2020 CEO Survey: Craig Drummond, Medibank

We need to protect our health system and make it even better — the pandemic showed us how to, says Medibank CEO Craig Drummond.

Medibank chief executive Craig Drummond. Picture: John Feder

What are the three enduring lessons or changes to flow from COVID-19?

The strength and flexibility of Australia’s dual public-private health system during COVID-19 has proven why it is the envy of many countries around the world. We need to protect it and make it even better.

COVID-19 has fast-forwarded the delivery of healthcare outside the traditional hospital setting. Many more Australians chose to receive hospital in the home and telehealth services this year and experienced the many benefits. While COVID-19 has highlighted the quality of clinical outcomes and the value of such programs to more people, the benefits to our customers and the health system will be critical post pandemic as our population continues to age.

The future of work will be a significant change. Flexibility was already a big part of Medibank’s culture prior to COVID-19, but the pandemic will take this to a new level. Our employee engagement and customer advocacy has never been higher, and we are working with our people on the office becoming a place to collaborate and connect. It will mean that our people spend less time commuting, and more time at home. Which is good for their health and wellbeing, their engagement and ultimately their productivity.

How would you rate the shape of the Australian economy as we head into the new year?

The fundamentals of the Australian economy remain strong, more so given our controlled COVID-19 environment. While there is still a lot of uncertainty, there’s also a case for optimism. Globally fiscal stimulus will underwrite commodity demand and prices, Australia’s largest private sector employers remain in strong financial shape and as the vaccine takes effect through 2021 tourism and education services are well placed to rebound strongly. Critically all of this is against the backdrop of a strong banking system, unprecedented economic stimulus and an Australian government fiscal position that is sustainable.

READ MORE: CEO Survey 2020

What three reforms are needed to sustainably grow the economy?

Australia has a productivity challenge and reforms must be aimed at boosting long-term productivity growth rather than the current state of gradual productivity decline. Importantly, the only way we’re likely to see a return to stronger real wage growth is if productivity goes up. That said, there’s no single reform that is going to dramatically boost productivity in one shot. But there are sensible reforms that should be looked at.

First, overlapping regulation across the nation should be streamlined, particularly for things like vocational qualifications and development planning for bigger infrastructure projects. Second, there’s more to be done on tax and competition reform, as numerous reviews have demonstrated.

Finally, and perhaps most importantly, leadership across the country — not just politically, but at all levels — must be more willing to accept constructive debate on reform and acknowledge that reform is hard and often needs robust support to be implemented effectively. That’s a real challenge and it’s a change in mindset, but it’s nevertheless very important for our nation’s longer-term success.

What are the three best growth opportunities for your company in 2021?

Australians are more focused on health, and we’ve seen that first hand with the number of people holding on to their private health insurance. In the first part of FY21 we saw strong policyholder growth, so we’ve adjusted our growth aspirations this year. We see one of the best growth options as growing our existing business at a faster rate, which we are very focused on.

There is also increasing scope to think innovatively about how we can free up public and private hospitals to meet the growing demands placed on the healthcare system. Home-based care in areas such as rehab, chemotherapy and dialysis will be a bigger part of the future as will hospital avoidance and hospital substitution programs, as clinically appropriate. Partnerships will be more important than ever, and we will continue to seek out doctor-led partnerships with hospitals to give our customers greater choice. This is the basis for programs such as our no gap joint replacement program which minimises the time patients spend in hospital, where clinically appropriate, by giving them the option to recover and rehabilitate in the comfort of their own home.

Technology will play an increasing role in supporting the delivery of healthcare, with virtual care well suited to many treatment areas. In Adelaide, Medibank and Calvary Health Care will be jointly delivering what is projected to be one of Australia’s largest hospital in the home programs, on behalf of the South Australian government. It will enable virtual consultations directly with patients in their home and include remote monitoring of patients’ pulse, temperature, blood oxygen and blood pressure. These alternative care settings, where clinically appropriate, will grow sharply over the next few years with COVID-19 substantially enhancing their business case.

What impact will digital transformation have on your company?

Our substantial investment in building our digital capability over the past few years has contributed to record customer advocacy and sales growth of more than 60 per cent in the first five months of the year. From an operational perspective, our systems and processes pre-COVID-19 stood us in good stead when we shifted to remote working and diverted our retail teams to a range of virtual customer support channels. We are not going back to the old ways of working, so ongoing substantial investment remains a priority.

How would you rate business, state and federal government performance this year?

On any sort of international comparison, you’d have to say that governments across Australia have done a very good job. Australians know that our governments have our backs. And that’s important right now. While there’s scope to look at what could have been done differently or better, there’s also no other country I’d rather be in right now. Business has also rallied and kept their focus (empathy) on customers through one of the most challenging economic periods in recent history.