recently opened a new program of health research. The seriousness of Grattan’s intent with which to influence the debate on health in Australia was further highlighted with the appointment of Dr. Stephen Duckett as its program director; a respected healthcare expert who has held policy leadership positions in Australia and Canada known for his various reform proposals to funding and accountability within hospitals.
It was in the health team to which I was allocated for my five week internship over Summer. For the health team, the initial report was to have a sweeping analysis of waste in expenditure across the system, but the ultimate focus of the recently released inaugural work was into drug pricing.
Whilst the expectation is there for you to deliver high quality work – be it stakeholder analysis, literature reviews or management of extensive datasets – the Grattan model is one that is fundamentally built on collaboration between teams. Despite the natural hesitancy at the beginning of a new position, the fact that you could go chat with an Associate or Program Director (who all have extensive experience in the public and private sectors), about a query related to your work made the internship productive from the outset.
That’s not to say that there isn’t a well established model for how these reports are tackled. I discussed these topics and more with my colleague on the internship and Grattan Senior Associate, Peter Breadon. Despite the admittedly non-linearity of the report process Breadon explained that they generally, “move through phases that focus on scoping, analysis, report-writing, consultation and publication – hopefully with some policy change at the end of it all.” Further to the discussion of the non-linearity of the process, Breadon outlined how in all reports there is frequent consultation with key stakeholders in the project. In the context of the first report into drug pricing, there was regular engagement with expert academics, clinicians and government officials. Consequently there may be opportunities to re-scope the project and include extra elements to the reform proposal; with Breadon raising one such example of taking implementation risk into account.
From my end one of the key challenges that came with conducting research was the fact that on occasions, a week’s worth of analysis can bring about insignificant outcomes. In the context of my research into areas of waste in health expenditure, this was reflected in an extensive benchmarking analysis realising minimal savings from a total spending in 2010-11 of nearly $130 billion. Whilst one has to expect these ‘rats and mice’ to emerge from your research from time to time, Breadon explained that in their analysis of drug pricing it was clear where the big benefits were; and thus the areas to focus on.
“In this case, our benchmarking showed that 89% of the savings (from better prices for identical drugs) came from generics. Australian prices are seven times New Zealand’s, but ‘only’ 40% higher for patented drugs. The premium for patented drugs is still a concern, but it’s nothing like the problem we have with our sky-high generic drug prices. Once it’s clear where the biggest problems or opportunities are, we focus on whether they can be addressed with public policy, and whether the best solutions pose risks. In this case, the biggest savings came from cutting generic drug prices, which also posed the fewest risks (for example risks to access to drugs, and risks to patient choice).”
But with all of Grattan’s work comes the desire for long-term reform; the kind that goes beyond the easy elements that all parties can agree upon and requires shared sacrifice for the greater benefit. The challenge with such proposals, as Breadon highlighted, is that these substantial long-term benefits are often “harder to quantify with confidence.” To compensate, the drug pricing report suggested that such changes to promote cost-effective drug choices be implemented in later-stage reform.
The main outcome of the drug pricing report, a months-long endeavour, was that the Pharmaceutical Benefits Scheme pays at least $1.3 billion a year too much for prescription drugs. This is derived based on benchmarking against the public hospital systems in New Zealand and two Australian states. Of note is that New Zealand’s pricing system involves independent experts making decisions absent of the influence of vested interests. And whilst Breadon is encouraged that the Government has taken the report’s recommendations seriously (as the Budget-making process takes shape) along with the Opposition and the Greens, he is pragmatic about the nature of public policy reform, and the inherent nature for governments to make policy and political calculations first.
For the issue of high generic drug prices, the two significant moments will come with the Federal Budget in May and when the current agreement between the Federal Government and Medicines Australia expires in mid-2014, creating an ideal opportunity for Grattan’s reform proposals to be implemented. Going forward for Breadon and the rest of the health team, after their recent successes there will be further research into health funding trends and the makeup of the health workforce.
So as Grattan’s work continues to develop over the next few years I’ll look back on my Summer internship with fondness, mindful of all the new skills I’ve acquired in research, data manipulation and stakeholder analysis. But above all else, it was the opportunity to work alongside the likes of Breadon, Duckett and all the immensely talented people of the Grattan Institute that I’ll value the most. And if there’s some significant public policy reform along the way, of which I’m sure there’ll be some, then it’ll make it all better.
To read further about the Grattan Institute, visit http://grattan.edu.au
To read further on Grattan Health’s first report, Australia’s Bad Drug Deal, visit http://grattan.edu.au/publications/reports/post/australias-bad-drug-deal/
To learn more about Grattan’s internships program, visit http://grattan.edu.au/about-us/careers
You can follow me on Twitter @CRJWeinberg.