laurie brown - university of canberra - macro-economic outlook for the australian health system
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Macro-Economic Outlook for the Australian Health System
Professor Laurie Brown
Future of Health Policy Reform Summit
26 – 27 October 2015
ParkRoyal Darling Harbour, Sydney
(CR
ICO
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002
12K
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Questions
• To what extent have healthcare costs of health services risen over the last decade?
• What have the trends in Australian Government expenditure on health been since 2004 under different political parties and leaders?
• To what extent do we want to share the cost of health care - can we maintain universal healthcare in Australia today?
• Has the Australian Government given less to the States and Territories for health under the Abbott Liberal Government?
• Can we improve health without increasing health spending?
(CR
ICO
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12K
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Change in expenditure
A change from one year to another in expenditure, at current prices, can result from • changes in prices (inflation) of health goods and services• a growth in utilisation (volume), or • a combination of both
Volume is affected by• the population’s age structure• changes in the overall and relative intensity of use of
different health goods and services• changes in technology and medical practice, and • general economic and social conditions
3
Total Healthcare Expenditure since 2004
4
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
$ m
illio
n
Year
Current Constant
Annual Growth in Costs
5
Ave. 7.7
Ave. 5.00
2
4
6
8
10
12
Pe
rce
nta
ge
Year
Current Constant
Total Health Expenditure relative to GDP
6
5
6
7
8
9
10
Pe
rce
nta
ge
Year
Current Constant
International Comparison (Health Expenditure as % GDP)
7
0
2
4
6
8
10
12
14
16
18
Ko
rea
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nia
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ited
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and
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stri
a
Ger
man
y
Fran
ce
Swit
zerl
and
Un
ited
Sta
tes
% G
DP
OECD Country
2004 2013
International Comparison (Rank)
8
0
5
10
15
20
25
30
35
40
Ko
rea
Esto
nia
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and
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man
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Un
ited
Sta
tes
Ran
k
OECD Country
2004 2013
9
Life expectancy at age 65 years in OECD countries, 2012.
10
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
26.0
Turk
ey
Hu
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ry
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ited
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ited
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Female Male
Average Health Expenditure per Person ($)
11
0
1000
2000
3000
4000
5000
6000
7000
$ p
er p
erso
m
Year
Current Constant
Allocated Health Expenditure per person by age and sex 2008-09
12
13
14
15
16
17
Annual Rates of Inflation
18
-1
0
1
2
3
4
5
6
7
2004−05 2005−06 2006−07 2007−08 2008−09 2009−10 2010−11 2011−12 2012−13 2013-14
Rat
e o
f In
flat
ion
(%
)
Year
Health inflation General inflation
Composition of Growth in Current Prices
19
Annual Growth
Rate Inflation
Volume (real
growth)2004−05 10.3 37.6 62.42005−06 6.9 62.9 37.12006−07 9.5 37.3 62.72007−08 9.1 27.3 72.72008−09 10.5 29.5 70.52009−10 6.7 42.3 57.72010−11 7.8 8.8 91.22011−12 7.9 22.9 77.12012−13 3.8 70.1 29.92013-14 4.9 37.2 62.8
7.7 37.6 62.4Average
Total Australian Government Spending
20
Australian Government Health Spending
21
Increases in (Residual) Life Expectancy for Australians at age 65 years
22
In 2035 Australian men aged 65 years can expect to live to 87.7 years and women to 89.4 years (84.8 & 87.4 in 2015)
11.3
12.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1900 1920 1940 1960 1980 2000 2020 2040
Life
Exp
ect
ancy
(Ye
ars)
Year
Male Female
19.8
22.4
24.4
22.7
Growth of Australia’s Older Population
23
44
3329
05101520253035404550
0.0
5.0
10.0
15.0
20.0
25.0
2015 2020 2025 2030 2035 2040 2045 2050 2055
De
pR
atio
Pe
rce
nta
ge
Year
Males 65+ years Females 65+ years Males 85+ years
Females 85+ years Dep Ratio
Dep Ratio is the dependency ratio measured as the number of persons aged 15-64 years per 10 persons aged 65 years and over
Growth of Australia’s Older Population (aged 65 years and over)
24
Male(m)
Female(m)
Total (m)
Growth(%)
2015 1.662 1.906 3.568
2035 2.889 3.301 6.190 74
2055 4.016 4.518 8.534 38
25
CONCLUSIONS• Slow growth
– Inflation vs utilisation– International position
• Decreasing Australian Government expenditure
• Government remains main funder• Future challenges• Social Determinants of Health
– Across Government approaches– Joined-up approaches
26
Thank you
27
www.governanceinstitute.edu.au
References:AIHW (2015) Health Expenditure Australia 2013-14, Health
and Welfare Expenditure Series Number 54
2015 Intergenerational Report
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