Christopher Joye on the NBN

Christopher Joye has an excellent piece in the ABC’s Drum website about the ‘economics’ of the NBN.  I would recommend you read it in full. He makes the new point that the addition to the nation’s debt is in fact very substantial and that the opportunity cost of this initiative is extremely high when consideration is given to the initiatives foregone.

Now the Prime Minister is spruiking the benefits of the NBN by reference to its ability to facilitate medical consultations and promising a special Medicare rebate for broadband consultations. It’s hard to know from whom she is receiving her advice, but the reality is that the scope for broadband medical consultations is very limited indeed.

Just think about – why don’t all us suburbanites receive our medical consultations using broadband conferencing – which is feasible at the moment – if it were such a good idea.  Think of the efficiency gains. But face-to-face consultations are either technically required – hard to feel that tummy over the internet – or overwhelmingly preferred as doctors pick up various cues from being in the physical presence of their patients. (And I am leaving aside the emotional side of the doctor-patient relationship – the comforting pat, for instance.) And of course, anything procedural requires contiguity between patient and doctor/health care provider.

There is also an assumption in the Prime Minister’s proposal that there is a standing army of specialists able and willing to sit in front of screens to ‘consult’ patients located elsewhere.  This is an heroic assumption at this stage and for quite some time into the future.

Now internet-enabled consultations can play some limited role in some limited circumstances – opthamology, radiology, psychiatry (although empathy over the wire might be a bit of stretch) are possibilities.  But to use this example as something that justifies $42 billion of taxpayer money is a ridiculous.

And I have made the point before, that proper evaluations need to be undertaken of  the various call centre health initiatives, such as Nurse On-Call, before extending them.  Understandably driven by strict protocols and attempts to minimise risk, it is unclear whether the value of these services – say, by reducing the flow of patients to Emergency Departments – is greater than the costs.

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16 Responses to Christopher Joye on the NBN

  1. pedro says:

    Some idiot in the Oz today was claiming that the NBN will transform Australia. The thing the ALP has done well in this and the last election is find something pretty dumb that people can get all religious about.

  2. Rajat Sood says:

    Also a pretty good NBN article by Turnbull on Business Spectator.

  3. pedro says:

    “JULIA Gillard has vowed to transform the health system by allowing rural and regional Australians to see specialists using videoconferencing and online consultations.”

  4. JC says:

    yea… heaven forbid and Gillers needs an operation… let’s see if she would undergo surgery with the specialist in a remote location and the GP cutting and administering an anesthetic.

    It’s too late but perhaps the real guinea pig or in this case turkey should have been the little turd himself. A local GP should have performed Keyhole and ripped his gallbladder out while a specialist was overseeing it remotely.

    That would have been fun.

  5. Karl Kessel says:

    Why on earth couldn’t the coalition get someone like this to brief Abbott before he got eaten by Kerry O’brien?

    Given that Abbott’s insurgent campaign has been so successful, beating the ETS, toppling Turnbull and then Rudd it’s surprising that he was not better prepared for questions on the NBN.

  6. Andrew Reynolds says:

    The thing is you can already do this without the NBN – using Skype with a hi-def camera. $43bn (if that is the final price) seems a lot to pay for something we already have.
    The only thing I have heard so far that medically might be useful is doing things like sending MRI scans over the NBN, as the amount of data from one of these is huge.
    The odd thing is that I do not have an MRI scanner at home to generate the results. Is one of these to be supplied as part of the package?

  7. Alex Pundit says:

    I saw Chris Joye on the Contrarians with Van Onselen on Saturday. I must say he completely blew me away with his breadth of knowledge on this subject and economics. He was in favour of government spending on infrastructure (although not sure if in the Keynesian sense) but the funniest thing was is that he got one of the other panelists, a scruffy old feminist, almost screaming at him when he picked apart the NBN (I get the feeling she was a partisan lefty). I wish there was video of it lying around somewhere.

  8. Karl Kessel says:


    Exactly. There is a fun Background Briefing floating around where they ask around for what the ‘killer app’ is for the NBN and they admit there isn’t one.

  9. Alex Pundit says:

    Sorry, was my comment out of order or something?

    [No. That’s how long it took for me to approve the comment. Sinc]

  10. Siltstone says:

    Video diagnosis will be good for one section of society – ambulance chasing legal types. Imagine the specialist, Mr Smith, in the witness box as he is asked “did you or did you not physically examine the patient prior to determining the treatment that preceeded his untimely death?’

  11. dover_beach says:

    Some of the comments that follow the above article are amazingly stupid.

  12. Friends of mine run a radiology business. They had setup a system where the MRI and CT scans were done in Australia and then read by radiologists overseas – mainly Israel I think. Instead of paying an Australian radiologist a minimum of $450k per year to read them (and providing a carpeted car space for their Mercedes, and a day off a week to play golf), they signed up suitably qualified Israeli’s to do it on a per-scan basis. They managed to slash the cost of a scan quite considerably, and were able to do it using existing broadband infrastructure (and they have clinics in quite a few regional and rural centres).

    The federal govt shut that idea down – didn’t like the idea of foreign doctors doing the work.

    So yes, some medical diagnosis can be done over the wire. It can be done right now. It was being done several years ago. NBN not required. Sorry.

  13. rog says:

    Christopher Joye doesnt claim to be an expert on NBN – he often cites others like Gans. Which is why he offers concepts like foreign bulk diagnoses of routine medical complaints as routine – a bizarre scenario – “efficiency gains” for who?

  14. JC says:

    …he often cites others like Gans. Which is why he offers concepts like foreign bulk diagnoses of routine medical complaints as routine – a bizarre scenario – “efficiency gains” for who?

    There are foreign bulk diagnosis right now you uneducated twit, Wodge. and the efficient gains are there too.

    A large number of our scanning diagnosis is shifted overseas in places like India sent over the web and the result returned the following morning sitting on the GPS or specialists desk. In fact in some cases the turn around time is one hour… (An efficiency gain)

    Joye knows what he’s talking about. You don’t.

    This is the reason no one has any time for you, you bogan nimrod.

  15. rog, if I understand correctly, there is the radiographer (who operates the machine) and the radiologist (who reads the scans).

    A radiographer generally needs to be sitting near the machine to drive it – as their job is to position you correctly within the machine and to scan the correct body parts.

    A radiologist can sit anywhere to read those scans – in an office down the hall, at home, in an office in another city or in another country. All they need is a fancy printer to run off the scans.

    Installing an MRI machine in Dubbo for instance is pretty easy (assuming you have the $2 million to buy and install it). However, moving a radiologist to Dubbo is another matter. Doctors, especially specialists, don’t want to live or work west of George St. You either pay a super-premium to attract a radiologist, or you simply ship the scans over the wire and allow the radiologist to live wherever they choose.

    Which might be near the Ganges.

  16. . says:

    “Which is why he offers concepts like foreign bulk diagnoses of routine medical complaints as routine – a bizarre scenario – “efficiency gains” for who?”

    Um like you know, the people who actually use inputs to produce valuable, marketable outputs?

    rog, don’t use vaugeness as some sort of argument. “Ernestine Gross” on LP and Kwiggen once argued over efficiency until blue in the face, then having lost the argument, then said “those who gain are anonymous, what about the community”…or some other such blather.

    Much like the “happiness” debate. The left lose about socialism vs free enterprise. They then say free enterprise makes you unhappy. Now they’ve lost that debate, they either try to say it will kill you or that we can’t do anything risky as a matter of principle.

    Here are the facts rog. Please don’t change the focus of the debate again.

    The NBN is unnecessary. Internode were offering 100 Mbit speeds at half of the average cost of the NBN before the NBN was announced. The NBN will not be completed before 2020 (despite what the Government thinks).

    Satellite broadband is about one sixth to half the cost of the Internode stuff, and is already almost half as fast as the NBN will be for the remote communities.

    Then there is the potential growth in wireless latency and bandwidth.

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