Reaping broader economic
benefits from an effective
healthcare system:
A visual lens
Canberra Health Summit: 24 July 2019
Presented by
Michael BrennanChair
2
The cost of waiting - $900 million annually
1% of the NSW population account for
46% of hospital bed days
75% of Australians over 75 years have
inadequate health literacy
66% of obese Australians have no
discussion with their GP about their
weight
Take up of computers- 96% of GPs but
22% of surgeons
Economic impacts – the mechanisms
3
Participation
Employment
Hours worked
Skill formation
Productivity
GDP per capita
Innovation
Displaced
resources
Dynamic effects
Healthcare system
Incentive
effects
Australia gets fairly good outcomes for its spending
Source: http://stats.oecd.org/Index.aspx?DataSetCode=SHA
74
76
78
80
82
84
86
4 6 8 10 12 14 16 18
Lif
e e
xp
ec
tan
cy (
ye
ars
)
Health spending to GDP (%)
Australia
US
Australia’s principal health challenge is
managing chronic illness
Selected condition Number of
Australians
2017-18
Share of Australian
population
Diabetes 1.2 million 4.9%
Mental and behavioural
problems4.8 million 20.1%
Chronic obstructive
pulmonary disease0.6 million 2.5%
Heart, stroke and
vascular disease1.2 million 4.8%
Source: ABS, National Health Survey: First Results, 2017–18 —Australia, Cat. No. 4364
Time is not a great healer
6Source: ABS, National Health Survey: First Results, 2017–18 —Australia, Cat. No. 4364
4
22
3
18
3
11
2
13
2
7
0
5
10
15
20
25
15-44 45-64
Sh
are
wit
h 3
or
mo
re c
hro
nic
co
nd
itio
ns (
%)
First quintile Second quintile Third quintile Fourth quintile Fifth quintile
15-44 year olds
45-64 year olds
Ill-health is relatively enduring in Australia
7Source: WHO data
6
6.5
7
7.5
8
8.5
9
9.5
10S
love
nia
Au
str
alia
Cze
ck R
ep
Sw
ed
en
US
Lu
xe
mb
ou
rg
Ca
na
da
Fin
lan
d
Tu
rke
y
No
rwa
y
Ko
rea
Sw
itze
rla
nd
UK
Ne
the
rla
nd
s
Ne
w Z
ea
lan
d
Ice
lan
d
Ire
lan
d
Be
lgiu
m
Ch
ile
De
nm
ark
Isra
el
Au
str
ia
Ge
rma
ny
Ita
ly
Ja
pa
n
Slo
va
kia
Esto
nia
Po
lan
d
Fra
nce
Po
rtu
ga
l
Gre
ece
Hu
ng
ary
Me
xic
o
Sp
ain
La
tvia
Sin
ga
po
re
Ma
le y
ea
rs s
pe
nt
in i
ll-h
ea
lth
20
16
The share of life spent in ill-health is rising
8Source: WHO data
11
11.1
11.2
11.3
11.4
2000 2002 2004 2006 2008 2010 2012 2014 2016
Sh
are
of
life
ex
pe
cta
nc
y s
pe
nt
in
ill-
he
alt
h (
%)
What causes the most premature death?
9Source: www.healthdata.org/australia
What causes the most disability?
10Source: www.healthdata.org/australia
Bad for labour force
participation
Bad for
unemployment
Poor health – lower participation and higher
unemployment
11
88.0
74.3
45.2
68.6
40.7
20.3
0
20
40
60
80
GOOD OR BETTER
FAIR POOR
3.6
12.2
24.5
2.4
4.4 4.1
0
10
20
GOOD OR BETTER
FAIR POOR
25-49 years old
50-69 years old
25-49 years old
50-69 years old
Source: ABS General Social Survey 2014
People in poorer health tend to work fewer hours
Source: ABS Survey of Disability and Carers, 1998-2015
27.1
31.5
43.9
33.234.7
46.9
25
35
45
GOOD OR BETTER FAIR POOR
Pa
rt-t
ime
sh
are
of a
ll w
ork
(%
)
25-49 yrs
50-69 yrs
The labour force participation ‘deficit’ of disease
12.5
15.6
12.3
19.0
39.4
28.7
45.7
39.8
19.4
40.5
40.6
18.4
0 20 40 60
Arthritis
Cancer
Diabetes
Heart Disease
Stroke
Kidney Disease
Osteoporosis
Emphysema
Depression
Behavioural/emotional
Alcohol/drugs
Anxious/nervous
Percentage points
30.9
26.4
27.1
23.7
54.1
31.8
37.8
52.4
35.2
43.8
59.3
32.3
0 20 40 60
Percentage points
55-64 yrs25-54 yrs
Source: ABS, General Social Survey, June 2014, Tablebuilder data extraction
Disability also produces bad labour market outcomes
14
Source: ABS, Disability, Ageing and Carers, Australia: Summary of Findings, 2015, Cat. No. 4430 Table 20 (15-64 year olds)
Participation rate Unemployment rate
Profound/severe core
activity limitation25.0 14.5
Moderate core activity
limitation47.4 7.7
Mild core activity limitation 58.9 8.3
Schooling/employment
restriction45.0 12.1
No disability 83.2 5.1
Of those employed, disability reduces hours worked
15
Source: ABS, Disability, Ageing and Carers, Australia: Summary of Findings, 2015, Cat. No. 4430 Table 20, (15-64 year olds)
63.2
47.844.4
53.1
31.8
0
20
40
60
80
Profound or Severe core
activity limitation
Moderate core activity
limitation
Mild core activity
limitation
Schooling or employment restriction
No reported disability
Sh
are
of
job
ho
lde
rs w
ork
ing
pa
rt t
ime
(%
)
The impacts of psychological disability
16
Employment restriction and
psychological disability
No reported disability
52.5%
83.2%
Participation
rates
Source: ABS, Disability, Ageing and Carers, Australia: Summary of Findings, 2015, Cat. No. 4430 Table 20, (15-64 year olds)
28.9%
Employment restriction and
other disability
Not in the labour force Unemployed
Labour markets are increasingly unreceptive to
disability
Re
lative
ris
k o
f th
ose
with
cf
tho
se
with
ou
t a
dis
ab
ility
1.95
2.35
2.41
2.662.70
2.77
1.9
2.1
2.3
2.5
2.7
2.9
1993 1998 2003 2009 2012 2015
1.48 1.47
1.72
1.53
1.92
1.89
1.4
1.6
1.8
2.0
1993 1998 2003 2009 2012 2015
Source: ABS Survey of Disability and Carers, 1998-2015
Other aspects of labour market experience are equally
negative
Higher absenteeism - people with disabilities or long-
term illnesses take 50% more sick days
People in very good health earn an hourly wage 18%higher than those in poor or fair health
46.3% of early retirements due to
sickness/injury/disability and a further 8% due to caring
Poor health in the previous year increases retirement
probabilities by 4.1% in the next year
People with poor mental health and disabilities much
more likely to be on enduring welfare
Premature preventable death is the ultimate loss to an
economy
Labour market outcomes for carers
19
Primary carer
Not a carer
56.3%
80.3%
Participation rate
42.7%
11.3%
Main source of income is social transfers
Source: ABS, Disability, Ageing and Carers, Australia: Summary of Findings, 2015, Cat. No. 4430 Table 40, 15-64 years
Indirect effects
20
Displaced
resources
Health spending in 2016-17 was $181 billion
10.3% of GDP
Incentive
effects
Funding system does not encourage wellness
or sustaining work
Financing budget creates its own resource
costs (could be around 45 billion annually)
The scope for policy reform
21
• Evidence-based technological developments in
health produce dividends
Death and labour market activity are incompatible
bedfellows, but there is good news …
Source: ABS Australian Historical Population Statistics, 2019, Cat. No. , 3105.0.65.001 (Mortality rate is Probability of dying between exact age x and exact age x+1 (qx), males, Australia, 1881 onwards)
0.000
0.005
0.010
0.015
0.020
0.025
0.030
0.035
1886 1906 1926 1946 1966 1986 2006
Ma
le a
ge
-sp
ec
ific
mo
rta
lity
ra
te
60 years
50 years
40 years
20 years
The likelihood of dying for a 60 year old
male in 2016 is the same as a 20 year
old in 1886
The scope for policy reform
23
• Evidence-based technological developments in
health produce dividends
• Preventative strategies have a lot of scope
Reduced smoking rates – a great success story
24Source: https://data.oecd.org/healthrisk/daily-smokers.htm
43
12.40
10
20
30
40
50
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Da
ily s
mo
kin
g r
ate
1
5+
(%
)
0
10
20
30
40
50M
EX
ICE
SW
E
US
Ind
ia
CA
N
NO
R
AU
S
NZ
L
FIN
LU
X
NL
D
PR
T
DN
K
ISR
IRL
UK
Sp
ain
KO
R
JP
N
CZ
E
DE
U
SV
N
Sw
itz
ITA
LT
U
Sp
ain
FR
A
PO
L
SV
K
LV
A
AU
T
CH
L
Ch
ina
HU
N
Tu
rkey
Gre
ece
Ru
ssia
Ind
on
Sm
ok
ing
ra
tes
15
+ (
%)
Road fatality rates, 1925-2018
25Source: BITRE
0
5
10
15
20
25
30
35
1925 1935 1945 1955 1965 1975 1985 1995 2005 2015
Ro
ad
fa
tali
tie
s p
er
10
0,0
00
pe
op
le
What risk factors drive the most death and disability
combined?
26Source: www.healthdata.org/australia
Country risk factors are clearly at work
27Source: OECDStat 2019
30
.43
4.8
0
10
20
30
40
50
60
70
80
Sh
are
of
ad
ult
po
pu
lati
on
(%
)
Obesity Overweight
Mental health concerns are rising
28Source: AIHW 2019
4.2 million people received mental
health-related prescriptions in 2017-18
$9.1 billion was spent on mental health
in 2016-17
260 000 overnight hospital separations in
2016-17
45% of Australians will have a common
mental disorder in their lifetime
What goes up, can come down
Source: Foreman et al 2018, Forecasting life expectancy, years of life lost, and all-cause and cause-specific mortality for 250 causes of death: reference and alternative scenarios for 2016–40 for 195 countries and territories
Environmental risk drivers vary with income
30Source: ABS, National Health Survey: First Results, 2017–18 —Australia, Cat. No. 4364,Table 6
22
17
14
10
7
0
10
20
First quintile Second quintile Third quintile Fourth quintile Fifth quintile
Sh
are
da
ily s
mo
ke
rs (
%)
The scope for policy reform
31
• Evidence-based technological developments in
health produce dividends
• Preventative strategies have a lot of scope
• Fill gaps in under-provision
The scope for policy reform
32
• Evidence-based technological developments in
health produce dividends
• Preventative strategies have a lot of scope
• Fill gaps in under-provision
• A patient-centred integrated health system
produces better outcomes inside and outside the
healthcare system
33
The essential ingredients of integrated care …
Person-centred
• Clinical mindsets
• Health literacy
• Knowledge
• Self-management
• Choice
• Shared decisions
34
The essential ingredients of integrated care …
Seamless lifetime
care• Thick linkages (within and
without the health system)
• Clinical team ethos
• Proper incentives
• Preventative health
• Data
• Accountability
• Time and money
35
The essential ingredients of integrated care …
Dynamic
efficiency
• Innovation
• Learning & diffusion
36
The essential ingredients of integrated care …
Outcomes
• Better Health
• Quality of lives
• Patient empowerment
• More efficient health system
• Potential savings
• Broader economic benefits
The scope for policy reform
37
• Evidence-based technological developments in
health produce dividends
• Preventative strategies have a lot of scope
• Fill gaps in under-provision
• A patient-centred integrated health system
produces better outcomes inside and outside the
healthcare system
• Improve labour market involvement of people with
disabilities
A broad policy perspective
38
• Productivity matters to the health industry
• Health matters for economy-wide productivity
• Think broadly not narrowly
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