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Going for broke

Three quarters of baby boomers are worried they will not be able to afford healthcare as they grow older, courtesy of the economic crisis. Beverley Head reports.

A survey of 6000 Australians between the ages of 45 and 64 took place between May and July this year, followed up by a further study of 1000 people in October as market conditions continued to deteriorate. Commissioned and analysed by Fujitsu Consulting, and released in November, the survey found that although 6 per cent of respondents claimed to be “very worried” about their ability to afford health care in the middle of the year, by October that had soared to 40 per cent.

According to Jeff Smoot, health industry director for Fujitsu Australia, more than 57 per cent of the sample had no private health insurance. According to Martin North, managing consulting director of Fujitsu Consulting, the survey showed people consider paying insurance on their car a higher priority than paying for health insurance. With more than four million people without, or unable to afford health care insurance, much more pressure will be placed on the public healthcare system. “This is a traffic accident waiting to happen,” said North.

One of the report’s recommendations is that older Australians need to be better educated about how much superannuation they need to fund what may prove to be 30 years of retirement. It might also be necessary to increase the statutory superannuation contribution and develop new hybrid savings and health insurance products to ensure people were better prepared to fund their needs in old age.

While the report’s findings in part reflect the current economic conditions which have prompted a plunge in value of many people’s investments, it reinforces a trend Fujitsu first uncovered last year when it investigated older Australians’ attitude to saving for old age and investing in health care insurance. That study found that there was a real lack of focus on super and health care. “People are starting to spend their super on themselves, not leaving much for their children or setting it aside for healthcare,” said Smoot.

The report pointed to the need for a rethink on how health policy and spending is directed. “The focus needs to be on how to keep them well, not treat them when they are sick.”

Smoot agreed that education about the issue should be improved, and much more emphasis placed on preventative medicine, which would require a wholesale restructuring of the funding mechanisms and models for healthcare by both government and insurance companies. Fujitsu said that at present only a handful of the 15,000 reimbursement codes under our Medicare system are for preventative care.

“However, if our healthcare system shifted a small percentage of spending into preventative programs, overall healthcare costs would fall dramatically.”

Also speaking at the launch of the new report in November, Rod Young, CEO of the Aged Care Association of Australia, said that in the UK investment in preventative care was substantially greater. “They put into a person’s dwelling as much technology as they can to lighten the load on the health care system proper.”

Technology could be harnessed more effectively to improve preventive care, to provide better community care, mobile patient management and remote management – but would demand access to high bandwidth communications networks, and a range of new Medicare reimbursement codes so that services could be offered remotely, said Smoot.

Compounding the need for more technologically rich healthcare solutions was the dwindling supply of people available to service the needs of a rapidly ageing population. “We struggle to get the workforce we need now. By 2020 it will be dire,” said Young.

This again should focus efforts on redefining how healthcare is delivered, according to Fujitsu. The report notes that there ought to be greater user of health practitioners other than doctors and more community programs. “This may also mean that funding needs to change from acute care in hospital to local care in the community.”

Dr Dianne Bell, chief executive of the Australian College of Health Service Executives, said the average age of healthcare workforce professionals was around 50, and that finding new workers, particular in rural and remote areas was an acute problem.

Young said that the problem was one faced by many nations, and China would be particularly vulnerable given its single child system. “They get to our position in 30 years,” he warned.

While voluntary carers currently played an important role, Young pointed to Access Economics modelling which showed that the population of volunteers available to provide support to older people is expected to shrink quite significantly from 2017 onwards.

According to Fujitsu the findings of the survey demonstrate the need to; “radically transform healthcare in Australia to prevent illness in the community, leverage emerging technology and clarify the roles and responsibilities of key industry players.”

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