Health expenditure – the big issue for the future

OPINION: When it comes to the big items of Government expenditure, the focus recently has been on the affordability of National Super.  But there is another area of expenditure which is also age related and has potentially much greater impact and implications – that is health expenditure.  Compared with Health, National Super is technically easy to deal with – at the end of the day, it is mostly a matter of demographics and timing.  Health is much more complicated and its costs are likely to dwarf the cost of National Super.

The basic problems with health expenditure are that we all want money spent on our health when we need it, and need is very much related to age.  I think the rough figure is that the amount of money the health system spends on each of us splits roughly around about the age of 70 – below that the tax we pay more than compensates and above that the system is increasingly in deficit (the one area we seem to have sorted is that of dealing with accidents rather than natural health.  I think ACC, for all its faults, is a magnificent mechanism for dealing with that and is the envy of the world.)

Also, health scientists keep coming up with improved technologies and drugs which are better at combatting disease and much more effective for dealing with injuries, but which inevitably cost more that yesterday’s technology.

In reality, I think Governments of all colours gave up on health some time ago and keep on approving token increases in the Health Budget to make it look as though progress is being made.  But the reality is that we are falling further and further behind, i.e. needs v ability to fund.  The gap is exacerbated by the discovery of new (expensive) drugs) which are able to treat things that were previously untreatable, ie it is not just a case of demographics.

The politicians are fond of pointing to reducing waiting lists for elective surgery as an indicator of progress when health arguments come up, but in reality, waiting lists in many areas are a joke.  The system keeps changing the rules so it is harder and harder to even get onto the waiting lists.  A common experience is for people on the list to be “reassessed” “in terms of new criteria and promptly taken off the list because they no longer meet the criteria.  Changing the rules is a great way to make it appear that progress is being made when in truth we continue to slide backwards.

The problems become more and more acute as technologies improve, more effective drugs are developed, and in both cases, are accompanied by an increase in cost.

There is also a particularly pernicious problem with waiting lists that are subject to criteria, and that is that criteria must be applied by people with knowledge in the area and it is inevitable that not only will judgements vary from one expert to another but the system becomes very vulnerable to manipulation.  It also only needs one clever change in the rules and magically the list reduces in size.

However, these problems are potentially insignificant. The “elephant in the room” is the increasing ability for medical science to eliminate diseases and extend lifespans, and potentially to keep people alive for as long as they wish to be alive.   I blanch at even contemplating the ethical problems that this raises, but it has absolutely enormous financial implications.

There are two worrying aspects to this.

The first is that the public systems is at least at present getting some relief from private insurance, although the pattern is that private insurance gets more expensive as you get older and eventually becomes unaffordable unless you are lucky enough to be very wealthy ( in which case you probably don’t need insurance anyway (there are some awful paradoxes in this whole area of insurance).  But as life spans increase, the proportion of their lives that people spend covered by private insurance will decrease and there will be a proportionate rise in public costs – and waiting lists will get impossibly long.

Bu the real dilemma is in a growing ability to extend lifespans.  There have been talk of 150 years being within reach very soon and this may well expand.  However, my understanding is that these extension technologies largely relate to the physical body we inhabit.  As people get older problems like dementia are also likely to grow because they are predominantly the problems of age.  One could visualise a crazy future world where the bulk of the electorate were aged were over seventy and dementia was endemic – but these people were electing our governments.  I don’t actually think it will come to this because the rest of the population would not tolerate it.

But as indicated above the ultimate dilemma is ethical. Having the ability to keep people alive  – maybe forever – does not necessarily mean that we should or will.  But if this choice became a reality how would such decisions be made and how on earth would you keep the system honest?

It is a scary scenario and one that fortunately I am already too old to really be a part of.

The health situation illustrates one general point and that is that humankind is rapidly approaching a point where through the advance of technology, it will (it must) become unrecognisable from the society of today. You can readily see this through the impacts that digital technology has had on our lives in only a couple of decades,

It has been said that we are really too clever for our own good, ie our ability to invent clever technologies and ways of doing things has outstripped our social and emotional ability to manage the outcomes in a way which will enable our survival as a civilised species.

Written by Bas

This is another of Bas Walker’s posts on GrownUps.  Please look out for his articles, containing his Beachside Ponderings.