Health system expenditure on
disease and injury in Australia:
Presentation to OECD Meeting of
Health Accounts Experts / 29-30
Sept 2005
Mr John Goss
Principal Economist
Australian Institute of Health
and Welfare
Australian Institute of Health and Welfare
Overview of talk
Methods (including SHA adjustments)
Results
Uses of disease expenditure data,
including linking of inputs, outputs and
outcomes
2
Australian Institute of Health and Welfare
Disease expenditures
A type of satellite account which splits
expenditure
– By disease,
– By age-sex, and
– By utilisation
3
Australian Institute of Health and Welfare
Disease expenditures
Data for Australia for 1993-94 and
2000-01 have been published
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Australian Institute of Health and Welfare
Disease expenditures
A top down approach to allocation of
expenditure to disease.
Advantage if that everything adds to 100 per
cent
Disease groups err on the side of largeness
Total expenditure using disease expenditure
estimates from disease groups is much
larger than total health expenditure
5
Australian Institute of Health and Welfare
Australian disease expenditure
database for 2000-01; Age groups
0-4
5-14
15-24
25-34
35-44
45-54
55-64
65-74
75-84
85+
6
Australian Institute of Health and Welfare
Australian disease expenditure
database for 2000-01
Disease expenditures are according to the
176 burden of disease categories.
This enables integration of inputs, outputs
and outcomes
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Australian Institute of Health and Welfare
Burden of Disease chapter headings
replaces ICD chapter headings as a
means of presenting expenditure at the
aggregate level.
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Australian Institute of Health and Welfare
Differences from ICD chapter structure
Oral health is a major expenditure (7% of
total) so it is advantageous to separate it
from the Digestive chapter.
Diabetes is a major and growing
expenditure; Therefore separating
diabetes from the Endocrine chapter is of
advantage.
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Australian Institute of Health and Welfare
Dementia is in the ICD Mental disorders
chapter.
Alzheimer’s disease & other specific
diseases causing dementia is in the ICD
Nervous system chapter
More logical to group all dementias
together in the Nervous system chapter.
Sense disorders is also a major
expenditure item and is separated from
other nervous disorders.
10
Australian Institute of Health and Welfare
Methods & data sources
Hospital morbidity
Diagnosis Related Group (DRG) weights but
also
– adjust for length of stay
– adjust for cost of hospital varying from
State average
– include private medical services
provided in hospital
11
Australian Institute of Health and Welfare
General Practitioner (GP)
pharmaceuticals and encounters
$ & no. of encounters & type of drugs
come from Medicare Benefits Scheme
(MBS) & Pharmaceutical Benefits
Scheme (PBS) data.
Pattern of scripts written by disease from
1999 to 2001 BEACH data base of GP
encounters with patients (300,000
encounters)
12
Australian Institute of Health and Welfare
Specialist drugs and attendances
– Specialist script dollars and type of
drugs from PBS
– Pattern of drugs by disease from
BEACH
– Referrals to specialists from
BEACH used to allocate out of
hospital specialist dollars and
encounters.
13
Australian Institute of Health and Welfare
Areas of expenditure not
allocated by disease
Community mental health included, but
rest of community health is not.
Public health. Cancer screening
programs included but rest of public
health is not.
Aids & appliances not included
Patient transport not included
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Australian Institute of Health and Welfare
Areas of expenditure not
allocated by disease and age-sex
Administration not included
Overall of the $51.1 billion of personal health
services & goods expenditure, 94% or $48
billion is able to be allocated by disease and
age-sex. Includes hospital services, medical
services, pharmaceuticals, aged care
homes, dental and other health professional
services
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Australian Institute of Health and Welfare
Millions of dollars by SHA categories by age
group
0-4
5-14
15-24
25-34
Personal health care services
1,027
1,290
1,440
1,411
In-patient and day care services
502
249
438
547
Out-patient services
506
988
909
743
Home care
..
..
..
..
Ancillary services to health care
19
53
94
122
Medical goods dispensed to out-patients
154
188
229
306
Pharmaceuticals and other med. non-durables
154
188
229
306
Therapeutic appliances and other med. durables
..
..
..
..
Male
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Australian Institute of Health and Welfare
Total cost of disease by health sector for
National Health Priority Areas, Australia,
2000-01, ($millions)
Diabetes mellitus
Neoplasms
Mental disorders
Asthma(d)
Injuries
Musculoskeletal
Cardiovascular
$0
$1,000
$2,000
$3,000
$4,000
$5,000
Hospital and aged-care homes(b)
Pharmaceuticals
Medical and other health professionals(c)
Research
$6,000
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Australian Institute of Health and Welfare
Health expenditure per person by age
and sex, Australia, 2000-01
$18,000
Male
$16,000
Female
$14,000
Female (not maternal)
$ per capita
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
0–4
5–14
15–24 25–34 35–44 45–54 55–64 65–74 75–84
85+
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Australian Institute of Health and Welfare
Health expend per person by age
& area of expenditure, 2000-01
$16,000
Total hospital
$14,000
Aged care homes
$ per person
$12,000
Out-of-hospital medical
Total pharmaceuticals
$10,000
Total expenditure
$8,000
$6,000
$4,000
$2,000
$0
0–4
5–14
15–24
25–34
35–44
45–54
55–64
65–74
75–84
85+
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Australian Institute of Health and Welfare
Utilisation data
As well as dollars by disease we also have
utilisation by disease. So for admitted patient
hospital services we have number of DRG
weighted discharges from hospital. For
medical services we have number of
services. For pharmaceuticals we have
number of scripts.
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Australian Institute of Health and Welfare
Uses of disease costing data
Gives details of changes in expenditure,
which leads to understanding of drivers of
expenditure.
Drivers are different for different age groups
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Australian Institute of Health and Welfare
Change in real per capita pharmaceutical
expenditure, 1993-94 to 2000-01, All persons
Other
$560m
76%
$500.00
$650m
74%
Other contact
Injuries
$400.00
Nervous
$490m
58%
$300.00
$200.00
$35m
17%
$100.00
$120m
37%
$2,500m
61%
$465m
74%
$235m
53%
Digestive
Respiratory
Genitourinary
Infectious
Diabetes
Endocrine
$0.00
Cardiovascular
-$12m
-12%
-$100.00
Person
5–14
Neoplasms
15–24
25–34
35–44
45–54
55–64
65–74
75+
All
people
Mental
Musculoskeletal
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Australian Institute of Health and Welfare
Uses of disease costing data
Age-sex-disease data, and understanding
drivers of expenditure very useful for
projections, as can make estimates based
on expected disease declines
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Australian Institute of Health and Welfare
Decomposition of change in expenditure
2001 to 2031 for CVD treatment
$ million
$5,000
0
$4,000
$3,000
Price
$2,000
0
0
Volume per case
0
$1,000
$0
Change in total
expenditure
0
0
0
Disease rate
Population
-$1,000
-$2,000
Ageing
-$3,000
2006
2011
2016
2021
2026
2031
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Australian Institute of Health and Welfare
Uses of disease costing data
Disease costing data is best way to solve
issue of link between inputs, outputs and
outcomes
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Australian Institute of Health and Welfare
Linking inputs, outputs and
outcomes
INPUT
(dollars)
OUTPUT (hospital separation,
medical service, pharmaceutical script)
OUTCOME Attributable change in health status
(DALYs)
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Australian Institute of Health and Welfare
Uses of disease costing data
I will illustrate the link between inputs,
outputs and outcomes with cardiovascular
(circulatory) disease
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Australian Institute of Health and Welfare
Age-standardised death rates for
major causes of death, 1922–2000
Infectious and parasitic diseases
Other diseases
Respiratory disease
Injuries and poisoning
Circulatory disease
Cancer
Male
2,000
1,800
Infectious and parasitic diseases
Other diseases
Respiratory disease
Injury and Poisoning
Circulatory disease
Cancer
Female
2,000
1,800
1,600
1,600
1,400
Deaths per 100,000
Deaths per 100,000
1,400
1,200
1,000
800
600
1,200
1,000
800
600
400
400
200
200
0
1922
1934
1946
1958
1970
1982
1994
0
1922
1934
1946
1958
1970
1982
1994
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Australian Institute of Health and Welfare
Life expectancy OECD countries 1970 to 2003
84
82
80
78
76
LE
Denmark
74
United States
United Kingdom
72
70
Australia
68
66
64
1973
1977
1981
1985
1989
1993
1997
Japan
Sweden
Canada
Australia
France
Norway
United Kingdom
United States
Denmark
Switzerland
Iceland
2001
Year
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Australian Institute of Health and Welfare
Life expectancy
OECD countries 1970 to 2003
84
82
80
78
LE
76
Japan
74
Sweden
72
Australia
70
France
68
Switzerland
66
Iceland
64
1973
1977
1981
1985
Year
1989
1993
1997
2001
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Australian Institute of Health and Welfare
Reasons for decline in coronary heart
disease in Australia
Reduction in smoking
Reduction in high blood pressure due both to
lifestyle changes and drug treatment
Better treatment - better care by GPs and
specialists, better ambulance services, coronary
bypass, stents etc
Possibly better blood lipids due to better diet and
hyperlipidemic agents
Other factors
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Australian Institute of Health and Welfare
Reasons for decline in coronary heart
disease in Australia
Most of the expenditures driving this
decline are included in the disease
expenditure data base
Therefore the decline can be attributed
to these expenditures
There is debate about which part of
health sector responsible for which
parts of decline
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Australian Institute of Health and Welfare
Change in real per capita pharmaceutical
expenditure, 1993-94 to 2000-01, All persons
Other
$560m
76%
$500.00
$650m
74%
Other contact
Injuries
$400.00
Nervous
$490m
58%
$300.00
$200.00
$35m
17%
$100.00
$120m
37%
$2,500m
61%
$465m
74%
$235m
53%
Digestive
Respiratory
Genitourinary
Infectious
Diabetes
Endocrine
$0.00
Cardiovascular
-$12m
-12%
-$100.00
Person
5–14
Neoplasms
15–24
25–34
35–44
45–54
55–64
65–74
75+
All
people
Mental
Musculoskeletal
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Australian Institute of Health and Welfare
Cardiovascular pharmaceutical expenditure in
2000-01
Lipid
lowering
drugs
Antihypertension
agents
Prevention
$864m
87%
$696m
80%
Treatment/
prevention
for those
with disease
$132m
13%
$170m
19%
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Australian Institute of Health and Welfare
Recommendation
Disease expenditures should be split
into treatment, preventive and
maintenance/ long term care
components wherever possible
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Australian Institute of Health and Welfare
Change in per capita admitted patient
expenditure, 1993-94 to 2000-01, All persons
Other
$1,200.00
Other contact
$1,000.00
Injuries
Nervous
$800.00
Digestive
$600.00
Respiratory
Genitourinary
$400.00
Infectious
Diabetes
$200.00
Endocrine
$0.00
Cardiovascular
Neoplasms
-$200.00
Person
5–14
15–24
25–34
35–44
45–54
55–64
65–74
75+
All
people
Mental
Musculoskeletal
36
Australian Institute of Health and Welfare
Real per person increase in admitted patient
expenditure for cardiovascular disease, 1994 to 2001
45-54
0%
55-64
-2%
65-74
7%
75+
25%
Total
22%
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Australian Institute of Health and Welfare
Input outcome linkage
We can look at the increase in real
expenditure for cardiovascular disease
from 1993-94 to 2000-01 and compare
it to change in Disability adjusted life
years (DALYs) lost due to
cardiovascular disease from 1996 to
2003
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Australian Institute of Health and Welfare
Input outcome linkage
This is a very good efficiency measure.
The calculations have not yet been done as
2003 burden of disease estimates have not
been completed, but it is clear from the
reduction in cardiovascular deaths that the
extra cardiovascular expenditure (35%
increase) from 1994 to 2003 has returned
many DALY benefits
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Australian Institute of Health and Welfare
Input outcome linkage
We can do these calculations for other
areas as well. Eg for cancer. For 199394 we calculated that the average cost
of treatment for lung cancer was
$26,000 per DALY averted. For breast
cancer the average cost was $3,000
per DALY averted.
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Australian Institute of Health and Welfare
Input outcome linkage
For an area like dementia there have
been no DALY gains in the period 1994
to 2001, so we can’t use change in
DALYs compared to change in dollars
as efficiency measure.
But we can measure change in real
costs of care per person with dementia
41
Australian Institute of Health and Welfare
Other uses of linking disease
expenditure data to outcomes
‘What if’ questions can be answered?
What if smoking rates are reduced by 5
percentage points?
What will be consequences over time on
Disease incidence
DALYs
Hospital, medical & pharm utilisation
Health system costs
Commonwealth funding
42
Australian Institute of Health and Welfare
Future work in disease
expenditure
Estimating disease expenditure for
2003-04 financial year
Linkage to epidemiological data in the
forthcoming 2003 burden of disease
data base
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Australian Institute of Health and Welfare
Future work in disease
expenditure
Source of funds (Australian
Government/State government/private)
estimates will be made
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Australian Institute of Health and Welfare
Publications are downloadable
from web
http://www.aihw.gov.au/bod/expenditur
e/index.cfm
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Australian Institute of Health and Welfare
Finis
Thank you
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