Tackle tomorrow’s healthcare challenge now, business warns
People are turning 80 in record numbers, meaning the challenges of an ageing population have already arrived. Our healthcare system must quickly reorient to treating their chronic conditions, business says.
Boosting preventative health spending to 5 per cent of all health expenditure by 2030, tripling research and development investment and putting patients in control of their healthcare choices sit at the heart of a new business-led push for national health reform.
The health blueprint proposed by the Business Council of Australia also calls for an end to the inefficient silos that have historically plagued the health system, often as a result of state-federal demarcations, and it urges change to help harness innovation and technology, including AI, to drive productivity gains.
These gains can aid a healthcare system already under significant financial strain, as evidenced by the rancorous and still unresolved state-federal battle over a hospital funding deal, and the struggle for many older Australians to access in-home or residential aged care.
In an exclusive panel discussion with The Australian, key BCA members outlined a future health system they say can better tackle tomorrow’s problems rather than yesterday’s – primarily a rapidly ageing population living with more chronic disease.
The shifting demographic and underfunding has created a “burning platform” for action in healthcare, said Rohan Mead, group managing director of Australian Unity and chair of the BCA’s health and care services CEO committee.
Mr Mead cited hospital ramping, long wait times for elective surgery in public hospitals, inadequate access to bulk-billing GPs, and the thousands of older Australians in hospital waiting for an aged-care bed as evidence of the present system’s struggles.
“We have had great success at dealing with the acute and infectious history of disease and injury. Some 80 per cent of cancers are now chronic, manageable diseases rather than death sentences,” Mr Mead said.
“But we have become victims of that success because we now have a world where disease has hugely shifted towards being chronic. The burden of disease is … in large proportion in the increasingly frail and vulnerable communities of the aged.”
Helping Australians live longer with fewer chronic conditions benefits both individuals and national productivity, the BCA blueprint, Supporting a Healthy and Productive Nation, says. Preventative health care is part of the answer, but investment is undercooked.
“In 2023, preventative care accounted for only 3 per cent of health expenditure, a stark contrast to Indonesia’s 18 per cent and the OECD average of 5 per cent,” it says.
“We suggest all governments aim to increase health expenditure for preventative health measures to 5 per cent by 2030.
“Governments should target investment in preventive measures with a particular focus on leading causes of disease, including mental health, cardiovascular disease and obesity.”
Panel participant Jamie MacLennan, Telus Health senior vice-president and managing director Asia-Pacific, said his organisation had conducted post-Covid research to show younger workers between 20 and 39, while not at a critical point in dealing with poor mental health such as being hospitalised, were nevertheless struggling.
“(It’s) that missing middle, if we focused on preventative care, stopping people deteriorating (and) ending up in hospital, it would be a lot more effective,” Mr MacLennan said.
Another way to drive improvement for the care and treatment of chronic conditions was to speed up the pace for new products making it to market, Sanofi Australia chief executive officer Liz Selby said, noting that the average time for a new therapy to move from registration by the Therapeutic Goods Administration into the market was 466 days, much longer than in other countries.
More broadly, the BCA health blueprint outlines the scale of the health challenge. It notes that while in the past two decades the average number of Australians turning 80 each year was 20,000, for the next 20 years it will be 60,000 a year.
In terms of delivering the tax revenue to fund the care needed, it says the number of working-age Australians per retiree will fall from four to fewer than three within 40 years.
And there will be a shortage of about 80,000 nurses by 2035, in just a decade’s time.
Already this demographic pressure is on. Health spending in Australia from all sources – federal, state and private – ran to more than $250bn in 2022-23. Between 2011-12 and 2023-24 federal government spending alone on health, aged care and the NDIS increased from $70bn to $184bn.
The federal and state governments continue to haggle over future hospital funding arrangements, with the states raising concerns the Albanese government is walking back a commitment made in 2023 to fund 42.5 per cent of hospital costs, despite the commonwealth putting a further $20bn over five years on the table on top of that agreement.
Among its 140 action items, the BCA is calling for the Productivity Commission to conduct a whole-of-system economic analysis of healthcare funding, but also offers more targeted proposals.
One is a greater focus by governments on facilitating “hospital-in-the-home”, where patients are supported to recover in their own residence. Another is to incentivise “virtual health” through telehealth services and remote monitoring.
It also calls for more spending on research and development, with health a particular focus.
“In Australia, business expenditure on R&D was more than $24bn in 2023-24 which is about 0.9 per cent of GDP,” it says. “More specifically, the proportion of health spending on research was 2.9 per cent in 2022-23.
“The Australian government should commit to increasing R&D spend, with an aspirational goal of 3 per cent of GDP.”
Ms Selby said Australia was “absolutely recognised as punching above our weight when it comes to research and development”, with our scientists and academics over-represented on the international stage.
She pointed to a $280m collaboration between Sanofi, the Queensland government and both the University of Queensland and Griffith University to create a science hub driving vaccine development.
“They are already working now in the vaccines, mRNA space … and we have clinical trials under way for the first time ever in chlamydia,” Ms Selby said. “We need to clear the boundaries (and) lower the bureaucracy to be able to bring these collaborations together.”
Helping consumers choose their best healthcare path required greater transparency, something that was gravely missing at the moment, Mr Mead said, as patients were forced to navigate a fragmented system.
“Everyone claims the patient, but when you ask the radiologist and the surgeon and the geriatrician whose patient it is, they look at each other,” he said.
The state-federal system is an impediment to this, with cost and blame-shifting rife, at the expense of consumer outcomes.
Mr Mead offered the example of a patient coming out of hospital after heart surgery, and needing beta blockers as part of their post-operative care. The hospital has an incentive to give a patient a script for the drugs to fill after they leave hospital, he said, rather than providing a course of drugs from the hospital itself, with the cost then shifted from the state to the commonwealth.
“Two budgets, state and federal. It is in my interest as a hospital to write you a script that the feds pay for when you leave. So the danger is that you leave not sufficiently provided with a treatment pathway (and) have to go and self-provide. You may be old, you may be of a non-English speaking background. All sorts of things could intervene in the effectiveness of your adherence to the treatment pathway,” he said.
Part of the answer to putting patients in control of their healthcare is bolstering health literacy and engaging them earlier in the process.
“Low health literacy can significantly drain human and financial resources and may be associated with 3-5 per cent of extra costs to the health system,” the report says.
The BCA blueprint offers a number of other practical actions to deliver better healthcare, including for the federal government to incentivise the states, through the National Health Reform Agreement, to use private sector capacity for those waiting longer than the clinically approved wait time for elective surgery.
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