Adjunct Professor Terry Slevin, CEO PHAA
The “Vomit Principle”? Let me explain.
The CEO of the well-respected Grattan Institute spoke to a PHAA conference in 2020 about the process of using evidence to influence public policy. In Danielle Wood’s slides was a dot point saying “don’t forget the vomit principle”. But she skipped over it without mention. A participant – like me – picked it up and (unlike me) was brave enough to ask what she meant.
In essence it is the feeling you get when you think “if I have to explain this one more time, I think I am going to vomit”. It is then, and almost ONLY then, that you are starting to get your message across.
That is the kind of feeling I and many in Public Health get when talking about investment in prevention.
So as the Australian Government turns to framing its final Budget for this term of Parliament, it has been advised (again!) to focus strongly on preventive health investment.
This should be welcome advice, since only last December the Government announced its National Preventive Health Strategy (NPHS), which focuses heavily on the issue, and makes unambiguous policy commitments for the next decade.
PHAA’s pre-Budget submission, The Public Health Crisis Budget, gives clear advice on the preventive health measures Australia should adopt. Our submission outlines recommendations that would both improve the health of all Australians, and at the same time restore public confidence and bolster Commonwealth revenue to help repair the government’s finances.
Australia has one of the lowest rates of preventive health spending (as a proportion of all health spending) of any OECD nation. Investment in preventive health has been less than 2% of health expenditure for at least the past 10 years, and stood at only 1.7% in 2019-20.[i] Much stronger performances by Canada, New Zealand and the United Kingdom – nations with comparable health systems to Australia’s in many ways – are around 5% of total health spending.[ii] (Needless to say, this comparison precedes the recent pandemic-related communicable disease control expenditures.)
Higher preventive health spending is sound long-term financial management. It means reduced disease – and with that, reduced health system cost pressure on governments, especially with respect to long-term chronic disease – in future years and decades.
PHAA has therefore advocated for a standard that 5% of government budget expenditures on health should be directed to prevention at both Commonwealth and state/territory levels. The Western Australian Government announced a policy to reach this point by the year 2029.[iii] And crucially, the Commonwealth has itself adopted this target (for the year 2030) through the National Preventive Health Strategy.
The NPHS sets goals for a healthier Australia, including a strong investment target:
“Investment in prevention is increased. Health expenditure is currently spent primarily on the treatment of illness and disease. Investment in prevention needs to be enhanced in order to achieve a better balance between treatment and prevention in Australia, as outlined in Australia’s Long Term National Health Plan. Underpinned by: Investment in preventive health will rise to be 5% of total health expenditure across Commonwealth, state and territory governments by 2030.”[iv]
However, it is important to note that any strategy is only as good as its implementation, and in this case, the NPHS refers to its goals being pursued through a ‘Blueprint for Action’ (NPHS, p72), dealing with the implementation and monitoring of progress in terms laid out in the strategy’s Appendix (pp 73-76).
The NPHS is a 10-year strategy, and it would be absurd for no action to enact it to commence until the second or third year of the decade; action should start immediately, in 2022. The Strategy itself notes that the Government will not wait for the finalisation of the ‘Blueprint’ to start work:
“A key focus of this Strategy is the need to mobilise the prevention system to ensure an enduring system into the future and it is important this commences in the first year of this Strategy. Therefore, parallel to the development of the Blueprint for Action, the implementation of the immediate priorities outlined in this Strategy will commence.” (p 72)
The 2022-23 Budget will be judged against this commitment.
One obvious way to advance this policy direction is to use a ‘future fund’ approach. A ‘Preventive Health Future Fund’ would store and release funding for preventive health programs, campaigns, early detection, and other practical investments. Such a fund would resemble the system by which funding for health and medical research is already provided for by the Government through the Medical Research Future Fund (MRFF). A fund model works to support the investment goal of 5% of health spending.
The Government has already announced an intention to pursue such a policy, through the NPHS, as the following extract outlines:
“The most effective preventive health efforts in Australia have come from evidence-based approaches that have received sustained investment and commitment by governments, the health sector and the community. Enhanced governance structures are required to create a more resilient prevention system.[v] This includes:
- an independent, expert-led mechanism that will advise the Australian Government, through an equity lens, on current, emerging and future priorities in prevention, and
- a governance mechanism within government, and across relevant portfolios, that have an influence on the health and wellbeing of Australians.
These mechanisms need to be underpinned by long-term and sustainable funding.
“It is time that funding and governance is ring-fenced for prevention. We need strong, independent institutions and financing, and a decision-making mechanism.”
Australia needs to be able to assess, prioritise and direct action towards the best possible initiatives to have the greatest impact on health and ensure the best use of resources. This mechanism would: provide independent, expert-led, evidence-based assessment of the effectiveness and efficiency of preventive health programs; provide guidance on investment and implementation; enable monitoring of existing and emerging health issues; and enable cross-sectoral collaboration, including shared-decision making with Aboriginal and Torres Strait Islander people.
“A long-term and sustainable funding mechanism will be critical to success.”
There is a need to significantly enhance investment in prevention in order to achieve a better balance between treatment and prevention. A long-term, sustainable funding mechanism is essential to achieving the aims of this Strategy, including that investment in prevention is increased (Aim 4). It should be recognised that investment in the avoidance of illness is an investment in the avoidance of future treatment costs. The independent, expert-led governance mechanism would provide advice to Government on how the fund can be used to implement affordable, feasible and cost-effective prevention action.”[vi]
One source of revenue to support a prevention fund would be proceeds from the national excise taxation of tobacco, alcohol, and sugar sweetened beverages. Even a modest portion of the existing levels of tobacco taxation, which at present raises around $13 billion p.a. in federal revenue, would quickly and effectively establish a fund.[vii] Increases additional to the current tax settings could also be directed to the fund.
An evidence-based mechanism to oversee such a fund would be needed. An expert body styled after the Pharmaceutical Benefits Advisory Committee (PBAC) and the Medicare Benefits Advisory Committee (MBAC) could be established to oversee the fund’s investment directions in an evidence-based manner to maximise disease prevention outcomes, with a focus on the highest needs populations.
Realising this vision would require cooperative work between the Commonwealth and the states and territories. The National Preventive Health Strategy looks to achieve exactly such a collective, all-governments outcome. As mentioned above, policy alignment on public health directions is currently very strong.
The role of the states and territories in delivering programs funded through a fund mechanism would be straightforward, with the Commonwealth Department of Health playing a role of coordination, standard-setting, and outcome monitoring. Treasury would have a role to play in measuring and reporting on investment outcomes in each jurisdiction, taking into account funding flows from the Commonwealth as the primary collector of revenue in the overall Australian fiscal system.
The 2022-23 Budget will be assessed by whether it embraces the measures needed for such an investment in all of our health.
See other Budget-related posts:
- Where will the 2022 Budget take us?
- Public health measures can help balance the Budget
- Population health is economics
- Budget should focus on preventing chronic illness
[i] AIHW, Health Expenditure Australia 2019-20: https://www.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure-australia-2019-20/contents/about
[ii] OECD Date, Health Spending: Melbourne Sustainable Society Institute: https://data.oecd.org/healthres/health-spending.htm
[iii] Sustainable Health Review (2019). Sustainable Health Review: Final Report to the Western Australian Government. Department of Health, Western Australia. Recommendation 1.
[iv] Commonwealth of Australia, Department of Health, National Preventive Health Strategy 2021-2030: https://www.health.gov.au/resources/publications/national-preventive-health-strategy-2021-2030, page 9
[v] Wutzke S, Morrice E, Benton M, et al., 2017. What will it take to improve prevention of chronic diseases in Australia? A case study of two national approaches. Aust Health Rev. 41(2): p. 176-181.
[vi] Commonwealth of Australia, Department of Health, National Preventive Health Strategy 2021-2030: https://www.health.gov.au/resources/publications/national-preventive-health-strategy-2021-2030, page 36
[vii] Scollo, M., Bayly, M. (2019) 13.6 Revenue from tobacco taxes in Australia. In Scollo, MM & Winstanley, MH (editors). Tobacco in Australia: Facts and issues. Cancer Council Victoria.