NSW Treasury has foreshadowed a report on rising health expenses with the release of a research paper which is part of a five-year projection program measuring long term growth.
According to Treasury, its 2016 NSW Intergenerational Report (IGR) projected health expenses to be the largest driver of long-run expense growth for NSW.
It said the 2016 IGR projected health expenses would grow from 28 per cent of total expenses to 36 per cent by 2056 in the absence of policy intervention.
“This reflects the pressures of an ageing population, and non-demographic factors such as advancements in health technology and expectations for more and improved health services over the next 40 years,” Treasury said.
“Reorienting the health system to effectively and efficiently target prevention and early intervention can improve health outcomes, alleviate the fiscal impact of population ageing and lift economic participation and productivity,” it said.
“Healthier people are more likely to live longer, productively participate in the economy, and actively contribute to the community.”
Treasury said that while Australians enjoyed a high life expectancy, the State was faced with the challenge of a rising burden of chronic disease.
“Chronic diseases can become more serious over time and increase a person’s demand for health services later in life,” the Department said.
It said the Research Paper reviewed the approach to health expense projections in Treasury’s Long-Term Fiscal Pressures Model (LTFPM) and proposed a refinement to better reflect recent trends in the proportion of years spent in good and poor health as people aged.
Treasury said the proposed methodology and projections contained in the Research Paper were preliminary and would be finalised in the 2021 IGR to be released in early this year.
NSW Treasury’s 28-page Research Paper can be accessed at this PS News link.
