Written by 
The Australian Bureau of Statistics revealed something very interesting about Australian health last week: dementia is poised to become our biggest killer, ahead of heart disease. It’s already the biggest killer of women, South Australians, Canberrans and people in NSW, and will soon occupy top spot across all categories.
While part of the reason is because dementia deaths are increasing, the broader story is a good news one: we’re getting much better at preventing heart disease, which for generations was our biggest killer, and Australians are living longer. That includes Indigenous peoples, despite the appalling reality that they still die, on average, eight years younger than non-Indigenous Australians. Overall, we now have the fourth-highest life expectancy in the world.
This is contrary to the narrative that pervades the media about our health system — one in which our “frontline” health workers heroically battle to overcome government neglect and inadequate spending, while the population is beset by various “epidemics” — obesity, alcohol, illicit drugs. In fact, Australian longevity is so remarkable that in August The Economist published a piece simply titled “Why do Australians live so long?”
A key reason for our improving life expectancy is that, like every other developed country, we’ve lifted our health and caring spending dramatically — as Crikey has repeatedly pointed out, our health and caring sector is far and away the biggest employer of Australians and is one of the fastest-growing employers. Governments from both sides have increased both health spending and spending in aged care and disability care over the last decade.
There’s another narrative about our health system — one increasingly peddled by the business press. It’s about how this increased investment is a deadweight on the economy because health and caring are labour-intensive and therefore suffer from poor productivity, which also results from their being government-funded and government-run. As health and caring continues to grow, driven by an ageing population, it will impose more and more of a burden on the “market” area of the economy.
“Pouring more taxpayer money into things such as disability and aged care will only serve to drag down living standards further across the board,” the Financial Review’s Michael Read wrote in September, echoing the views of fellow neoliberal galah John Kehoe that “wealthy economies are shifting away from manufacturing to lower productivity services such as aged care, healthcare, disability care and personal services such as massage and beauty. Labor wants to improve the so-called ‘care economy’. That won’t be easy in a government-dominated and regulated sector.”
Curiously, however, for a system apparently stultified by the dead hand of government, Australia’s health system far outperforms the free market-based US healthcare system, which spends nearly twice as much per capita as Australia to deliver far worse outcomes — including Americans dying five years younger than us.
For that matter, Australia’s private healthcare providers are no more efficient and productive than the public system. In a 2019 report for the Grattan Institute, health economist Stephen Duckett found that, when comparing like with like, patient stays in public hospitals are substantially shorter than in private hospitals. In 2009, the Productivity Commission (PC) concluded that there was no difference in the efficiency of private and public health systems.
Despite the doctrinaire insistence of neoliberal economists and business lobbyists that the private sector is invariably more efficient and productive than governments, in our biggest employing sector not only is there no evidence for that, the reverse may be the reality.
In April the PC returned to the issue of healthcare productivity and our international performance. Its conclusions were a direct rebuttal of the AFR line that health and care investment is some sort of productivity disaster. The first line is “contrary to prevailing views, new commission research suggests that parts of the healthcare sector have experienced robust productivity growth in recent years.”
It goes on to conclude “not only has Australia experienced robust productivity growth, commission research also finds that our healthcare sector is one of the world’s most productive. Australia’s healthcare productivity ranks third among 28 high-income countries once we account for behavioural and environmental risk factors and the age of our population.”
How could it be that a government-funded, government-regulated and often government-managed system is world-leading in productivity, and world-leading in the outcomes it delivers for Australians — and out-performing the private sector?
The results are a vindication of the strong investment both sides of politics at the federal and state levels have made into health — investment that neoliberals and business regard as a burden or indulgence to be mitigated and pared back, instead of a public sector success story. One, clearly, they’d prefer to keep quiet about.