The cost of Inaction on the Social Determinants of Health
The National Centre for Social and Economic Modelling (NATSEM)
Report no. 2/2012, June 4, 2012 CHA-NATSEM Second Report on Health Inequalities
Laurie Brown, Professor and Research Director (Health), Linc Thurecht, Senior Research Fellow and Binod
Available online as PDF file [54p.] at: http://bit.ly/M5704c
“……..The aim of this research is to provide an indication of the extent of the cost of Government inaction in developing policies and implementing strategies that would reduce socio-economic differences within the Australian population of working age (25-64 years) that give rise to health inequities.
The cost of inaction is measured in terms of the loss of potential social and economic outcomes that might otherwise have accrued to socio-economically disadvantaged individuals if they had had the same health profile of more socio-economically advantaged Australians.
For the purposes of this report, the contrast is made between those who are most socio-economically disadvantaged and those who are least disadvantaged defined in terms of household income, level of education, housing tenure and degree of social connectedness.
Four types of key outcomes are considered:
- the number of disadvantaged Australians of working age experiencing health inequity,
- satisfaction with life,
- economic outcomes (including employment, income from paid work,
- savings to Government expenditure on social security payments and transfers) and savings to the health system.
The Report aims to address five key questions:
• If the most socio-economically disadvantaged Australians of working age had the same self-reported health status profile of the least disadvantaged groups,
how many more individuals would be in good health rather than poor health?
• If the most socio-economically disadvantaged Australians of working age had the same prevalence of long-term health conditions as the least disadvantaged groups, how many more individuals would be free from chronic long-term illness?
• If individuals in the most socio-economically disadvantaged groups had the same health profile – in terms of self-assessed health status and long-term health conditions – of the least disadvantaged groups, how many more individuals would be satisfied with their life?
• If individuals in the most socio-economically disadvantaged groups had the same health profile of the least disadvantaged groups, what improvements in employment status, income from paid work and reductions in government pensions, allowances and other public transfers are likely to be gained?
• If individuals in the most socio-economically disadvantaged groups had the same health profile of the least disadvantaged groups, what savings might occur to the health system in terms of reduced number of hospital separations, number of doctor- and medical-related services and prescribed medicines and associated costs to Government? ….”
CONTENTS
Executive Summary
1 Introduction
2 Measuring Health and Socio-Economic Disadvantage
2.1 Key Health and Socio-Economic Indicators
2.2 Measuring Lost Benefits – the Costs of Inaction
2.3 Missing Data
2.4 Profile of the Study Population
3 How Many Disadvantaged Australians of Working Age Are Experiencing Health Inequity?
4 Costs To Well-Being - Potential Gains in Satisfaction With Life
5 Lost Economic Benefits – Potential Economic Gains From Closing Health Gaps
5.1 Potential Gains in Employment
5.2 Income and Gains in Annual Earnings
5.3 Government Pensions and Allowances and Savings in Government Expenditure
6 Savings To The Health System From Closing Health Gaps
6.1 Reduced Use of Australian Hospitals
6.2 Reduced Use of Doctor and Medical Related Services
6.3 Reduced Use of Prescribed Medicines
7 Summary and Conclusions
References Appendix 1 - Technical Notes
KMC/2012/SDE
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