No. 5

STONE the crows! Why all the fuss over death and taxes, as if either is optional? How Canberra and the states pay for hospitals, dominated politics last week – if the Prime Minister has his way the issue will exercise everybody all the way to the election.

It was bliss for the policy pointy heads who know case mix isn’t the ratio of chablis to chardonnay in the surgeons’ wine club special dozen. And it gave members of the commentariat – short of a subject since the ETS went off the agenda (oh, come on, of course you remember, cost per tonne of carbon dioxide, all that stuff) – something really complex to write about.

It’s serious stuff, the sort of debate which makes you realise how seriously serious the policy end of the press is.

But most of it was an argument of the “operation can succeed even if the patient dies” kind. Because, no matter how much cash is kicked in, the health system will always want more.

According to the Productivity Commission health expenditure increased in real terms by 70 per cent in the decade from the mid 1990s.

And there is no way to stop the spending. For a start there is going to be a lot more elderly Australians. By mid century the young-old population (75-84) will be up by 190 per cent. The population of really old oldies (85 and above) will boom, rising by 430 per cent.

Keeping the old alive already costs a bomb and it will cost a bigger one by then.  Apart from end-of-life treatment (where most people have their expensive contact with the hospital system), the Pharmaceutical Benefits Scheme spends twenty times more on people in the 65 to 74 age group than their 15 to 24 year old grandchildren.

Just about everybody also wants to live longer, healthier lives. And doctors, drug companies and the people who make (as Monty Python put it) the very expensive machines “that go ping” are keen to help. Technology costs alone increased by 2 per cent plus per annum through the 1990s.

There is simply no ceiling to the demand for health services, especially when nobody thinks they should cough up for all of the account, invoking the “I pay my taxes” doctrine.

The brutal truth is, however efficient hospitals are and however much is spent on health it will never meet demand, which gives governments two unhealthy choices.

It can increase taxes and cut other services to pay for health. Or it can cap expenditure on less electorally essential treatments – leaving ministers to explain why children with rare diseases are dying to pay for operations for 80 year olds and to decide whether grandparents or their grandchildren get the new miracle cure.

The reality is that governments will end up containing some costs to pay for the politically unavoidable increases. In the process they will upset the losers, who think that the hospitals, Medicare and the Pharmaceutical Benefits Scheme are medical magic puddings and they should be able to cut and cut again as often as they need.

The young and the healthy who will end up paying for the pudding, with increased taxes for services they do not use, will not be impressed either.

It’s enough to make a health minister ill.

STONE the crows! Why all the fuss over death and taxes, as if either is optional? How Canberra and the states pay for hospitals, dominated politics last week – if the Prime Minister has his way the issue will exercise everybody all the way to the election.

It was bliss for the policy pointy heads who know case mix isn’t the ratio of chablis to chardonnay in the surgeons’ wine club special dozen. And it gave members of the commentariat – short of a subject since the ETS went off the agenda (oh, come on, of course you remember, cost per tonne of carbon dioxide, all that stuff) – something really complex to write about.

It’s serious stuff, the sort of debate which makes you realise how seriously serious the policy end of the press is.

But most of it was an argument of the “operation can succeed even if the patient dies” kind. Because, no matter how much cash is kicked in, the health system will always want more.

According to the Productivity Commission health expenditure increased in real terms by 70 per cent in the decade from the mid 1990s.

And there is no way to stop the spending. For a start there is going to be a lot more elderly Australians. By mid century the young-old population (75-84) will be up by 190 per cent. The population of really old oldies (85 and above) will boom, rising by 430 per cent.

Keeping the old alive already costs a bomb and it will cost a bigger one by then. Apart from end-of-life treatment (where most people have their expensive contact with the hospital system), the Pharmaceutical Benefits Scheme spends twenty times more on people in the 65 to 74 age group than their 15 to 24 year old grandchildren.

Just about everybody also wants to live longer, healthier lives. And doctors, drug companies and the people who make (as Monty Python put it) the very expensive machines “that go ping” are keen to help. Technology costs alone increased by 2 per cent plus per annum through the 1990s.

There is simply no ceiling to the demand for health services, especially when nobody thinks they should cough up for all of the account, invoking the “I pay my taxes” doctrine.

The brutal truth is, however efficient hospitals are and however much is spent on health it will never meet demand, which gives governments two unhealthy choices.

It can increase taxes and cut other services to pay for health. Or it can cap expenditure on less electorally essential treatments – leaving ministers to explain why children with rare diseases are dying to pay for operations for 80 year olds and to decide whether grandparents or their grandchildren get the new miracle cure.

The reality is that governments will end up containing some costs to pay for the politically unavoidable increases. In the process they will upset the losers, who think that the hospitals, Medicare and the Pharmaceutical Benefits Scheme are medical magic puddings and they should be able to cut and cut again as often as they need.

The young and the healthy who will end up paying for the pudding, with increased taxes for services they do not use, will not be impressed either.

It’s enough to make a health minister ill.

'2012