A new economic report looking at Australia’s investment in preventive health has found we rank poorly on the world stage
Governments must spend more wisely to contain the burgeoning healthcare budget, it says.
One in two Australians suffer from chronic disease, which is responsible for 83% of all premature deaths in Australia, and accounts for 66% of the burden of disease.
The report, Preventive health: How much does Australia spend and is it enough? was co-funded by the Heart Foundation, Kidney Australia, Alzheimer’s Australia, the Australia Health Promotion Association and the Foundation for Alcohol Research and Education.
Produced by La Trobe University’s Department of Public Health, the report examines trends in preventive health spending, comparing Australia’s spending on preventive health, as well as the funding models used, against selected Organisation for Economic Co-operation and Development (OECD) countries.
The report also explores the question: ‘how much should Australia be spending on preventive health?’
Treating chronic disease costs the Australian community an estimated $27 billion annually, accounting for more than a third of our national health budget.
Yet Australia currently spends just over $2 billion on preventive health each year, or around $89 per person. At just 1.34% of Australian healthcare expenditure, the amount is considerably less than OECD countries Canada, New Zealand and the United Kingdom, with Australia ranked 16th out of 31 OECD countries by per capita expenditure.
Michael Thorn, Chief Executive of the Foundation for Alcohol Research and Education (FARE), a founding member organisation of the Prevention 1st campaign, says that when looking at Australia’s spend on prevention, it should be remembered that one-third of all chronic diseases are preventable and can be traced to four lifestyle risk factors:
- Alcohol use
- Tobacco use
- Physical inactivity
- Poor nutrition
“We know that by positively addressing and influencing lifestyle factors such as physical activity, diet, tobacco and alcohol consumption, we will significantly reduce the level of heart disease, stroke, heart failure, chronic kidney disease, lung disease and type 2 diabetes; conditions that are preventable, all too common, and placing great pressure on Australian families and on Australia’s healthcare systems,” Mr Thorn said.
Report co-author, Professor Alan Shiell says we should not simply conclude that Australia should spend more on preventive health simply because we spend less than equivalent nations, and instead argues that Australia could and should spend more on preventive health measures based on the evidence of the cost-effectiveness of preventive health intervention.
“The key to determining the appropriate prevention spend is to compare the added value of an increase in spending on preventive health against the opportunity cost of doing so.
“If the value of the increased spending on preventive health is greater than the opportunity cost, then there is a strong case to do so,” Professor Shiell said.
Professor Shiell says there is clear evidence that many existing preventive health initiatives are cost-effective.
“Studies suggest Australia’s health could be improved and spending potentially even reduced if government was to act on existing policy recommendations and increase spending on activities already considered cost-effective.
“We also suspect that the choice of funding mechanism, or how money is allocated to whom for prevention – is an important factor for the overall efficiency of health prevention expenditure,” Professor Shiell said.
The report highlights England’s efforts in evaluating and monitoring the cost effectiveness and success of its public health interventions and Mr Thorn believes Australia would do well to follow their lead.
“In the United Kingdom we have a conservative government no less, showing tremendous leadership to tackle chronic disease, with bold policy measures like the recently introduced sugar tax and broad-based physical activity programs, all of which are underpinned by robust institutional structures,” Mr Thorn said.
Complementary Medicines Australia (CMA) welcomed the publication and said it strongly supports the need for Australia to spend more on preventive health measures that are based on evidence of cost-effectiveness.
“There is a real and immediate role for smarter preventive health,” said its CEO, Carl Gibson.
“This is not limited to, but certainly includes, the use of complementary medicines for primary and secondary prevention of illness, and encouraging and empowering all Australians to take better care of their health.
“Reports have indicated that selected complementary medicines are able to be highly cost effective, especially in the prevention and management of chronic conditions.”