Repost: We all see our doctor too much; and it’s not just the aged. John Menadue

The media have been discussing a proposal to impose a $5 or $6 levy for GP visits. There has been a dramatic increase in the number of times we each see our GP. It needs addressing, but not with a simplistic GP levy. See also piece below by Ian McAuley.

Following the Grattan Institute’s recent work on budget deficits there was a focus by the media on rising health costs. The media commentators didn’t seriously examine the Grattan work about ageing but hopped onto an old and overworked hobbyhorse – that rising health costs are largely due to the ageing on the Australian population. The Business Council is also a repeat offender on this fiction about ageing.

Increases in health services have been across all age groups, particularly in the band 25 to 54 year olds. The following figures compare Medicare services per head and by age 1984/85-2011/12. They are extracted from the Department of Health and Ageing website, although the figures are not easy to find.  Below I have combined male and female figures, assumed a 50/50 gender split. It should also be noted that some Medicare services and items were not around in 1984/85 when Medicare was established by the Hawke Government. This would not detract from the thrust of the figures.

Medicare services per head and by age 1984/85 to 2011/12

Age group

1984-85

2011-12

% Change

0-4

6.97

8.87

27

5-9

4.25

5.04

18

10-14

3.49

5.06

45

15-19

4.68

7.59

62

20-24

6.43

8.58

34

25-34

7.05

10.78

53

35-44

6.54

12.15

86

45-54

7.99

14.75

85

55-64

9.47

20.32

115%

65-74

11.80

28.61

142%

75-84

15.22

39.08

157%

 

It is noteworthy that the rate of increase in Medicare services levelled off in the over 65s but grew very strongly in the 35-54 band. Age is only a part of the problem.

The Productivity Commission confirmed this in its report in 2005 on Medical Technology “to date population ageing does not appear to have been a major driver of increased demand for health services’.

Professor Jeff Richardson of Monash University’s Centre for Health Economics, in his paper on the ‘Lamentable state of Australian health reform’ in March 2009 put it ‘Ageing per se in the absence of technological change would have minimal effects on expenditure… the link between ageing and health expenditure as a percentage of GDP is simply disinformation’.

The Grattan report referred to  said ‘Contrary to widespread belief, it is not just the ageing of the population that is driving health spending but the fact that people of all ages are seeing doctors more often, having more tests and operations and taking more prescribed drugs”

The Health Council of Canada in a survey a couple of years ago of more elderly users of health services concluded ‘the largest controlling factor in this rise [in health costs] is neither ageing nor population growth … it is increased use’.

In future blogs I will look at some of the major drivers of increased demand and increased costs in health care that should be addressed. It is not just the ageing of our population.

But we should keep a sense of perspective. At 9% of GDP committed to healthcare in Australia, we are in the middle range of comparable countries and slightly below the OECD median. Medicare has served us well. We spend about a half of what the US spends on health as a proportion of GDP.

The US is a standout example that we should not entertain any idea of increased government support for private health insurance companies that are no match for powerful providers…doctors and private hospitals including “charitable” hospitals.

John Menadue

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