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New SA report shows why governments are failing to control health spending

In September, the Queensland Government

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In September, the Queensland Government suggested that the Federal Government and the emerging Medicare Locals network should step in to fill the gaps caused by its health spending cuts.

SA appears to be heading in a similar direction, according to a recent report recommending sweeping changes and cuts to community and primary health care services.

The Review of Non-Hospital Based Services evaluated 235 services across metropolitan Local Health Networks. In its sights are practice nurse programs, services for youth, women and the elderly, health promotion programs, and an Aboriginal health workforce initiative.

The review says there is little reliable evidence to show that the primary health care sector is meeting objectives, and that “unlike the acute sector, there is no agreed standard approach to evaluating value for money effectiveness of primary healthcare services”.

The review – which is open to public comment until 4 February – warns that without better evidence about the impact of their work, “primary health care clinicians and administrators will continue to struggle to mount a case for retaining current levels of investment, to say nothing of attracting new investment, in primary health care. This is the reality of the fierce competition for resources that is part and parcel of modern government.”

However, a leading public health advocate Professor Fran Baum writes below that the review shows a poor grasp of the determinants of health and the international body of research evidence showing the value of community services and primary health care.

Professor Baum, Director, Southgate Institute for Health, Society & Equity at Flinders University, warns that the review’s recommendations would hit the community’s most disadvantaged members, at the same time as salaries and payments to medical specialists have been increasing.


Cutting disease prevention and health promotion won’t reduce health spending

Fran Baum writes:

All the international evidence suggestions we should be increasing investment in health promotion and primary health care, yet a report released in South Australia has chosen to ignore this rich evidence and recommends cuts to these areas.

Like other State governments, the South Australian Labor Government has suffered from falling state revenues (less house sales, less GST revenue). This has forced it to look for savings and inevitably health, by far the biggest spending department, has been in the firing line.

Health spending continues on an upwards trajectory so that in 2012-13, it was 129% higher than in 2001-02. The latest shot from the austerity trenches has been the publication of the McCann review available here.

This Review of Non-Hospital Based Services was led by Warren McCann from the Office of Public Employment and Review, and purportedly examined “the performance and outcomes of 235 individual non-hospital based services across metropolitan Local Health Networks (LHNs)”.

Its stated aim was “to identify opportunities to improve services or deliver them in a more efficient manner, as well as to achieve savings to contribute to SA Health’s budget savings strategy”.

The real game is revealed by the following: “Under the new national health care reform, many of the services that were subject to the Review will come under the responsibility of Medicare Locals. In light of this, the Review ensures our non-hospital based services will complement Medicare Locals, rather than duplicate or compete against them.”

Yes, you’ve got it – it is a State/Commonwealth cost shifting exercise once again!

SA Health’s “non-hospital based services” include a range of primary and community health programs in Adelaide.

The report recommends that: all the 40 FTE health promotion positions are cut, sweeping cuts are made to the already tiny women’s health and youth health services, Aboriginal workforce initiative and some support services to GPs.

These savings are a tiny drop in the tsunami of health spending that threatens to consume the entirety of State government budgets in about twenty years if nothing is done to stop it.

In many ways the McCann report provides a microcosm of why governments are failing to control health spending. Here I’ll expand on two of the reasons for this claim:

1. Poor understanding of the determinants of health

The report simply does not understand what makes populations healthy. This question is complex and requires a good understanding of the social determinants of health (the things in our everyday life – like social contacts, work, leisure, the quality of our housing – and the broader macro-political and economic environments in which we all live).

Primary health care and community health services should ideally interact with agencies and groups in a local community that impact on the social determinants of health.

In the past South Australia had a great network of community health services that did this very well. Typical activities were community gardens (also good for social interaction as well as learning about healthy food), advocacy work to ensure that disadvantaged clients gain access to health promoting services such as housing, legal advice and women’s shelters; working with local shopping malls to have them welcome walking groups, encouraging child care centres to provide healthy food, organise networks of community foodies to promote healthy weight through good healthy food. The list could go on and on.

Over the past five years this work has been progressively cut back and reshaped into a more medical model of community health, which isn’t able to do this important development work that builds health promoting social capital.

Just one example of how McCann doesn’t get the value of such work – the report notes that the women’s health services do not contribute to chronic disease management, hospital avoidance and population health because they have “a stronger focus on social support, community engagement”.

Obviously McCann is not aware of the very large evidence base which shows that social support is crucial in recovery from illness (so reducing need for readmission to hospital) and for keeping people healthy.

2. Austerity measures are not fairly shared

All international evidence that is available confirms that the health systems which are most efficient and cost-effective are based on strong primary health care services.

If we want to stem the costs of health care we have to increase investment in community services and reduce the amount spent on hospitals.

In the past five years the salaries and payments to medical specialists have increased very significantly.

Far more could be achieved if McCann had been asked to systematically document these increases and shown the community that their much valued local health services were being lost because medical specialists have received considerable pay increases.

This is the community conversation that we need to have. Otherwise it is austerity for some and not for others. Ironically the cuts McCann recommends will affect the most disadvantaged of South Australia’s community because of salary increases for our most advantaged!

Finally, it was an irony that the McCann report was released when the Southgate Institute was being visited by Professor Ron Labonte (University of Ottawa).

He reminded us that the current austerity sweeping the world results from political decisions to bail out banks and from the increasing concentration of wealth. He also reminded us that we collect significantly less taxation as a percentage of GDP than we did 20 years ago.

Imagine a world in which McCann put his considerable economic skills to work to determine how much extra tax we could collect from the super-rich who use tax havens, and from corporations who have an army of taxation experts to help them reduce their taxation.

Then we could look forward to a McCann report that calls for increased investment in health promotion and community health on the grounds that prevention is cheaper than cure!

In the meantime if you’d like to object to the McCann’s review recommendations, consultations are open until 4th February.



Melissa Sweet —

Melissa Sweet

Health journalist and Croakey co-ordinator

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35 thoughts on “New SA report shows why governments are failing to control health spending

  1. Margaret Nelson

    Perhaps those left in public health and community health (diminished as it is) could take this opportunity to direct all the families and communities, who have been supported to build up their lives and communities, (instead of going into crisis) to take their issues to parliamentarians offices. And all the sick and needy people who have previously been supported through community health, to crowd the hospitals even more. We cant really measure what we’ve prevented if its been prevented, we can only measure numbers apparently and that’s all that matters. So isn’t it time to send community people to the offices of pollies, and the sick back to hospitals? Overcrowding? it doesnt matter because they wont admit anyone anyway. But they will get numbers. And to all the people who built up community health over the years. Thank you. Who dealt with loving kindness in transferring hope and belief, better health, brighter futures, developed educational opportunities and supported our families to better health with their children, thank you. And indiginous communities to gather and support each other in their learning, and refugees to know someone wants to support them to have a new beginning, (after living in the horrors that they have), thank you. And at a smidgeon of the cost of the medical system, with 100% more commitment and passion, I am deeply grieving your loss. RIP community health. Thank you Thank you Thank you.
    What has happened to the Labor party?

  2. Stephenson Amy

    Thank you Melissa for taking the time to say very concisely what I believe all community health and health promotion professionals in South Australia are thinking. Even though I have only worked in the area for a short time since graduation, I already see the immense benefits taking the time to get to know a community and helping them address the root causes of their health problems can have. Start Right Eat Right are just finishing a study with UniSA showing the significant improvements in children’s diets once their childcare centre becomes SRER accredited while at an individual level, the incredible feedback we receive everyday on the work local Community Foodies and Health Promotion Officers are doing is inspiring. It breaks my heart that one man, can overlook what is so obvious to all of us working in this area and have these potentially devestating consequences for the people of South Australia, especially those who are already at a disadvantage. I wish someone could explain to me how they expect to decrease hospital admissions or chronic disease rates in South Australia without a co-ordinated state wide approach? We as a state have invested so much time and money into getting true primary health care to the this point and they are happy to just throw it all away. Can’t we all just see the day someone from my generation reaches the top in 10-15 years time and says ‘wow, I’ve got this great idea, why don’t we try to stop people from getting sick before they get to the hospital, we’ll call it prevention’…. like no-one ever thought of it before…

  3. jules ferguson

    I have been a consumer advocate in the southern region of Adelaide for many years and have now witnessed a health service that is short sightedly focused on the medical model and not totally focused or committed on a primary health care model.

    What happens when this occurs….a budget blow out!

    We have the KPMG report which states SA Health needs to work smarter to make savings that will better sustain a health service as the population ages.

    McCann obviously doesn’t see that prevention is better than cure and in the long run WILL save $$$$$$$.
    Surely he should see that prevention is better than cure and the emphasis needs to be on the social determinants of health and health equity. The research links primary health care and health promotion with positive health outcomes and shows that it strengthens PHC and improves population health and hospital avoidance, so will be cost effective.

    I am dismayed at the thought of recommending cuts to health promotion and PHC services including community foodies, eat well be active and so on as budget measures. The savings are minor compared to the rest of the health budget which has blown out due to not enough emphasis on health promotion. Is this just an excuse for cutting the health budget and shifting responsibilities onto the Commonwealth government for political gains.

    How can McCann and SA Health possibly have confidence in preventing chronic disease and hospital admissions by cutting the very programs that promote health, and the prevention of illness obtained from a short-sighted report from an individual with a poor grasp of the complexities of chronic illness prevention.

    How can SA Health seriously think that the Medicare locals will pick up the slack! They are over worked and under resourced as is! Try to get a GP appointment in a timely manner!

    I trust that the powers above will see this review with its short sighted recommendations as total rubbish and will have the foresight to ask the hard work dedicated people working at the grassroots of PHC as well as asking the consumers who use the services.

    The rhetoric comes to mind here-Patient centered care and health literacy. Hopefully comes to SA health too!

  4. Colin MacDougall

    Totally agree with Professor Fran Baum. the McCann review is nothing more than a bureaucratic report continuing decades of cost shifting between Australian and State governments. It fails miserably in a pretence to be a scientific document using evidence. It does not use evidence in a rigorous and scientific way. It fails also in addressing global health concerns about health and equity. Rather, it dresses up ideology and internal bureaucratic wrangling in a porous veneer of psuedoscience. The problem is that acute services have a history of overspending. The McCann solution is to ignore that overspending, and pay for it by cutting community based services. The McCann review fails its own standards. It purports to analyse against evidence but fails to deliver. The real solution is to apply the criteria about evidence and value for money to the services that blow the budget in the first place. Thinly disguised attempts at cost and blame shifting have never succeeded as serious policy debate. Best to consign this review as a worthy addition to the shelf containing ideologically inspired documents that fail to deliver on rigour and intellectual honesty. Does McCann really believe that his recommendations can improve population health equitably by cutting the already bleeding community health sector? I urge SA Health and the Minister of Illness Services to be honest. If you want to cut community services please have the political courage to do it. Don’t hide behind sham reviews. Just do it and go to the electorate with a platform of cutting community services. If you want to shift costs to the Commonwealth government please negotiate that through COAG. Please do not hide behind a blatantly partisan review with flawed methodology. It is deeply ironic to see a party called Labor gazump the modus operandi of neo-liberal governments intent on cutting government services. It should not be the way a government that badges itself as in the social democratic tradition behaves. Too many people have watched too many episodes of Yes Minister and the Hollow Men to believe this latest parody of public service. I urge the Minister for Illness Services to disclose the total cost of this flawed review.If the McCann review is implemented, the great irony is that a so called Labor government will have achieved what successive conservative administrations could not: namely dismantling community services that promote the social democrat cause.

  5. Toby Freeman

    South Australia has the greatest rates of overweight and obesity in Australia- http://www.adelaidenow.com.au/news/south-australia/south-australia-is-the-fattest-state-in-the-nation/story-e6frea83-1226531621534. It’s going to get worse if these recommendations are accepted, with cuts to a range of nutrition programs.

    As others have noted, the community engagement work that will be lost if these recommendations are accepted will mean those most marginalised and who find health services most difficult to access can be expected to be more alienated by the health system, and experience poorer health.

    The only forseeable outcomes of these cuts will be greater hospital expenditure, more obesity, and greater health inequities in our state.

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