Budget 2018 boosts aged care, rural health and medical research: health experts respond



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A$1.6 billion over four years will allow 14,000 more older Australians to remain in their home for longer.
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Kees Van Gool, University of Technology Sydney; Andrew Wilson, University of Sydney; Helen Dickinson, UNSW; Lesley Russell, University of Sydney; Peter Sivey, RMIT University, and Rosalie Viney, University of Technology Sydney

The winners of this year’s health budget are aged care, rural health and medical research.

The government has announced A$1.6 billion over four years to allow 14,000 more older Australians to remain in their home for longer through more high-level home care places. For those in aged care, an additional A$82.5 million will be directed to improve mental health services in the facilities.

The budget includes A$83.3 million over five years for a rural health strategy, which aims to place more doctors and nurses in the bush and train 100 additional GPs.

There’s A$1.3 billion over ten years for a National Health and Medical Industry Growth Plan, which includes A$500 million for new research in the field of genomics.

Other key announcements include:

– A$1.4 billion for new and amended listings on PBS
– A$302.6 million in savings over forward estimates by encouraging greater use of generic and bio similar medicines
– A$253.8 million for a new Aged Care Quality and Safety Commission.




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Infographic: Budget 2018 at a glance


Aged care

Helen Dickinson, Associate Professor, Public Service Research Group at UNSW

It was well foreshadowed that this budget would bring with it significant provisions for aged care. It has been widely reported that reforms to pension and superannuation tax have resulted in disaffection in the Coalition within older age groups.

Making older Australians the cornerstone of budget measures is a calculated political tactic in a budget that in the short term makes only limited tax cuts for low- and middle-income earners.

The A$1.6 billion for 14,000 new places for home-care recipients will be welcome, but are a drop in the ocean, given there are currently more than 100,000 people on the national priority list for support.

Additional commitments around trials for physical activities for older people, initiatives to improve connections to communities and protections for older people against abuse will bolster those remaining in homes and communities.

Commitments made for specific initiatives for Aboriginal and Torres Strait Islander people and aged care facilities in rural and remote Australia will be welcomed, although their size and scope will likely result in little to address older age groups with complex needs.

While investment in aged care services will be welcome, it remains to be seen whether this multi-million-dollar commitment will succeed in clawing back support from older voters.

Recent years have seen around A$2 billion of cuts made to the sector through adjustments to the residential care funding formula. The current financial commitments go some way to restoring spending, but do not significantly advance spending beyond previous levels in an area of the population we know is expanding substantially in volume and level of need and expectation.

A number of new budget commitments have been announced in relation to mental health services for older people in residential aged care facilities, for a national mental health commission, and for Lifeline Australia.

However, given the current turbulence in mental health services, it’s unclear whether these will impact on the types of issues that are being felt currently or whether this will further disaggregate an already complex and often unconnected system.

It’s unclear whether this will be enough to win back older Australians’ support.
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Equity, prevention and Indigenous health

Lesley Russell, Adjunct Associate Professor, Menzies Centre for Health Policy at the University of Sydney

The government states its desire for a stronger economy and to limit economic imposts on future generations, but this budget highlights a continued failure to invest in the areas that will deliver more sustainable health care spending, reduce health disparities, and improve health outcomes and productivity for all Australians.

We know what the best buys in primary prevention are. But despite the fact that obesity is a heavy and costly burden on the health care system, and the broad agreement from experts on a suite of solutions, this can is once again kicked down the road.

There is nothing new to address the harms caused by excessive alcohol use or opioid abuse.

The crackdown on illegal tobacco is about lost taxes rather than smoking prevention.

There is A$20.9 million over five years to improve the health of women and children – an assorted collection of small programs which could conceivably be claimed as preventive health.

There is nothing in this budget to address growing out-of-pocket costs that limit the ability of many to access needed care.

Additional funding (given in budget papers as A$83.3 million over five years but more accurately described as A$122.4 million over 2018-19 and 2019-20, with savings of A$55.6 million taken in 2020-21 and 2021-22) is provided for rural health that should help improve health equity for country Australians.

Continued funding is provided for the Indigenous Australians’ Health Program (A$3.9 billion over four years); there is new money for ear, eye and scabies programs and also for a new Medicare item for remote dialysis services.

There are promises for a new funding model for primary care provided through Aboriginal Community Controlled Health Services (but no details) and better access for Indigenous people to aged care.

The renewal of the Remote Indigenous Housing Agreement with the Northern Territory will assist with improved health outcomes for those communities.

PBS, medicines and research

Rosalie Viney, Professor of Health Economics at the University of Technology Sydney

The budget includes a notable increase in net expenditure on the Pharmaceutical Benefits Scheme (PBS) of A$1.4 billion for new and amended listings of drugs, although most of these have already been anticipated by positive recommendations by the Pharmaceutical Benefits Advisory Committee (PBAC).

Access to a number of new medicines has been announced. The new and amended medicine listings are clearly funded through savings in PBS expenditure from greater use of generic and bio-similar medicines, given the net increase in expenditure over the five year outlook is around A$0.7 billion.

The budget includes A$1.4 billion for pharmaceuticals.
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In terms of medical research, there is an encouraging announcement of significant further investments through the Medical Research Futures Fund. This will be welcomed by health and medical researchers across Australia.

What is notable is the focus on the capacity of health and medical research to generate new jobs through new technology. While this is certainly important, it is as much about boosting the local medical technology and innovation industry than on improving health system performance. And the announcements in the budget are as much about the potential job growth from medical innovation as on providing more or improved health services.

There is new funding for medical research, development of diagnostic tools and medical technologies, and clinical trials of new drugs. The focus on a 21st century medical industry plan recognises that health is big business as well as being important for all Australians.

All of this is welcome, but it will be absolutely critical that there are rigorous processes for evaluating this research and ensuring the funding is allocated based on scientific merit. This can represent a major challenge when industry development objectives are given similar standing in determining priorities as health outcomes and scientific quality.

Rural health

Andrew Wilson, Co-Director, Menzies Centre for Health Policy at the University of Sydney

Rural Australians experience a range of health disadvantages including higher rates of smoking and obesity, poorer survival rates from cancer and lower life expectancy, and this is not solely due to the poor health of the Aboriginal community.

The government has committed to improving rural health services through the Stronger Rural Health Strategy and the budget has some funding to underpin this.

The pressure to fund another medical school in rural NSW and Victoria has been sensibly addressed by enhancing and networking existing rural clinical schools through the Murray Darling Medical Schools network. This will provide more opportunities for all medical students to spend a large proportion of their studentship in a rural setting while not increasing the number of Commonwealth supported places.

There is a major need to match this increased student capacity with a greater investment in specialist training positions in regional hospitals to ensure the retention of that workforce in country areas. Hopefully the new workforce incentive program will start to address this.

The budget includes a Stronger Rural Health Strategy.
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Hospitals and private health insurance

Peter Sivey, Associate Professor, School of Economics, Finance and Marketing, RMIT University

There was no new money in today’s budget for Australia’s beleaguered public hospitals. The government is still locked in a deadlock with Queensland and Victoria, which have refused to agree to the proposed 6.5% cap on yearly funding increases from the Commonwealth. With health inflation of about 4% and population growth close to 2% the cap doesn’t allow much room for increased use due to ageing or new technology.

There is no change in the government’s private health insurance policy announced last year and nothing to slow the continuing above-inflation premium rises.

The ConversationOn the savings side, there was also no move yet on the private health insurance rebate which some experts think could be scrapped.

Kees Van Gool, Health economist, University of Technology Sydney; Andrew Wilson, Co-Director, Menzies Centre for Health Policy, University of Sydney; Helen Dickinson, Associate Professor, Public Service Research Group, UNSW; Lesley Russell, Adjunct Associate Professor, Menzies Centre for Health Policy, University of Sydney; Peter Sivey, Associate Professor, School of Economics, Finance and Marketing, RMIT University, and Rosalie Viney, Professor of Health Economics, University of Technology Sydney

This article was originally published on The Conversation. Read the original article.

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Australians want insurance against the burden of old age



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Aged care costs are rising.
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Susan Thorp, University of Sydney

With the cost of caring for the elderly increasing, and the population ageing, Australia needs new sources of funding for aged care. In many parts of the world some of the cost is borne by private insurance, and new research shows there is demand for this in Australia as well.

There are several models of insurance to help fund aged care. One model is similar to what is found in the United States, where a customer pays an insurance premium each year and the insurance provider then covers (at least part) of the actual cost of getting professional care. But this restricts the customer to getting formal professional care if they become disabled or incapacitated.

Another model, somewhat similar to the system in France, has customers paying a premium each year and then receiving cash payments if they require aged care. Under this arrangement the insurer pays an agreed amount of money each year if the customer is disabled or incapacitated. There is no restriction on how that money might be used. This model is more flexible, and allows the customer choice over who provides care (it might be a family member) and where they reside.

Aged care is costly and growing

People now aged 65 have close to a three in five chance of needing some type of formal care over the remainder of their lives and around a two in five chance of spending at least some time in residential care.

The cost for this care can run from around A$1,000 each year for basic home support, to around A$65,000 each year for residential aged care. The cost is typically shared between the care receiver and the federal government.

Home care supports people to live independently in their own home. This can range from help with housework or managing medicine, to nursing services and palliative care. Residential care is for people who depend on ongoing nursing and includes accommodation in an aged care institution.

People on the full Age Pension pay 17.5% of their pension as a basic fee for in-home care, or 85% of their pension for residential care. Better-off pensioners also pay an additional fee that rises with their income up to certain limits.

But despite the cost sharing, the federal government’s share is high and rising. Federal government expenditure on aged care is now around 1% of GDP and is expected to rise to around 1.8% by 2050.

Around 80% of people who receive some aged care also get informal help, often from family or friends. While this care is unpaid and hard to value, it is likely to be worth around 4% of GDP and can lead to a loss of earnings and emotional strain for the care giver.

There is demand for insurance

Insurance could be a solution to the scale, scope and cost of aged care. But in Australia, there is little on offer. Our research shows that a majority of middle aged Australians would purchase aged care insurance in the form of an income stream that pays extra if they suffer ill health.

We asked people to choose between several options for funding their aged care. A life annuity (a regular, life-long income of around A$25,000 p.a. including the Age Pension), aged care insurance (paying about A$26,000 in ill health or disability), and an account-based pension (such as superannuation).

Men chose to use 25% of their retirement savings of A$175,000 on the life annuity, about 15% on aged care insurance and placed the remainder in the account based pension. Women made similar allocations. Overall, people chose insurance payments that were similar to the actual costs of aged care.

Insurance that provides an income rather than reimbursements suits people who prefer informal, in-home care. This is most likely to be women who think they need high level, informal care. Men who thought they would need informal care did not choose the insurance.

Women’s willingness to fund informal care with income could be related to an anticipation that they will outlive their partners, a desire not to “be a burden” to their family, an intention to make gifts to children who care for them, or a wish for flexibility and control.

The ConversationLarge scale, long term aged care expenses are a relatively recent problem – the outcome of population ageing and rising health costs. Our study shows that many people want help to manage these risks. However the current design and marketing of aged care insurance products present an array of difficult financial and communication problems for the financial services sector.

Susan Thorp, Professor of Finance, University of Sydney

This article was originally published on The Conversation. Read the original article.

Rudd Labor Off and Running … Liberals???


The Kevin Rudd Labor government is off and running, even though the government is yet to be sworn in. In what can only be described as very hopeful and wonderful signs of a pro-active government to come, Kevin Rudd and his newly formed ministry have hit the road running in almost every major policy area. The Rudd Labor government looks set to keep faith with the electorate by implementing each and every promise it made in the election campaign as quickly as possible.

Perhaps of even greater significance is the new government’s determination to meet every issue facing the nation head on, with a very strong emphasis of getting down and dirty with the nation as it seeks to meet the many problems that currently face it, including homelessness and indigenous affairs. Labor MPs are being urged very strongly by Prime Minister elect Kevin Rudd, to become intimately familiar with the problems facing Australia by getting in amongst the issues by visiting the homeless, aged care facilities, etc. These visits are not to be photo ops, but fact finding missions with a view to finding solutions for the problems facing Australia.

The doubters of Kevin Rudd must surely be very impressed with his approach to government thus far and the determination being shown by Labor in government to make a real difference and improvement in Australia for all. Kevin Rudd the man is now standing out for all of Australia to see and we watch with interest to learn more and watch his development as Prime Minister. The test of the man and leader is surely yet to come, as adversity will bring out the true character of Kevin Rudd – but he is certainly of to a great start. 

There is renewed hope for Australia’s future like there hasn’t been for many years – these are very interesting and exciting times to be Australian.

For the Liberal Party however it is more of the same it seems with the new leadership team sounding like the same party that was so soundly turned put of office in the recent national poll. John Howard, Peter Costello and co may all be gone, but the same tired rhetoric and sentiment seems to remain. It would appear that on current form a spell in the political wilderness beckons for the Liberal/National Party opposition, along with many leadership tensions and an inability to move on.

Old People Allowed to Be Rude


I never knew that being old made it allowable to be rude. However, this would seem to be the growing acceptable trend with older people. It would appear to me that this is the seeming policy in Aged Care these days, as well as in Retirement Villages, general public places, etc. You are no longer allowed to challenge poor behaviour in the elderly because they are old. Does being old give you a right to abuse people and to be rude ~ I wouldn’t have thought so, but apparently it is becoming an acceptable practice/trend.

Isn’t it interesting that in an age where any form of physical discipline of children is regarded as being child abuse, that the rate of poor behaviour in children is increasing to an alarming level? I have heard it said, that a lot of older people with Dementia-type illnesses return to a child-like state. But it seems to me, that by virtue of becoming old, a good number of older people are also being allowed to misbehave by society and are not being challenged concerning their behaviour simply because they are ‘old.’

Perhaps this is just another example of the way modern society is heading ~ a culture of disrespect for others and a strong sense of self-centredness.

I have a theory about all this ~ there is nothing really new under the sun. What earlier generations once called ‘sin,’ and what the Bible still does, modern society appears to be happy to call it becoming more self-aware and in touch with your needs, expressing healthy concern for self and meeting what self requires. I think I prefer the Biblical explanation. It is quite simply an expression of rebellion against God and disobedience to his law – in other words, sin.