Viw Magazine


  • Written by Stephen Duckett, Director, Health Program, Grattan Institute
imageThe latest snapshot of Australian health funding reveals who's footing the bill, among other worrying health statistics.from

New health minister Greg Hunt probably choked over his breakfast cereal this morning as he read the blandly titled Report on Government Services 2017, released by the Productivity Commission today.

As if he did not have enough on his plate pondering the Medicare rebate freeze, which hits the poor and sickest the most, the future of private health insurance and the long-term fate of public hospital funding, the report puts another difficult set of issues onto his desk.

Australia performs relatively well in health when compared to other countries. But those data are about averages and broad measures.

When you dig down into the data, the report reveals serious problems, notably in the areas of out-of-pocket health expenses, potentially avoidable early deaths, Indigenous health and state-by-state differences in health outcomes.

The markers of a good health system

The Productivity Commission report, which is prepared with the help of Commonwealth and state and territory governments, identifies the desired outcomes of the health system as:

  • Australians are born and remain healthy
  • receive appropriate high quality and affordable primary and community health services
  • receive appropriate high quality and affordable hospital and hospital-related care
  • have positive health care experiences that take account of individual circumstances and care needs
  • have a health system that promotes social inclusion and reduces disadvantage, especially for Aboriginal and Torres Strait Islander people
  • have a sustainable health system.

The report includes data on most of those outcomes, sometimes with adequate time series to track progress (or lack of progress), sometimes with state/territory level breakdowns and sometimes allowing comparisons of outcomes for Indigenous and non-Indigenous Australians.

These comparisons reveal serious policy issues the health minister would probably have preferred to avoid.

Out-of-pocket costs

Australians pay more out-of-pocket for health care than many countries, resulting in access problems for a substantial minority. Drawing on previously released data from the Australian Institute of Health and Welfare, the report shows funding from non-government sources (mostly out-of-pocket costs) increased four-and-a-half times faster than government funding (6% vs 1.3%).

The increased out-of-pockets are a concern, affecting the costs faced by consumers in seeing both private specialists and general practitioners.

Potentially avoidable early deaths

A key measure of health system performance is whether it improves our health and allows us to live longer in good health. While the report does not include some important outcome measures, such as whether consumer expectations are being met, it does report on what is happening with death rates, particularly death rates that health care interventions or preventive action could influence.

Despite all the hype about the benefits of investing in medical research, standardised rates for potentially avoidable early deaths have been unchanged for the past few years.

This raises questions about whether our medical research funding is wisely invested, if more should be done on preventive health care and if new treatments with proven benefits are being implemented across all health care settings.

Indigenous health

This report is yet another one to shine light on the tragedy of Indigenous health. In table after table in the report we see the stark differences in the outcomes for Indigenous compared to non-Indigenous Australians.

The challenge of improving Indigenous health is immense. But this report puts it well and truly on the agenda of health minister Hunt and the new Indigenous health minister Ken Wyatt.

State comparisons

The report also allows comparisons between states. Australia’s marble cake federalism (a term used to describe multiple layers of government) means it is difficult to assign responsibility to one level of government and one minister for poor outcomes. This means health ministers in a number of states may have a spoiled breakfast too.

The Tasmanian health minister might want to ponder why there are more low birth-weight babies born in Tasmania compared to other states (rate for <1,500g is 1.3% in Tasmania vs 1% for all Australia, 7.7% vs 6.4% for <2,500g).

The Victorian health minister might ponder why 51% of young male Victorians (aged 18-24) are overweight or obese compared to an Australian prevalence of 44%.

The Queensland health minister might want to reflect on why more non-Indigenous Queenslanders smoke (using age-sex standardised rates) than the Australian average (17% vs 16%).

In South Australia, the health minister might ask why there are ten more potentially avoidable deaths per 100,000 population than in Western Australia (non-Indigenous population only).

A treasure trove

The Productivity Commission’s report is a treasure trove of information. A similar report has been published every year for the past 20 years but, unfortunately, shining light on these differences among states and between Indigenous and non-Indigenous Australians has not led to a narrowing of differences.

The relevant ministers need to take ownership of the problems raised in the report and start addressing them rather than wringing hands, or worse, ignoring or denying them.

Minister Hunt should table the report at the next health ministers’ meeting, focusing on where each state could make improvements.

Accountability for outcomes may also require the Productivity Commission to be more direct in its media strategy when the report is released. Non-government organisations have a role to play too, bringing to the public’s attention where there is scope for improvement.

It will be a tragedy if we allow these very comprehensive – and quite expensive – reports just to moulder on shelves rather than addressing the issues identified.

Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and Grattan uses the income to pursue its activities Stephen Duckett is a member of the South Australian Health Performance Council. Dr Duckett does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the appointment above.

Authors: Stephen Duckett, Director, Health Program, Grattan Institute

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