Overview 

Demographic changes and advances in medical knowledge and technology will place increasing pressure on Australia’s health-care system and budgets in the future. Health-care spending in Australia totals around $86.9 billion a year, or around 9 per cent of GDP. Spending on health has grown at a faster rate than has spending in other areas and this trend is forecast to continue. As a result, the question of how best to reduce the nation’s overall health-cost burden, while making sure that the health system is run efficiently, equitably and fairly will pose a substantial challenge for the 42^nd Parliament.

With more Australians living longer, the rate of chronic disease will increase. It is also anticipated that an increased number of younger Australians will develop chronic conditions as a result of lifestyle factors such as poor diet and physical inactivity. Aboriginal and Torres Strait Islander people also continue to suffer greater rates of chronic disease and ill health than other Australians.

The current primary focus of Australia’s health system may need to be reassessed, given that chronic, largely preventable diseases are placing a significant burden on the nation’s health and economy. Traditionally, the focus of the health system has been on treating illness. While there are moves towards a more preventive, proactive approach to health care, there is potential for this approach to be enhanced.

Another significant challenge will revolve around the reform of current health-care funding and delivery arrangements. The division of responsibilities for funding and delivery of health care between the Commonwealth and the states is complex. There are many types and providers of services, and a range of funding and regulatory mechanisms. This division creates an environment in which there are multiple opportunities for cost-shifting, which often lead to tensions over funding responsibilities.

Negotiations for the Australian Health Care Agreements (AHCA) that fund public hospitals provide an opportunity to influence the funding and delivery of health services and improve health outcomes.

The 42^nd Parliament may be required to confront several other health issues, including:

• global issues, such as ensuring that Australia’s systems for disease surveillance, detection and treatment are sufficient to cope with a possible pandemic
• regional issues, such as the establishment of joint therapeutic products regulation in Australia and New Zealand, and
• national issues, such as the training, composition and dispersal of the health workforce, the functioning of the residential aged-care system, reform of the Pharmaceutical Benefits Scheme, dental health and the obesity epidemic.

Further detail on some of these issues is provided in the following briefs.