Transcript Document

Economics and Health –
A Macro View
Tasmanian Health Conference 2014
Martin Hensher
Director Strategic Planning – DHHS
Adjunct Associate Professor – UTAS School of Medicine
LITERACY RATES
AGEING POPULATION
OBESITY
CHRONIC DISEASES
POVERTY
UNEMPLOYMENT
HIGH BURDEN OF DISEASE
HEALTH CARE COST INFLATION
Gross Domestic Product
Source: Australian Government, Department of Health 2014 (OECD data)
…and Total Health Expenditure consistently
grows faster than GDP
What factors drive that increasing spend?
USA
Australia
Canada
Canada - cost driver shares of average annual growth
in public health spending, 1998 - 2008
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
Other
General Inflation
Ageing
Population Growth
1.0%
0.0%
Source: Canadian Institute for Health Information
Source: Grattan Institute
Is this sustainable?
Source: King’s Fund 2014 A new settlement for heath and social care (p33)
Unsustainable and unaffordable?
• In the long run, rising expenditure on health care is not
in itself a problem
• A growing economy will sustain health care’s growing
share as long as additional health care is adding value
to society
• And the key driver of increasing health expenditure
and costs – technology and innovation – is itself a
critical driver of economic growth
• Indeed, health care is arguably the very essence of the
service economy of the future that nations like
Australia must embrace (c.f. Stiglitz)
John Maynard Keynes
1883 - 1946
“The long run is a
misleading guide to
current affairs. In the
long run we are all dead.”
What might get in the way?
• Future economic growth prospects
• Short to medium term fiscal challenges
• Health sector efficiency
Growth Prospects?
• But if the economy is not growing (or growing
slowly), then the growth in health expenditure
we are accustomed to will be much harder to
finance…
• And that is when things start to feel
uncomfortable right now, not in 30 years’
time…
Post-GFC Emergency Braking: From >4% Growth to Zero
Average health expenditure growth rates across OECD countries, 2000-2010
Source: Morgan and Astolfi, OECD 2013
Emerging Macroeconomic Concerns
• Recognition of rising income inequality over the last 30 years (made worse
by the GFC) – and that income inequality retards overall growth
• Evidence beginning to show “austerity” makes things worse
• Fears that the causes of the GFC are far from played out (e.g. China’s
shadow banking sector)
• Fears that the ending of stimulus and quantitative easing could take the
steam out of the world economy very quickly
• Concerns from serious economists that we are now in a new era of longrun growth at rates well below the (recent) historical trend
– Stiglitz – long-term adjustment
– Summers – “secular stagnation”
– Gordon – “six headwinds”
• So, economic growth may not go back to “normal”, which would mean
health expenditure growth could not go back to “normal” either
Fiscal and Policy Challenges
• Federal Budget 2014 poses significant
challenges for health system especially:
– Changes to funding agreements with states and
territories
– GP Co-payment
• And policy uncertainty while negotiation
around the Federal Budget continues
• Potential changes to Federation and taxation
arrangements in coming years?
Source: ABC FactCheck http://www.abc.net.au/news/2014-06-23/has-hospital-funding-been-cut-by-50-billion-fact-check/5486988
Where does this leave Tasmania?
Recurrent Health Expenditure Per Capita
(Public and Private), 2011-12
6000
5881
5823
Australia
Tasmania
5000
$ per cpaita
4000
3000
2000
1000
0
• We spent (for the latest year figures are available) very close to the
national average on health care (public and private)
But that equivalent spend represents a far bigger
share of our State’s economy
Recurrent Health Expenditure
as % GDP / GSP, 2011-12
14.0%
Persons Employed in Health and Social
Care as % all Persons Employed, May 2014
14.0%
13.2%
12.2%
12.0%
% GDP
10.0%
12.0%
11.9%
10.0%
9.0%
8.0%
8.0%
6.0%
6.0%
4.0%
4.0%
2.0%
2.0%
0.0%
Australia
Tasmania
0.0%
Australia
Tasmania
Implications
• So the feedback from health spending to the
wider Tasmanian economy is proportionately
more important
• And more sensitive to significant funding
shocks
• And more reliant on federal funding, with a
weaker state revenue base
What is our current trajectory?
Emergency Department Presentations, 2008-09 to 2013-14
150,000
Number of presentations
145,000
140,000
135,000
130,000
125,000
120,000
AIHW
FYI
2008-09
2009-10
2010-11
2011-12
2012-13
130,108
141,630
143,848
141,700
147,064
141,916
143,824
141,518
147,065
2013-14
148,407
What is our current trajectory?
Tasmanian Public Hospitals: Inpatient Activity, 2008–09 to 2013–14
140,000
120,000
Number of Separations
100,000
80,000
60,000
40,000
20,000
0
AIHW
FYI
2008–09
2009–10
2010–11
2011–12
2012–13
94,892
101,673
99,333
99,632
106,358
100,798
100,435
99,807
106,865
2013-14
115,654
Number of separations/occassions of service
What is our current trajectory?
Tasmanian Public Hospitals: Admitted and non-admitted activity, 2010-11 to
2012-13
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2010-11
2011-12
2012-13
Non-admitted
388,657
349,321
322,545
Admitted
99,333
99,632
106,358
What can we do about this?
• Make sure we do the right
things
• Stop doing the wrong
things
• So that resources are used
to maximise benefit
• Not wasted on care that
brings minimal benefit
• Or even on care that
actively causes harm
Improving what we do
• Focus on cost-effective care across the whole system:
– Are our interventions and procedures the right ones, given the
available evidence on costs and effectiveness?
• Reduce overdiagnosis and overtreatment:
– Do we use only the right technologies (those with proven benefits) on
the right patients (only in those populations for whom the benefits are
proven)
• Improve outcomes and reduce waste by minimising avoidable
patient harms
And improving how we do it…
•
But
Deliver care in the most cost-effective place (both its setting
and its geographical location):
– Alternatives to hospital for high volume / low complexity cases
– Appropriate centralisation of low volume / high complexity services (if
necessary interstate or in partnership with private sector)
• Manage the patient’s journey effectively – active
management of patient flow (referral pathways, admission
and discharge planning, scheduling, theatre and resource
utilisation etc.)
• Which both require better integration of care and services,
and systematic clinical and process redesign
• Use information resources more effectively to shape and
deliver care – both strategically and day-to-day
Do we have the courage to:
• Start with the evidence, rather than our history and past
disappointments?
• Use the data effectively instead of disputing it?
• Collaborate and share risks (and benefits)?
• Individually and corporately engage to make evidence-based
change real – through Clinical Advisory Groups?