This third 2020 publication from the Poverty and Inequality Partnership between the Australian Council of Social Service and UNSW (Sydney) is written as the global COVID-19 pandemic continues to devastate countries throughout the world. It summarises the extent and effects of income and wealth inequality before the virus hit, and provides a lens through which to assess the impacts of COVID-19 as the pandemic continues and governments and businesses respond.
Australia’s health system was designed more than a generation ago. Since then our health care needs and expectations of the health system have changed. To ensure our health system can continue to meet our needs, it is important that it is reviewed on a regular basis and changes are made to respond to changing community needs and take into account the findings of recent research.
Preventive health is the most cost-effective use of our health dollars. Given the ageing of our population and the increasing rates of chronic disease, it is important that we invest in the future health and well-being of our community through evidence-based and targeted preventive health programs.
Investing in prevention and public health keeps people well and out of hospital, improving productivity and reducing pressure on the health system. Australia has a proud and world-leading record of successful preventive health campaigns, such as tobacco reduction and road accident reduction strategies, which have very significantly reduced harmful behaviours, illness and death rates, and the massive health care costs associated with them.
However, there are many gaps in Australia’s current preventive health efforts, including in relation to obesity, injury prevention, mental health and domestic violence. Increased efforts in these key areas can help Australians maximise their health and well-being and reduce unnecessary and inefficient health spending.
To achieve this, AHCRA supports increasing the level of Federal funding for prevention from 1.5% to 5% of the health budget. This would increase health spending in this area by around $5 billion per year – less than the amount currently allocated to the PHI rebate. One important use for this funding would be to improve nutrition across our population.
Optimum nutrition is fundamental to good health at all stages of life. It is essential for normal growth and development, resistance to infection and protection against chronic disease, obesity and premature death.
However, the available evidence indicates that the diets of most Australians do not nearly meet the recommendations made in the Australian Dietary Guidelines. For example, less than 4% of Australians meet the recommended usual daily intake of vegetables. Australia also has one of the highest rates of obesity in the world with over 50% of adults classified as overweight or obese.
AHCRA supports immediate, evidence-based and comprehensive national action to address the health, social and economic costs of increasing rates of obesity and other diet related chronic diseases. This should be based on a social determinants of health perspective and address the wide range of economic, cultural, geographical and social barriers to a healthy diet
There are many positive features of the Australian health system. Overall, we spend around the OECD average on health care (as a proportion of GDP) and achieve above average health outcomes. We have high quality, dedicated medical and health care professionals and a “universal” medical and pharmaceutical benefits scheme.
However, despite these positives there are many areas in which our health system needs to improve. In particular, we need to do more to address inequalities in health status between different groups in the community, such as Indigenous vs non-Indigenous, affluent vs disadvantaged and rural vs urban.
We also need to focus more on preventing and managing chronic and complex conditions. This requires changing the way in which we fund and deliver healthcare, including moving away from a time-based, fee-for-service funding system which rewards activity rather than outcome.
The following three graphs illustrate key problems within our health system. They are why AHCRA advocates re-orienting our health system around prevention and primary health care. We also promote broader economic and social policies which address the social determinants of health to reduce social inequality and give all Australians a fair go.
Graph 1: Avoidable deaths and social exclusion
From: AIHW Australia’s Health 2016
Graph 2: Medicare-funded services per capita by region
Note: this does not take into account non-MBS funded services available in some areas, such as services provided by community health centres
From: AIHW Australia’s Health 2016
Graph 3: Percentage of total health budget spent on prevention
From the Public Health Advocacy Institute of Western Australia www.phaiwa.org.au
Out-of-pocket health costs (OOPs) are a major challenge facing the Australian health system. Australians pay for a higher proportion of total health care in OOPs than do citizens of almost all OECD countries (see infographic below). In fact, OOPs are the third largest funder of health care in Australia, after Commonwealth and State/Territory Governments.
Yet despite the importance of OOPs in influencing access to health care, this area is a policy vacuum. We have no policy framework for addressing OOPs across the spectrum of the health system and no government department or body that takes responsibility for overseeing how these costs impact on consumers. In fact, we lack even the basic data on what consumers pay for a range of different forms of health care and how these impact upon different groups in the community.
A recent survey undertaken by the Consumers Health Forum demonstrates that consumers’ experience of OOPs is frequently unpredictable, inconsistent and inequitable. It showed that for many consumers OOPs create financial hardship and stress at an already difficult time of life. For some they mean a choice between vital health care and other necessities.
The establishment of the Ministerial Advisory Committee on Out-of-Pocket Costs, by the Federal Health Minister Greg Hunt in January 2018 was a positive indication that the Government was seriously looking at this issue. However, this group is dominated by representatives of the medical profession with only minimal consumer representation. It had not been able to make any noticeable progress towards addressing the problems facing consumers with high and unexpected health care bills.
AHCRA believes that the problems associated with OOPs can only be addressed through a consumer-focussed approach. This needs to include detailed research on the OOPs consumers experience across different areas of the health system. It also needs to involve much stronger consumer representation in any working groups or committees advising the Government on this issue.
Closing the Gap
AHCRA believes that Indigenous health is the number one health issue facing Australia. It is unacceptable that in Australia today Indigenous people have significantly poorer health and a much lower life expectancy than the non-Indigenous population.
AHCRA supports a comprehensive population-wide approach to Closing the Gap that incorporates the social determinants of health and empowers people to take control of their own lives and improve their health through culturally appropriate mechanisms.
At the centre of efforts to close the health and life expectancy gap are community- controlled health services which provide person-centred and to culturally relevant care, including both a biomedical and preventative health focus. These services and their representative body NACCHO, require more consistent and assured long-term funding to enable effective planning and capacity development that will deliver the best possible outcomes.
AHCRA supports the full implementation of the National Aboriginal and Torres Strait Islander Health Plan and allocating additional funding, including resources currently going into the PHI rebate to achieve the following:
- Allocate secure long-term funding to progress the strategies and actions identified in the National Aboriginal and Torres Strait Islander Health Plan Implementation Plan.
- Provide secure, long-term funding for the Rural Health Outreach Fund and Medical Outreach Indigenous Chronic Disease Program.
- Allocate sufficient and secure long-term funding to the Aboriginal Community Controlled Health Sector to support the sector’s continued provision of Indigenous-led, culturally sensitive healthcare.
- Build and support the capacity of Indigenous health leaders by committing secure long-term funding to the Indigenous National Health Leadership Forum.
- Reinstate funding for a clearinghouse modelled on the previous Closing the Gap clearinghouse, as recommended in the latest draft of the Fifth National Mental Health Plan.
Many chronic diseases are related to lifestyle factors, such as diet, physical activity and alcohol intake.
Many health advocates support increasing taxes on “unhealthy” products, such as fast food and soft drinks, in order to discourage their use.
Supporting and encouraging healthy lifestyle choices is an important policy goal but do taxes on “unhealthy” products actually reduce consumption and do they have any adverse impacts?
This article from The Economist magazine provides an economist’s perspective on “sin” taxes. It argues that while these taxes can reduce consumption, they are extremely regressive and can impact negatively on disadvantaged groups who spend proportionally more of their income on consumption.
In this way, taxing products such as soft drink and junk food can increase poverty among the most disadvantaged and widen the divide between the rich and the poor.
This is why AHCRA supports a tax on sugary drinks only if the funds raised through the tax are used to support disadvantaged groups and to address health inequalities.
We also support other measures to address the unequal access to health care across our population and to give all Australians the opportunity to maximise their health and well-being.
The social determinants of health (SDH) are defined by the World Health Organisation (WHO) the conditions in which people are born, grow, work, live, and age, and the wider set of forces and systems shaping the conditions of daily life. These forces and systems include economic policies and systems, development agendas, social norms, social policies and political systems.
Social determinants have significant impacts on the health and well-being of people. While they are often not specifically addressed by health policies and programs they can have a greater impact on the health of individuals and communities than a hospital or health service. For this reason AHCRA advocates for a social determinants approach to health policies which takes into account the impact of broader economic, social and environmental factors on health and well-being.
An excellent overview of why social determinants are important in Australia is provided by Sir Michael Marmot, Professor of Epidemiology and Public Health, University College London in his 2016 Boyer lectures – “Fair Australia: Social Justice and the Health Gap – exploring the challenges faced by communities in solving issues around health inequality”
In 2013, the Senate Standing Committees on Community Affairs conducted an inquiry into Australia’s domestic response to the World Health Organization’s (WHO) Commission on Social Determinants of Health. The report from this Inquiry, Closing the gap within a generation, recommends a comprehensive approach to improving the health of disadvantaged groups in the community. AHCRA supports the full implementation of this report.
One study has estimated that half a million Australians could be spared chronic illness, $2.3 billion in annual hospital costs saved, and Pharmaceutical Benefits Scheme prescriptions cut by 5.3 million, if the health gaps between the most and least disadvantaged were closed.
Additional information on social determinants of health can be found in Social Determinants of Health: The Solid Facts 2nd Edition and Social determinants of health inequalities and in Australia’s Health 2016
AHCRA strongly supports a Productivity Commission review of private health insurance, as proposed by Shadow Health Minister Catherine King. We believe that this review also needs to include a systematic and comprehensive consumer consultation process
Private health insurance is a key funding mechanism for private health services and attracts taxpayer funded direct subsidies of around $8 billion per year. Despite this, there has been no comprehensive review of PHI and the subsidies this industry receives.
Almost 20 years after the PHI rebate was introduced it is clear that it has not achieved the goals set for it, i.e. to ensure PHI was affordable to all Australians and to take the pressure off the public system.
It is also clear from the increased complaints about PHI received by the that consumers are increasingly dissatisfied with the growing costs and diminishing benefits of PHI.
This demonstrates the need for a rigorous review of the current system to assess its performance against our health system goals of equity, efficiency and sustainability.
In addition to this, many health economists and experts have outlined some of the current problems with PHI, including the lack of control health funds can exert over prices and the high administrative costs (due partly to the large number of separate funds).
It’s time that we had an independent and rigorous review of the PHI sector and the subsidies it receives with a view to improving the equity, efficiency and sustainability of our health system.
Currently pharmacies are subject to a number of regulations limiting their ownership to qualified pharmacists and placing location restrictions on the opening of new pharmacies. These rules restrict competition within the pharmacy market by protecting existing pharmacies from competition from non-pharmacist retailers and newly qualified pharmacists.
The Harper Review into competition policy has found that restrictions undermine the efficiency of the health system through reducing competition in the provision of medicines. It stated that existing restrictions “limit the ability of consumers to choose where to obtain pharmacy products and services, and the ability of providers to meet consumers’ preferences.”
AHCRA supports deregulating pharmacy ownership and location rules to increase competition and efficiency within the pharmacy sector. This would lead to increased access to medicines for consumers and greater overall efficiency.
At the same time there may be useful extensions of community pharmacists’ roles that would make some elements of testing and care more readily available to consumers. Pharmacists would need to link with consumers’ GPs to ensure they are part of each consumer’s overall care team.
Pharmacists are highly skilled health professionals who are a vital component of the health system. We need better ways of funding and supporting them to ensure they can use their skills and experience to provide maximum benefit to the community.
Dental health is essential for overall health and well-being but dental care is one of the most inefficient and inequitable areas of the Australian health system. Less than 50% of adults currently receive adequate dental care with access highly dependent upon income. In fact, those earning over $140 000 p.a. are more than twice as likely (57%) to receive regular check-ups as those earning less than $30 000 p.a. (27%).
Adults who are eligible for public dental services often experience long waiting times for care, during which time problems can become more serious, leading to potentially preventable tooth loss. Poor access to dental care compounds the disadvantage already experienced by many low income and disadvantaged groups. Without good dental health it is very difficult to maintain employment or participate fully in education and social life. Poor dental health can also seriously complicate the management of multiple other chronic diseases.
Currently, the most socio-economically disadvantaged people have the poorest oral health and greatest treatment needs. This is already a major problem that will only become more serious with the ageing of our population. 87% of dental care in Australia is provided in the private sector and dentistry in general operates within an outdated bio-medical model of care which is inflexible, insufficiently engages patients as partners and is too disease and treatment oriented.
To meet the future health care needs of our community we need to break down the division between primary health and oral health and ensure that all Australians can access timely screening and referral, dental check-ups and basic and preventive dental care.
This requires cooperative actions from both the Commonwealth and state/territory governments to bring oral health care within the universal Medicare health system and oral health promotion within national prevention programs.