How much should we be spending on health services for Aboriginal and Torres Strait Islander people?
By redeploying about 1% of the healthcare budget we could increase spending on indigenous health services by about 50%
MJA 1998; 169: 508-509
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The health of Australia's indigenous people is much worse than that of other Australians, and worse than that of people in many Third World countries. The life expectancy of Aboriginal and Torres Strait Islander people is about 17 years less than that for other Australians, and their average mortality rate is three times higher. Those living in remote areas have 10-20 times higher death rates from specific diseases, such as diabetes, cervical cancer, and infectious, parasitic and respiratory diseases.1 In attempting to redress this situation, it may be that factors such as housing, sewerage, clean water supplies, education, nutrition, and employment are as important as health services, or perhaps even more important. Nevertheless, improving health services would make a valuable contribution, particularly if the improvements raised the services to a level comparable with those of other Australians. The amount that is spent on health services for indigenous people in Australia has until recently been the subject of much speculation. The newly published Deeble Report on Expenditure on Health Services for Aboriginal and Torres Strait Islander People2 has at last given a more accurate estimate of this figure (Box). Answering the question of what is spent immediately raises the question of what should be spent on health services for indigenous Australians. That question can be answered in a number of ways depending on how one views fairness and equity. One possibility is that health expenditure per capita should be equal for all Australians. This might be fair if everyone had the same health needs, but that is not the case. The elderly, for example, have greater health needs than middle-aged people. The greater health needs of indigenous people mean that equality per capita of health expenditure on indigenous and non-indigenous people -- which is close to what Deeble and his colleagues suggest is currently the case -- is not equitable. How unequal should allocations be to be equitable? In most resource allocation formulas, allocation is on a pro rata basis according to need. However, unless the productivity of healthcare resources is higher for those in greater need, then this may do no more than stop any health gap becoming wider. There is a need to do much more than that. Rather than arguing that all nominally equal health service improvements should have the same value irrespective of who receives them, and allocating resources pro rata with needs, one way to narrow the gap would be to attach a greater weight to health improvements for indigenous people. Thus, a weight of 2, for example, would mean that, in any cost-benefit analysis or evaluation in general, the health benefits to indigenous people would be valued at twice their normal value. This would provide a transparent basis for favouring health services which will benefit indigenous people when allocating health service resources. The precise size of the weighting factor might be determined through consultation with the community, relevant decision makers and stakeholders. In Queensland, a weight of three was formerly proposed for Aboriginality. Apparently this was based solely on the fact that Aboriginal mortality rates were about three times greater than the rates for all Australians.3 In the New South Wales Resource Distribution Formula (RDF) there is now a weighting of 2.5 in an attempt to reflect the "vertical equity" weighting that the State attaches to improvements in Aboriginal health compared with similar gains in the rest of the population.4 It has also been shown that the relevant figure for primary healthcare in the Alice Springs Rural District is in excess of four (and these estimates do not take account of all the factors listed above).5 There is no right level, but there is certainly a case for higher levels of spending for at least the next 10 years. This would be a substantial investment in raising the health status of Australia's indigenous people and would need to take account of the fact that the increase in primary care will lead, in the short term, to even greater demands on hospitals. Beyond that, when the health gains have occurred, then it may be possible to reduce the level of investment again. There also needs to be recognition, as Deeble indicates, of the higher levels of spending needed for delivering services to Aboriginal communities, many of which are in remote locations, and of the need to make the services culturally appropriate. As health status improves in any community there is the prospect that "diminishing returns" will set in. Once the easily achieved gains have been made further health improvements become more difficult. However, providing more resources for those in very poor health may well prove not just equitable but cost-effective, as the improvements in health outcomes per dollar spent on those with poor health status are likely to be higher. From the point of view of the person whose health improves, the lower the starting point, the more the health gain will be valued. The enormous health gap in Australia means that a massive catch-up program is required. Comparisons with New Zealand, Canada and the United States, for example, further emphasise this need. In each of these countries the gap between the health of indigenous and non-indigenous people is much smaller than in Australia.6 Australia is the only First World country that has failed to make real progress in indigenous health (see Ring and Firman)7. Substantially greater investment in research into health services for indigenous people is required. The epidemiology of many areas of indigenous health has been investigated, but there is now a need for a change in research emphasis. We know far too little about the most cost-effective way of delivering culturally appropriate health services to indigenous communities. Certainly, any policy involving a substantial increase in resources should have a major evaluation component built into it. The resource burden on all Australians of investing more in the health of Aboriginal and Torres Strait Islander people is small, simply because they are few in number and there are, by comparison, large numbers of non-indigenous people. Redeploying about 1% of the healthcare budget would increase spending on indigenous health services by about 50%, and could be achieved with very little health sacrifice for non-indigenous Australians (given the low return on the margin of some of the services currently provided). Can such a redeployment not be justified? Put more starkly, the question is: what price a national disgrace? Gavin H Mooney Virginia L Wiseman Stephen Jan
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- Gavin H Mooney
- Virginia L Wiseman
- Stephen Jan