7 October 2020
Investment in health is critical to deliver better health outcomes and contribute to the economic recovery – boosting productivity and jobs creation.
Peter Van Onselen: Across the Australian healthcare sector the workforce has shown incredible resilience. A debt of gratitude is certainly owed to frontline health and Aged Care workers who have supported the country's response to COVID-19. Investment in health is critical to deliver better health outcomes and contribute to the economic recovery, boosting productivity and jobs creation. In this episode of the PwC Federal Budget Podcast, we look at the budget's health announcements and we delve into how it supports much needed longer term reform of the sector. My name is Peter Van Onselen and you're listening to the PwC Federal Budget Podcast.
I'm joined now by Sarah Butler, Health Leader for PwC. Thanks so much for your time. Obviously in the context of COVID there's so much focus on the health sector but getting specific to the budget and what in terms of health announcements I suppose is within it. What's your broad take from what we've heard from Josh Frydenberg?
Sarah Butler: Well as you say COVID-19 has very much put health front and centre. We do owe our frontline health and Aged Care workers a debt of gratitude for all they've been doing over the last six months. So the budget was a lot going on across the health sector. We've already spent $16 billion during COVID in terms of response and there were a number of new commitments.
I think the things that were interesting to me was some of the commitments around Aged Care, around mental health, around manufacturing workforce, and already prior announced some of the sustained investments around Telehealth.
Peter Van Onselen: And getting straight into what the impact is on business but in particular on PwC clients public sector as well as private sector. What are the main take outs that you saw on that front?
Sarah Butler: Well we've seen sort of through the crisis health has been a relatively resilient sector but there have been very different impacts on different subsectors. So we've seen some of the sectors have been very much a new normal, lots of focus during COVID and there'll be sustained focus in the future.
And if I pick out a couple of those Telehealth would be one and mental health would be a second one. So on Telehealth we've seen 30 million consultations over the last six months, which have moved to Telehealth channels supported by federal spending. Commitments around sustaining that investment over the next six months. We're now starting to look at how we actually sustain sort of telehealth virtual health digital health much more broadly across the broader healthcare sector.
So any players who are participating in telehealth lots of upside opportunities but also for all players across the whole sector we're seeing opportunities to revisit sort of ways of working, different approaches, how we can embed telehealth or digital health or virtual health much more broadly into kind of what's what's being done. And that applies across both the public sector clients that we have as well as the private sector clients and lots of different sectors.
Peter Van Onselen: It's really interesting to hear you say that around Telehealth is the sense that the impact of COVID-19 in terms of the way people were forced to socially distance seems to do business or a lot of working from home. Has that accelerated what was already a move towards telehealth or is it completely shifted towards that where there was little focus on it beforehand?
Sarah Butler: We've been talking for a long while about how we could reimagine health into the future and digital health has been a big part of what we saw as part of the future of health. So COVID has very much accelerated changes that should have happened and quite frankly many many years ago but it's been a great opportunity to accelerate some of that change and look at how we can sustain it going into the future.
So the Federal Health Minister will talk about accelerating a decade's worth of reform into a few short weeks. I think what we've seen happening during COVID is a few things. One is there's been funding support so that's been a big enabler to people adopting Telehealth. Two, there's been a change in consumer behaviour. So individuals have not wanted to go in for a face to face consultation they wanted to be able to be in a more protected environment socially distanced so they've had that appetite to be able to do things through Telehealth.
And the third change has been around clinicians also adopting new different approaches and technologies which again can allow them to deliver good patient outcomes but do it in a safe way. So something that's been important during the initial response stage in COVID has now got us much more used to working in different ways accessing health services in different ways and we do think that is something that will be sustained into the future.
So the step now is how do we embed it. How do we think about sustainable funding models, how do we think about cyber protections, how do we think about privacy, how do we think about changing our kind of models of care so we fully embed the potential of Telehealth in different forms of virtual care into the future of health.
Peter Van Onselen: Was there much in the budget about some of those questions that are still yet to be fully answered going forward?
Sarah Butler: So what was highlighted in the detail in the budget was an extension of another six months for some of the funding support for Telehealth services and then also flagged within that period that we actually need to take a bit of a step back and think about what that longer term model is and deal with some of the more structural issues around it. So two specific announcements one around the extension of funding and secondly around the commitment to look at how we embed this into our future healthcare system.
Peter Van Onselen: And we know that broadly the budget has a real focus on growth job creation productivity a lot of these adjustments you're talking about particularly in the telehealth space they really do seem to lend themselves towards that.
Sarah Butler: Very much so and I think it was good to see some of the investment around innovation and R&D tax incentives on that front. The other thing I think is interesting is beyond the digital health space is also some of the around manufacturing. So one of the other areas that we've seen sort of through the crisis is we have a lot of dependency on whether it's medical devices or whether it's pharmaceuticals coming from offshore.
We had a whole focus in the first months around PPE looking at ventilator production and so on. So that kind of focus in the budget around looking at localisation and manufacturing and supply chain the one point five billion dollars going into different sectors around manufacturing is also something that we see of significant benefit on the health side.
Peter Van Onselen: You also mentioned mental health and we've seen significant investment there for understandable reasons in the context of the impact of the pandemic but it's also exposed the need for investment in that space - a lot of commentators have suggested that was already there before code. What are your thoughts on what we've seen in the budget on that front?
Sarah Butler: So mental health is an absolutely critical issue for all of us here in Australia. It's the number one chronic condition that many Australians face and a very serious issue which has had increasing focus over the last years and significant focus even before COVID in terms of what we can do to invest in better outcomes and think more holistically around people's mental health.
So what we heard in the budget was since March we've had seven million Medicare subsidised services for mental health. We're seeing about $5.7 billion dollars spend this year going into mental health and increased funding going into different areas. So expanding the better access initiative for psychological services. Previously you could get funding for about 10 services. Now you can get funding for double that to at 20. An increased funding for some of the some of the helplines and support services that are in place around mental health.
So I think a step up around commitment on investment and a recognition that this is a really serious issue for us as a country overall. It was already serious beforehand. We had the bushfires and that added significant stress and heightened challenges around mental health. And then through the COVID period with people being wary about sort of impacts on their lives and on their livelihoods kind of a big impact coming through from COVID.
So it is an issue that's critical for us to address. And looking at the right way through what can we do on prevention what can we do on early identification and getting people into the right treatment pathways, what can we do to help people recover and provide broader support for them so they can get back on their feet and get back to their lives and be able to tackle what's a very very serious issue.
Peter Van Onselen: And beyond some of the reforms in the what you might call the virtual health space what other sort of reforms do you either see in the budget or would you like to see perhaps in future budget when it comes to necessary longer term reform in the sector?
Sarah Butler: So one area that we should talk a bit more about is Aged Care there was some positives in the budget around already having spent $1.6 billion during COVID an additional $1.6 billion being committed for 23,000 more home care packages and we think that's really really important it's a very good first step but there's much more that needs to be done.
Aged Care was already a sector that was in crisis before we went into COVID. We had sort of big gaps around being able to deliver the right level of care that was part of the initiative behind kicking off the Royal Commission into Aged Care quality and safety.
We saw the interim report of that and the final report is going to come out next February. So already a pre-existing set of challenges around being able to deliver high quality care consistently to different residents in an Aged Care setting.
We also saw a real need to start to shift care to different types of settings so people can stay in their homes for a lot longer. If you talk to people about 70% of people want to be in the homes towards the end of their lives then only about 10% of people are.
So how can we actually support people to be able to stay in the homes and get the right level of care in their homes. So I think the budget commitments around providing additional homecare support packages were very good but there's still a long waiting list, there's more that needs to be done.
So I think we'll be looking forward to what comes out after the Aged Care Royal Commission report is launched in February there were commitments in the budget around a very active response to taking on board those; recommendations significant additional funding and investment that would need to go into that.
So I think we'll go to be sort of watching that space for what comes out in February and looking forward to future commitments of funding into the Aged Care sector and broader reform in the sector
Peter Van Onselen: The timing is really interesting because this is a late budget being in October, as you mentioned you then have that final report around the Aged Care Royal Commission in February but then of course the next budget will be suddenly upon us in May.
Where does that leave you with your thinking about the sort of things you'd like to see get more focus perhaps when it comes to the May budget 2021 as the follow from this significant budget.
Sarah Butler: So I think part of it will be building on some of the initial steps that we've seen in this budget. So certainly Aged Care you would expect to see a lot more funding coming in the follow up budget to this, so good first step but more to be done.
Mental health I think will continue to be an area where more focus is needed. Additional funding is needed and support around that. And what was mentioned in the budget was we're going to see in the next few weeks the launch of the Productivity Commission final report into mental health.
We're going to have the interim report into suicide prevention so there'll be a set of recommendations coming out from those reports that would need to be factored in, in terms of future funding commitments and broader reform agendas.
I think across each of those, looking at opportunities around to shift towards more digital health, a shift towards more care in the home that can be an enabler of better delivery of services in each of these different sectors whether it be Aged Care or mental health.
So I think more to be done on each of those and we would expect to see sort of continued investments being made into those sectors. I think some of the other areas that we've been looking at is around workforce. We did some modelling work a couple of years ago of what was the gap in our workforce to meet the needs of an aging population and found that we needed about 400,000 more Aged Care workers by 2040 just to look after people in the current sort of construct across the industry and significant investment in CapEx and OpEx into the sector.
How do we really think about workforce needs of the future? What's that investment into attracting people into the sector? How can we redesign roles so people can work at the top of their license and skillset and how do we think about that investment in the broader workforce?
So we did see some announcements in the budget this time around some of the commitment to additional places in higher education, some of the commitments around providing training for instance on dementia training. But I think we need to see continued focus on investment and workforce skills. It's a great opportunity as well, if you think about job creation and the benefits for the economy more broadly there's going to be lots of ongoing needs around health and Aged Care. So how do we invest in skills of the future and workforce of the future
Peter Van Onselen: Sarah I’ve got to ask you about the vaccine. There's so much predicated on it in the budget numbers. What's the supply chain look like? What is your concern in relation to this being able to be rolled out?
Sarah Butler: So the good news on vaccines is there’s about 150 candidates for vaccines in development around the world and Australia's been playing its part as well in terms of innovation.
So there are a lot of different options that are out there. Federal Government has secured access to 80 million doses of a vaccine if one is developed and is successful around that. So we're putting in place kind of the groundwork around being able to have access to a vaccine if and when one becomes available.
I think the other thing that's been happening is a lot of focus beyond vaccines on different diagnostics, testing, therapeutics, so even if you do have COVID you can have better treatment pathways the more chance of recovery.
So a combination of vaccines, diagnostic, therapeutics is likely to be part of the solution going forward. The one other area that I would highlight goes back to some of the announcements made around manufacturing and support within the $1.5 billion dollars committed to manufacturing for medical products. There is a really good opportunity for us in Australia to look at investing in local supply chain, innovation, manufacturing capabilities across pharma. And it's an opportunity for us both for resilience but also in terms of delivering better health outcomes and also economic benefits
Peter Van Onselen: Sarah Butler health leader for PwC, clearly and unsurprisingly a lot in the health space to come out of the 2020 budget in the context of COVID. Thanks so much for your time.
Sarah Butler: Thanks very much.
Peter Van Onselen: Thank you for listening to the PwC 2020 Federal Budget podcast. We hope you enjoyed our commentary. For additional in-depth analysis head over to wc.com.au/federalbudget where you will find articles and information about the 2020 Federal Budget and what it means for the economy, our society and you.
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Chief Economist & Partner, PwC Australia
Tel: +61 (2) 8266 4611
Partner, National Health Leader, PwC Australia
Tel: +61 2 8266 5091