Chalmers’ roundtable turns into a health black hole
It appears Jim Chalmers’ productivity summit next month won’t have anyone at the table from the preventive health sector. That’s a missed opportunity.
The list of invitees for Treasurer Jim Chalmers’ economic reform roundtable next month is a who’s who of Australian industry, unions and the finance industry.
There is one important voice, though, that appears to have dropped into a fiscal black hole – that of health.
The lack of representation at the “productivity summit” from the preventive health field has raised eyebrows across the sector.
“Too often health is seen as a cost,” says Professor Anna Peeters, a globally recognised health expert and chief executive of VicHealth. “We can no longer afford to overlook the central truth – a healthy population is the foundation of national productivity.
“The productivity summit must use the opportunity to embed prevention into the nation’s productivity agenda.”
One reason health experts are voicing concern about their exclusion from the Treasurer’s summit is that the Productivity Commission has been issuing warnings about health and its effect on the national economy for years now.
Indeed, in the introduction to the most recent Intergenerational Report, released in 2023, Dr Chalmers himself noted among his priorities his intention to “invest in the care and support economy”.
Roughly 10 per cent of Australia’s GDP is devoted to health, and that will only increase over the coming years. The Intergenerational Report warns that “meeting the demand for care will require ongoing investment and improvements in delivery”.
Preventive health in Australia is low on the funding totem pole. In a paper published last year, celebrated health economist Professor Alan Shiell calculated that spending on prevention in our health system languished at less than 2 per cent.
The Productivity Commission’s report reminds us that “people aged 65 or older currently account for around 40 per cent of total Australian health expenditure, despite being about 16 per cent of the population”. That is only going to worsen.
Keeping the population healthy requires prevention. Treating established disease is hard – preventing disease in the first place is the key to keeping health costs down and Australians’ productivity high.
Professor Zanfina Ademi, a health economist at Monash University, is concerned. “Preventive care is not just about controlling costs,” she says, “it’s about making early investments to ensure individuals have the opportunity to enjoy a good quality of life and actively contribute to the nation’s productivity.
“When considering investment in Australia, the focus is often on improving healthcare efficiency. However, the government should also factor in productivity gains when making decisions about prevention and early investments.”
Professor Ademi says “the economic benefits of investing in preventive health should not be overlooked, as such investments often generate broader multisectoral benefits – such as gains in productivity and education – that extend beyond the health system.
“One example of a prevention strategy is population DNA screening for high-risk conditions in all young adults, which could result in productivity gains of $2.9bn. These are substantial benefits that should be considered by the government as part of its economic reform roundtable.”
Professor Terry Slevin, CEO of the Public Health Association of Australia, is perplexed by the decision not to have a health voice at the productivity summit.
“Our productivity and capacity to have a viable economy is built on a foundation of a healthy population. When health declines, so too does productivity, he says. “Public health is a key ingredient that must be added to the upcoming economic summit.”
The Intergenerational Report itself backs the health experts’ views. “The care and support sector will create new and meaningful jobs over the coming decades,” it reads “The policy challenge is to meet increased demand while ensuring the sustainable delivery of quality care. Funding and securing the necessary workforce will require a significant investment, and productivity improvements will be critical.”
Concerns about health funding in the US have prompted the American Medical Association to warn that “health is the greatest social capital a nation can have. Without a healthy, productive citizenship, a country can’t be economically stable.”
An article in the British Medical Journal expressed similar sentiments: “By preventing and alleviating the consequences of disability, health systems can help people have longer, more productive working lives and reduce the fiscal and social costs of dependency in older age.”
Professor Slevin agrees. “Preventable chronic disease and injury cuts down millions of us before we have made our full contribution to the community,” he says. “Paid roles, community volunteers, and those who keep families strong and productive rely on us being healthy and fit enough to do that work.
“Providing hugely expensive treatment, care and income support to people who are the victims of preventable disease and disability is the direct and societal cost side of the ledger. So big expenditure savings are possible there. But we rarely quantify their enormous and lost contribution that could have been.
“Addressing these challenges are all in the hands of our governments. Without our health we have nothing. Without a healthy population we have a crippled economy.”
