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“Social” Health Overhaul Could Save Billions - Report


Tuesday, 5th June 2012 at 10:21 am
Staff Reporter
Half a million Australians could be freed from chronic illness, $2.3 billion in annual hospital costs could be saved and the number of Pharmaceutical Benefits Scheme prescriptions could be cut by 5.3 million annually by tackling the social causes of poor health, according to a new report by Not for Profit, Catholic Health Australia.

Tuesday, 5th June 2012
at 10:21 am
Staff Reporter


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“Social” Health Overhaul Could Save Billions - Report
Tuesday, 5th June 2012 at 10:21 am

Half a million Australians could be freed from chronic illness, $2.3 billion in annual hospital costs could be saved and the number of Pharmaceutical Benefits Scheme prescriptions could be cut by 5.3 million annually by tackling the social causes of poor health, according to a new report by Not for Profit, Catholic Health Australia.

The study, The Cost of Inaction on the Social Determinants of Health, reveals avoidable chronic illness costs the Federal Government $4 billion each year in welfare payments and the national economy $8 billion in lost earnings.

Catholic Health Australia (CHA) commissioned the University of Canberra's National Centre for Social and Economic Modeling (NATSEM) to calculate savings the Federal Government could achieve if the 2008 World Health Organisation (WHO) action plan on social determinants of health was implemented.

Catholic Health Australia chief executive Martin Laverty said "The lowest 20 per cent of income earners suffer twice the amount of chronic illness than the highest 20 per cent. NATSEM's study quantifies the cost of avoidable poor health to the Australian economy.

"The WHO in 2008 detailed how countries like Australia should tackle health inequalities. Now we have evidence it makes economic sense to implement the WHO proposals. In releasing the NATSEM report, we seek a Senate Inquiry to detail how Australia can best implement the WHO's action plan," Laverty said.

“These staggering opportunities are what new approaches to health policy could achieve, yet counter-intuitively they do not require radical change to the way in which our health system operates. In fact, the opportunity to reduce chronic illness and save on hospital and pharmaceutical expenditure requires action outside of the formal health system.

“Australia suffers the effects of a major differential in the prevalence of long-term health conditions. Those who are most socio-economically disadvantaged are twice as likely to have a long-term health condition than those who are the least disadvantaged. Put another way, the most poor are twice as likely to suffer chronic illness and will die on average three years earlier than the most affluent.

“International research points to the importance of factors that determine a person’s health. This research, centred on the social determinants of health, culminated in the World Health Organisation making a series of recommendations in its 2008 Closing the Gap Within a Generation report. The recommendations of that report are yet to be fully implemented within Australia,” Laverty said.

Laverty says that the findings of The Cost of Inaction on the Social Determinants of Health suggest that if the World Health Organisation’s recommendations were adopted within Australia:

• 500,000 Australians could avoid suffering a chronic illness

• 170,000 extra Australians could enter the workforce, generating $8 billion in extra earnings

• Annual savings of $4 billion in welfare support payments could be made

• 60,000 fewer people would need to be admitted to hospital annually, resulting in savings of $2.3 billion in hospital expenditure

• 5.5 million fewer Medicare services would be needed each year, resulting in annual savings of $273 million

• 5.3 million fewer Pharmaceutical Benefit Scheme scripts would be filled each year, resulting in annual savings of $184.5 million each year

“Australia should seek the human and financial dividends suggested in The Cost of Inaction on the Social Determinants of Health by moving to adopt the World Health Organisation’s proposals. It can do so by having social inclusion agendas adopt a “health in all policies” approach to require decisions of government to consider long-term health impacts,” Laverty said.

“No one suggests a “health in all policies” approach is simple, but inaction is clearly unaffordable.”

The Minister for Social Inclusion, Mark Butler says key health experts, led by CHA, have called for the Senate Standing Committee on Community Affairs to consider the issues raised in the report.

“The Senate Standing Committee has received representations on the issue and will consider the matter for their work program for this year,” Butler said.

The Senate Committee will be able to draw on this study as well as international contributions, including those made through the World Health Organisation and the Rio Political Declaration of 2011 which confirmed Member States’ commitment to take action to address the social determinants of health. 




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