Health improvements should always be the focus, not health service activity

Election 2019. No. 4. long-term sustainable funding
Thursday, May 2, 2019

Today’s promise by Labor of a $115.6 million investment in health promotion and disease prevention deserves a big tick for refocusing attention on health improvements for the health dollar, rather than health service activity.

For too long, spending on reducing health risks from obesity, smoking and harmful drinking has been dwindling. We are now the fourth worst spender on preventive health per person out of all developed nations.

‘Prevention is better than cure, and money spent on health promotion and disease prevention programs now can help stop the big medical bills later on’, says Australian Healthcare and Hospitals Association (AHHA) Chief Executive Alison Verhoeven.

‘And, to be sustainable in the long term, all health funding, whether for prevention or treatment, should be primarily focused on outcomes for people and communities.

‘Outcomes are the ultimate measure of success in healthcare—but strong leadership by governments will be needed to change funding incentives and rewards to align with this goal.

‘Funding mechanisms don’t make people better, but they can influence the way healthcare is delivered. Outcomes, efficiency and value for money must be factored in, while also ensuring that everyone has access to high quality and appropriate care no matter where they live, or the size of their wallets.

‘For over 100 years health funding has rewarded activity, with only secondary regard for whether these occasions of service were an effective or efficient use of government or private money.

‘Our fee-for-service model doesn’t adequately support team-based care and other care models which are focused on making the best use of the resources available to manage a person’s health and achieve outcomes that are important to them.

‘We’re calling on all political parties to focus their health funding on patient and community health improvement needs, including both prevention and treatment, and on keeping out-of-pocket costs down so that people do not delay seeking care.

‘At AHHA we have a blueprint that sets out some logical steps in moving to a better and more sustainable health funding system over the next 2 years, 5 years, and 7–10 years.

‘A good place to start is eliminating system inefficiencies such as the current ‘blame game’ cost shifting between the Commonwealth and the States and Territories. Labor’s proposed Health Reform Commission is therefore welcome as is the Greens’ similar proposal for an independent funding agency.

‘Low-value care should be identified and no longer subsidised, as well as treatments that have proven to be ineffective or superseded by better treatments. The Coalition’s ongoing Medicare Benefits Schedule Review is on the right track, although progress has been slow so far.

‘Funding mechanisms that encourage treatment in GP surgeries and other primary care clinics while keeping people out of hospitals will enable savings to be directed elsewhere in the system, including keeping out-of-pocket costs down.

‘And, in our current 31 Primary Health Networks around Australia we already have a system for tailoring services to regional needs and enabling funding flexibility. This is contingent on having high quality data systems in place that accurately report what each region’s needs are, and how health services are performing in meeting those needs. More research on value in healthcare is also needed, which is why we have set up the Australian Centre for Value-Based Healthcare.

‘We call on all parties to begin this much-needed health funding reform journey during the term of the next Parliament’, Ms Verhoeven said.

To follow AHHA commentary throughout the election campaign, visit

Media enquiries:  Alison Verhoeven, Chief Executive, AHHA

0403 282 501