EVEN though a healthy population and a healthy economy go hand in hand, the 2022 federal Budget provides no commitment to much-needed health sector reform.

Healthy workers will be the backbone of our economic bounce-back from the ongoing COVID-19 pandemic. And Australia’s health workforce needs to be in a healthy condition to achieve economic productivity.

Hospitals to remain under pressure

Hospital funding will continue as planned with no increases forthcoming, despite hospitals facing backlogs of patient appointments and deferrals interrupted by COVID-19 waves. Although hospital funding is partly a Commonwealth issue, hospital outcomes are the responsibility of the states. The Budget states that the Commonwealth will meet 45% of the usual hospital costs and that the 6.5% cap on hospital funding growth will remain. Yet every state is seeing emergency departments full, ambulance ramping, and blown-out waiting lists (here and here). This was happening before the COVID-19 pandemic.

The spiraling costs of delivering public hospital care are not being met and are unsustainable. Better decisions need to be made about how to prioritise the delivery of patient-centred, high-quality and financially sustainable care across hospitals and primary care.

When one jurisdiction (Western Australia) conducted an external review examining the sustainability of its health system, the reviewers’ first conclusion was to recommend that spending on public and preventive health be boosted to a minimum of 5% of its health budget by 2029.

A missed opportunity to invest in the public health workforce

The delivery of health services in Australia is complicated by the multiple layers of government and the separation of primary care from hospitals and other services; essentially, the Commonwealth pays the bills and the states deliver the hospital services. COVID-19 has exposed and worsened the pressures on health workers and seen the exodus of highly trained senior staff. Losing skilled staff is a “brain drain”, affects the next generation of health workers, and is costly to replace.

Add to this Australia’s ageing population, growing numbers of people with chronic disease, increasingly costly medical technologies, and health inflation, and we have a perfect storm of pressures being placed on an already COVID-19-weary health workforce.

To help ameliorate the demand on our health system and health workers, we should re-double efforts to address preventable disease, keep people out of hospital, and ensure resources are directed where they are most likely to have the largest benefit. We urgently need major improvement in how we attract, educate, train, deploy and retain a much larger public health workforce (ie, those working on prevention, health promotion, and population interventions, as well as outbreak preparedness and response) than existed before the pandemic struck.

Last week’s Budget announced several funding items for specific groups (particularly women’s cancers), mental health programs, and retaining telehealth services. Yet the majority of funding went to high cost pharmaceutical treatments ($878.7 million over 5 years), which occur during routine health technology assessments and funding decisions, independent of any Budget measures. While welcome, the additional small spends to very specific groups represent a missed opportunity to enact real reform and population-wide health gains. Major gaps exist for funding dental health care, hospital funding to manage patient deferrals created by COVID-19, general practice incentives/reform, and out-of-pocket costs.

Cost of living takes center stage, but where’s the relief for out-of-pocket health spending?

The Budget’s corner piece was about temporary cost-of-living payouts. But the very real medical financial pressures for patients that can affect household finances and clinical care did not receive any attention in the Budget. Although doctor–patient conversations on the cost of care are important, doctors and nurses should not bear the brunt of finding ways to reduce out-of-pocket costs for their patientshas happened in the US. Dealing with financial pressures is not their key role and health care workers often do not have the time, training, knowledge or support services to do this effectively.

High medical out-of-pocket expenses accrue from medications, scans and investigations, allied health, unplanned hospitalisations, and prolonged treatments as well as travel, parking, and needing time off work. Australians are very concerned about the affordability of care and medicines. Those unable to pay for medical bills are the poorest and sickest, and health inequities will continue to grow unless action is taken (here and here). To reduce out-of-pocket costs, it has been suggested the Federal government fund bulk-billed specialist services in private clinics, especially in poorer parts of Australia while State governments expand outpatient services to reduce wait times. The Federal government could also reduce specialist referrals by paying specialists for giving GPs over-the-phone advice about patients. For pharmaceutical out-of-pocket costs, they could lower co-payments especially for people with chronic conditions.

Social, economic and commercial drivers of chronic disease ignored

Chronic diseases, while common in older Australians, are increasing among younger working-age people (and here), those who are in the prime of their working lives. Where is the new funding in the Budget to tackle the big preventable diseases caused by structural determinants of health, environmental factors, including corporate influences?

Everyone knows that prevention is better than cure, but the government continually ignores this as we face massive problems with obesity, diabetes, cancer and alcohol-related injury. The National Preventive Strategy (NPHS) calls for an investment in preventive health of 5% of total health expenditure across federal and state governments by 2030. We currently fall well short of this. The Australian Institute of Health and Welfare health expenditure reports consistently estimate public and preventive health investment at less than 2% of total health spend, and lower than other nations like the UK, Canada and New Zealand. The Budget’s allocation of $30.1 million for the NPHS represents tokenism.

With high national debt on the back of emergency pandemic spending, defence, aged care, and National Disability Insurance Scheme spending commitments, the government has missed the opportunity to raise revenue through big-ticket alcohol and sugar-sweetened beverage taxes that target major corporate determinants of health. These measures are the low hanging fruits of taxation, are supported in Australian communities and are implemented in more than 50 countries around the world. Increasing the price of sugar-sweetened and alcoholic beverages is a win-win for government, effectively raising revenue and improving health and social outcomes (here, here, and here). The largest government health expenditure for a single condition is $5 billion for dental caries, largely contributed by consumption of sugary drinks.

Counting the costs of inaction

The National Health Survey for 2017–18 reports that two-thirds (67.0%) of Australians are overweight or obese, and around one-quarter (24.9%) of children aged 5–17 years are overweight or obese. From a health perspective, these figures mean that a large proportion of the population is at heightened risk of chronic diseases, including cardiovascular disease, type 2 diabetes and some cancers. In 2021, the Australian Medical Association estimated that:

“… if no action is taken to stem the obesity crisis, by 2025 taxpayers will have footed a further $29.5 billion  (over four years [to 2024–25]) for the direct healthcare costs of obesity.”

The federal government has again missed an opportunity to make important structural health system improvements and for expanded multisectoral preventive health action. This has occurred despite launching the NPHS in December 2021, a blueprint for addressing Australia’s health and preventing the onslaught of chronic disease costs and burdens. Australia must not continue to fail to invest in preventive health to achieve a healthier population while also protecting our health system and workforce.

Associate Professor Louisa Gordon is a health economist and Group Leader of Health Economics at QIMR Berghofer. She is also affiliated with Queensland University of Technology, and the University of Queensland.

Terry Slevin is the Chief Executive Officer of the Public Health Association of Australia. He is also affiliated with Australian National University, College of Health and Medicine and Curtin University, National Drug Research Institute.

Malcolm Baalman is a Senior Policy Officer with the Public Health Association of Australia.




The statements or opinions expressed in this article reflect the views of the authors and do not represent the official policy of the AMA, the MJA or InSight+ unless so stated.

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