This pre-election Budget does “very little” to address the strategic policy problems affecting the health sector, according to this detailed overview by health policy analyst Charles Maskell-Knight.
Charles Maskell-Knight writes:
In an article in Croakey last week I summarised the baseline estimates for health and aged care set out in the 2021 budget.
I also speculated on what policy changes might or might not be included in this year’s budget.
In this article I examine changes in aggregate spending in this budget compare with last year’s version, and then summarise the major policy decisions with financial implications as well as the non-decisions, where the Government has not acted on important policy issues.
Aggregate spending in health and aged care
This is not a big-spending budget in relation to health and aged care. Even though the Department’s “Budget at a glance” fact sheet is laced with large numbers – “guaranteeing Medicare – $133 billion” – these simply reflect existing spending aggregated over the budget and three forward estimates years.
Budget Paper 2 setting out the impact of policy decisions identifies just under $5.5 billion in new spending between 2022-23 and 2025-26, and about half of this is in the budget year. By 2025-26 new spending is only $861 million out of total health and aged care spending of $143 billion.
The following table shows the difference between estimates in this Budget and those set out in the 2021 Budget.
The major changes relate to the Health services sub-function, reflecting decisions announced in MYEFO about further steps to address COVID-19, including supply of third dose vaccines, RATs, and some PPE, and Pharmaceutical services, mainly reflecting new PBS listings. Other than that, there are no major policy changes affecting the long-term spending trajectory.
Having said that, there are some 43 policy decisions affecting the Health portfolio, and many of these have numerous sub-components.
For example, there is a decision headlined as spending $547 million on mental health services, which has 28 different elements. However, only $303 million of this is new money. The measure includes $1.6 million over four years “to continue funding for youth mental health services on the Mornington Peninsula”. Minister Hunt is continuing to look after his electorate even as he leaves it behind.
Points of interest
Cost of living: There is very little in the health budget explicitly directed to this high-level objective. The policy settings around the private health insurance premium rebate are unchanged, meaning policy-holders will pay an ever-increasing share of their premiums. However, there is a measure to lower the thresholds for the PBS safety net by about 25 percent for concessional patients and five percent for general patients, at a cost of $525 million.
COVID-19: According to the Department, the government “is providing an additional investment of more than $900 million to keep Australians safe from COVID-19 by ensuring access to safe and effective vaccines for eligible populations until the end of 2022”. It is not clear whether this includes any provision for second boosters (fourth shots) for a wider population than that already approved – but it certainly does not assume an ongoing vaccination program.
Public hospitals: While the Budget includes $984 million over two years from 2022-23 to “extend activities under the National Partnership on COVID-19 Response”, there is no provision for any changes to the underlying parameters in the hospital funding arrangements.
Aged care: There is no provision to address aged care workforce remuneration – and hence supply.
Dental health: In what must be an all-time record, the government intends to negotiate a fourth annual renewal of the agreement under which it supplies the states with $108 million to support state public dental services.
Aboriginal and Torres Strait Islander Health: There is no additional spending on this important area. Indeed, by 2025-26 expenditure is estimated as $1137 million, $5 million less than the estimate for 2022-23.
Primary Health Care 10-Year Plan: This plan seems to have emerged from the Minister’s pending drawer, with a claim that the “Budget delivers the Primary Health Care 10 Year Plan along with an investment in the 2022–23 Budget of $632.8 million over four years from 2022–23”. However, the plan does not yet appear on the Department’s website.
Closer examination suggests that the “Plan” is a collection of odd policies stitched together hastily at the last minute to form a fig leaf covering a strategic shortfall. The $632 million includes $108 million for the one-year extension to dental funding for the states mentioned earlier. Does the Plan envisage that dental health will be solved after one year?
The bulk of the funding ($296.5 million) is for “building on the 10 Year Stronger Rural Health Strategy”. This includes about $150 million for various education and training measures, $66 million to improve access to MRI services, and $55 million for the Royal Flying Doctor Service.
Another measure allocates $32 million for “medical research grants to support clinicians” – hardly a major priority for improving primary care.
Poor access to allied health services is a major failing of primary care in Australia. The Budget allocates $3.9 million to improve access to interpreter services for allied health. Of course this is worthwhile – but it does not address the underlying difficulty of financial barriers to access to allied health service faced by many Australians.
National preventive health strategy: The includes $30.1 million over four years “in preventive health measures to make Australia healthier and reverse the rising incidence of preventable chronic conditions by implementing the National Preventive Health Strategy 2021–2030” released in December last year.
Again, the funding appears to be for a rag-tag collection of measures brought together under a common label, rather than elements of a well-thought through strategy.
$8.6 million of the $30.1 million is a one-year extension to funding for organisations that operate programs “that aim to eliminate HIV, viral hepatitis and sexually transmitted infections (STIs) as public health threats by 2030”. How these organisations will operate between 2023 and 2030 in the absence of ongoing funding is not made clear.
Other components of the funding also simply allow the continuation of existing programs, including $8.4 million over four years “to support the continuation of the Asthma Management Program, which aims to improve the management of asthma in the community and to promote appropriate access to medical support”, and $1 million over one year “to continue the implementation of the Healthy Habits program of the Royal Australian College of General Practitioners (RACGP)… [which] helps GPs to make positive lifestyle changes easier and more effective for patients, using behavioural interventions designed in consultation with GPs, Primary Care Nurses and behaviour change experts”.
There is $9.7 million over three years for the Heart Foundation “to build on their successful walking initiatives to improve awareness of the benefits of physical activity and increase participation of at-risk groups, with the aim to more than double participation rates by 2025”.
That leaves $2.4 million provided for new activity, which mainly involves guideline development and feasibility studies.
It is not the dawn of a new era of preventive health policy.
This budget does very little to address the strategic policy problems affecting the health sector.
The day before the Budget Associate Professor Lesley Russell tweeted that nothing much had yet been leaked about the health budget.
It is now clear that there wasn’t much of substance to leak.
• Charles Maskell-Knight PSM worked as a senior public servant in the Department of Health for over 25 years before retiring in early 2021. He worked as a senior adviser to the Aged Care Royal Commission in 2019-20.
See Croakey’s archive of stories on #HealthBudget2022
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