Federal Budget Insights 2020-21

Increased healthcare resilience through the Federal Budget

Across the healthcare sector, Australia and its workforce have shown incredible resilience. A debt of gratitude is owed to the frontline health and aged care workers, combined with the leaders across the sector, in supporting the country's response to COVID-19. 

The sector was quick to respond with containment measures, testing and tracing, and building additional capacity and capabilities. We have accelerated a decade’s worth of reform in digital health, supporting both the response and in reimagining health. Localising supply chains and supporting research and development (R&D) is boosting resilience, while redesigning roles and pathways has helped address some of the gaps in our workforce. We have seen greater levels of federal-state and public-private collaboration – a positive step that can provide a foundation for longer-term reform. While we still have a way to go, we’re now much better prepared to manage an extended period of further peaks – balancing health, economic and social factors.

All this spending on health isn’t a sunk cost; rather, investment in the sector is an opportunity. Health investment in areas like workforce, digital and infrastructure is critical to delivering better health outcomes and is also part of the solution to manage the economic recovery, both for productivity and job creation.  

Australia can continue leveraging this positive momentum. In the Federal Budget, we hope to see the government support the great response and recovery work that is already underway and start to shift towards longer-term reform. Meaningful impact can be made through: 

1. Virtual health - The immediate shift into telehealth and virtual care to deliver healthcare has enabled the system to effectively respond to COVID-19. Continuing to reimagine how we integrate virtual health into the community is paramount. Pockets of innovation across the nation have popped up, but we need systemic change and sustainable funding models to continue along the trajectory for virtual care and telehealth.
2. Aged care - COVID-19 and the Royal Commission into Aged Care Quality and Safety have thrown more attention on what’s already clear: our aged care system needs reform. Focusing on quality and safety to protect older Australians is a good start. This needs to be complemented by greater access to home services, a national discussion on how improvements should be funded, and continuing to find innovative ways to support aged care (particularly in the home). Innovative digital health opportunities, more at-home care and more home-like residential aged care all play a role. But these must also be supported through significant improvements to aged care workforce capacity and skills, and the right policy settings to encourage business investment in the sector.
3. Mental health - Supporting and maintaining the mental health of communities around Australia has been a challenge throughout COVID-19. Pre-pandemic, this was already critical. Now it’s more important than ever to look after the mental health of our citizens, with a system that is inclusive, builds resilience and supports the most vulnerable (e.g. regional communities). Australia has much of the research and tools needed to address the ‘mental health curve’. Given the changing nature of work, what’s needed now is to support employers to take an active role in their workplaces, and to help build resilience for our workforce. We also need an evidence-informed approach and a sustainable way forward for Federal and State Governments, as well as health, life and accident insurers to fund effective services and products.
4. Medical research and supply chains - The pandemic has highlighted vulnerabilities in global and local supply chains. It’s also reaffirmed the importance of essential supplies, initially with access to personal protective equipment (PPE) and the need to pivot manufacturing supplies (e.g. ventilators). With focus increasing on vaccines, diagnostics and therapeutics, localisation is required to allow for a more resilient supply chain. We should support our local medical research and clinical trials sector and build Australia’s domestic manufacturing capability to build resilience and economic benefits, including jobs. 
5. Workforce and capacity building - Challenges still remain with maintaining sufficient numbers of professionals to meet the growing health demands, exacerbated by our reliance on skilled migration. To support an efficient healthcare system of the future, we need to increase capacity and capabilities across the sector – by redesigning roles, creating local career pathways, expanding targeted skilled migration and reducing the gap between supply and demand. We also need to sustain a viable private health sector, complementing the public sector, with continued support of partnership agreements to provide surge capacity. 
6. Preventive health - We will need an ongoing focus on responses to new COVID-19 clusters, while catching up on required preventive health and elective surgery. We need to increase our focus on vulnerable communities (e.g. First Nations peoples), support our disability sector and invest in social determinants of health around issues such as social housing, early childhood education and obesity. Rather than delay, investment in these areas is an opportunity to support both long-term health outcomes and short-term economic outcomes as part of the stimulus (e.g. social housing infrastructure).
7. Public-private health - Australia’s balanced public-private health sector has led to additional capacity in responding to COVID-19, as well as ongoing benefits from relieving pressure on the public sector, choice and innovation. Retaining a strong commitment from the government – as well as active engagement and co-investment across the private sector – will be important as we tilt towards recovery and reform. We should explore fresh approaches for a sustainable private health insurance sector, such as new products, pricing and incentives to attract young people (e.g. Fringe Benefit Tax exemptions for corporate insurance) and acceleration for new models of care and broader coverage, including preventive care and care outside of hospital settings.

The health and wellbeing sector can be part of the solution to help deliver better health outcomes and manage Australia’s economic recovery. In the Federal Budget, we look forward to seeing the government build momentum on some of the good work that is underway.