Apr 23, 2013

The rise and rise of health spending — but don’t blame the old people

Health spending and health employment are surging in Australia. But it's not inevitable, as the experience of other countries shows. And it's not necessarily being driven by the ageing population.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

It’s Australia’s fastest-growing industry by employment, rivalled only by our burgeoning services sector and the mining industry. It’s the biggest single employer of Australians, with one in eight of us working in it. And it shows no signs of slowing down. Right now, nearly 1.4 million Australians work in the health and social care sector. On current rates of growth, before the decade is out, one in seven of us will be in the sector.

As the Grattan Institute pointed out yesterday in its look at Australian government budgets, rapidly growing healthcare spending is putting significant pressure on budgets. But the rapidly growing health workforce has big implications for the rest of the economy. Where will we get the doctors, nurses, dentists and physios of tomorrow? What pressures will that place elsewhere? These are the sorts of issues the Commonwealth has an entire division within the Department of Health set up to deal with (Melissa Sweet at Croakey has looked at these issues).

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20 thoughts on “The rise and rise of health spending — but don’t blame the old people

  1. gapot

    This public funding of health care is an invitation to all involved to health industry to grab as much money from the honey pot as possible by what ever means they can come up with. The main culprits are the health insurers, who pocket huge amounts mandated by government. When the Howard government came up with private health insurance rebates the flood gates to easy money which was a gift and which needs to be investigated by the corruption watch dog.

  2. negativegearmiddleclasswelfarenow.com

    The Grattan Institute – I’m waiting for this mob to address the issues involved in following question:

    How long can Australia afford to tolerate the spectacle of, as in the small township of Dimboola, two schools both taxpayer funded?

    The Grattan Institute serves those who fund it. Views on public policy are framed by that service so I may be waiting a while.

  3. Mark Duffett

    The obvious question this raises – how do health outcomes in Canada compare to Australia?

  4. David Hand

    It’s fear of the health minister at the time being asked by Tracy Grimshaw, “What do you say to the family of Joe Bloggsworth, who died from a medical stuff up that the nurses and doctors unions say was contributed to by your drive for efficiency in health spending? And what do you say to his 9 year old son who is live in the studio with me?”

  5. Achmed

    A locum doctor at a regional hospital gets paid $2000 per day plus a govt car, mobile phone free flights to metro and free rent

  6. Frank Birchall

    It’s worth keeping in mind that the “% of total employment” graph is measuring relative shares, so Healthcare’s share growth can be accentuated by absolute decline in other categories such as Manufacturing. It would be good to see Healthcare raw numbers over the same period.

  7. Suzanne Beckinsale

    Most Canadians don’t drink and smoke. They practise yoga twice a day, live in teepee and eat natural food that they hunt and gather. The bars and nightclubs only serve herbal tea so there is no violent alcohol related incident.

    Go Canada!

  8. Shaniq'ua Shardonn'ay

    I wonder how many of the people in health care actually work in health as opposed to the non-evidence based service industries (naturopaths, acupuncturists, chiropractors, massage therapists etc).The former would probably cost the government whilst the latter just bump-up insurance premiums. I’ve noticed a lot of people going into these industries which aren’t exactly vital but pretty costly. I bet all of the above put ‘Health’ down on the ABS form, and actually believe that’s what they do.

  9. michael crook

    Would have thought that something so important would have elicited more comments. Hope you all saw the Deloitte Access Economics report for the Butterfly Foundation that came out before Christmas, it might even have got a run in Crikey, dont remember. Anyway the social economic and health costs of the 913,986 Australians diagnosed with severe eating disorders in 2011 was estimated at $69.7 Billion, yes thats billion. This was more than thirtyfold increase since 2001 and included 214,000 australians with morbid obesity. Now, they did not draw this conclusion but I do, that the increase in eating disorders closely parallels the increase in soft drink consumption, the increase in junk food marketing to children, and the increase in low nutrient and monoculture foods in our supermarkets. Our food is unregulated and the food corporations are effectively unregulated and allowed to dish up whatever poison they wish, and it is making us, as a nation, very unwell.

  10. Scott

    Health outcomes are a lot better in Australia as opposed to Canada and we do it for around 26% less expenditure. The reason….we have a better private health care system that improves efficiency and reduces costs. The benefits of a profit driven system.
    But even with those efficiencies, or maybe because of them, we still have more front line health care workers which reduce wait times and improve care. I don’t think we should try to emulate inferior systems. They can learn from us, not the other way around.

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