reaping broader economic benefits from an effective ... · unemployment poor health ... activity...

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?


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


23



• 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?


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 (

%)


31




• Fill gaps in under-provision


32





• 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


Seamless lifetime

care• Thick linkages (within and

without the health system)

• Clinical team ethos

• Proper incentives

• Preventative health

• Data

• Accountability

• Time and money

35


Dynamic

efficiency

• Innovation

• Learning & diffusion

36


Outcomes

• Better Health

• Quality of lives

• Patient empowerment

• More efficient health system

• Potential savings

• Broader economic benefits


37





• 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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