Comprehensive Analysis of Healthcare Expenditure and Its Determinants

This essay delves into the multifaceted realm of healthcare expenditure, meticulously analyzing its various dimensions and underlying drivers. It begins by defining healthcare expenditure and its significance in national development, then examines the primary reasons for its rise, including the increasing prevalence of chronic physical health disorders like cardiovascular diseases. The analysis explores the role of lifestyle factors, such as smoking, obesity, and poor nutrition, in exacerbating these disorders and subsequently increasing healthcare costs. It also highlights the impact of improved medical interventions, such as statins, on increasing life expectancy and the associated financial implications. Socio-economic factors, including age, income, and insurance costs, are discussed as influential elements. The essay further investigates out-of-pocket expenses, government spending, and the need for lifestyle changes and chronic disease management plans. Finally, it provides recommendations for public awareness, health literacy, and government investment to mitigate rising healthcare expenditure and improve patient outcomes. The document is a comprehensive analysis of healthcare expenditure, its drivers, and potential solutions, offering valuable insights for students and researchers alike.

HEALTHCARE SYSTEM
EXPENDITURE
-Submitted by:

What is healthcare
expenditure?
 Healthcare expenditure can
be defined as the amount of
money spent over primary
healthcare resources and
other causes that directly
impact the quality of health
of the people within a
community.
 Health forms an integral
component that positively
contributes to the
sustainable development of
a nation.

 Ageing
 Longer life expectancy
 Chronic illness
 Unhealthy lifestyle
 Epidemiology of diseases
Primary reasons contributing to
rise in healthcare expenditure:

 Increased prevalence of chronic physical health disorders such as
cardiovascular disorders has aggravated the cumulative
healthcare expenditure.
 As per the research report presented by the Australian Bureau of
Statistics, Ischaemic heart disease has been reported to be the
leading cause of mortality within the Australian continent 3.
 The research report further estimates 19,777 deaths out of the
total 159,052 deaths in Australia occurred due to cardiovascular
disorders in the year 20152.
Drivers of healthcare
expenditure:

 Cadiovascular disorders refer to the physical health
condition where the blood vessels supplying blood to
the heart are affected, predominately due to deposition
of fat and cholesterol.
 Unhealthy lifestyle factors such as smoking, obesity,
hypertension and poor nutritional intake deficit in
important nutritional substances over the years lead to
cardiovascular disorders.
 The disorder requires care across multiple dimensions
depending on the severity which includes assistance
from a dietician, physician, nurses and other care
professionals which enhances the healthcare
expenditure and adds to the disease burden.
Cardiovascular disorders-The
disease burden

 Improved medication such as statins and
anti-thrombolytic facilities has improved life
expectancy of patients which has increased
the proportion old age population living with
CVD. This has subsequently affected the
cumulative healthcare expenditure as the
expenditure per person is higher among the
elderly.
Present Scenario:

 Socio-economic factors such as age, sex, race,
annual income, education level and marital
status affect access to healthcare.
 Accessory healthcare expenditures include
over the counter medication, community
healthcare expenditure, capital expenditure
and non-admitted patient hospital services4.
 Other charges could be amount spent on
infrastructure, product and appliances and
follow up services and each one of these
factors affect the overall cost of the disease
Socio-economic factors
affecting health care:

 The second driving factor that has led to an increase in the overall health
expenditure would be the rising cost of premiums in the health insurance
policies.
 This could be attributed to the rise in healthcare costs and advanced
medicine used to treat the complex disorders.
Second driving factor for overall
health expenditure:
(Source: Sav et al. 2013)

 The out of pocket expenses cannot be aligned to a disease but include add
on charges such as follow up services, over the counter medication and
other referral services that are recommended to a patient.
 Out o pocket expense also include residential care, child care, home care
facilities, community services and travel cost.
Out of pocket expenses:

 The Australian government invests $ 8.8
billion which accounts for 11.1% of the total
spending for patients admitted to hospitals1.
The amount spent is still insufficient to alter
the plight of patients suffering from CVD as
it still remains the leading cause of death in
Australia.
Present economic status:

 Lifestyle changes at individual level could
prevent the onset of the disease.
 Introduction of chronic disease management
plan which would help people receive
preventive services by allowing high deductible
insurance plans to cover charges before
meeting the deductibles.
 Public awareness, health literacy to motivate
people make healthy lifestyle changes
 Government could invest more on advanced
medical expenditure
Recommendations:

Abs.gov.au. 2019. "3303.0 - Causes Of Death, Australia,
2015". Abs.Gov.Au.
https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/3303
.0~2015~Main%20Features~Ischaemic%20Heart%20Disease~10001.
Callander, Emily J., Lisa Corscadden, and Jean-Frederic Levesque.
"Out-of-pocket healthcare expenditure and chronic disease–do
Australians forgo care because of the cost?." Australian Journal of
Primary Health 23, no. 1 (2017): 15-22.
Malik, Arunima, Manfred Lenzen, Scott McAlister, and Forbes McGain.
"The carbon footprint of Australian health care." The Lancet Planetary
Health 2, no. 1 (2018): e27-e35.
Sav, Adem, Elizabeth Kendall, Sara S. McMillan, Fiona Kelly, Jennifer A.
Whitty, Michelle A. King, and Amanda J. Wheeler. "‘You say treatment, I
say hard work’: treatment burden among people with chronic illness
and their carers in Australia." Health & social care in the
community 21, no. 6 (2013): 665-674.
References:

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