• Open Access

Closing the 17 year gap means opening not just the Treasury coffers but our hearts


Correspondence to:
Gavin Mooney, Social and Public Health Economics Research Group, Curtin University, GPO U1987, Perth, Western Australia 6845. Fax: 08 9266 2608; e-mail: g.mooney@curtin.edu.au

The Rudd government's commitment to closing the 17 year gap in life expectancy between Aboriginal and non-Aboriginal Australians is most welcome.1 It sends out the right signals to all Australians and, indeed, people across the planet that the soul of Australia lives and that the ethos and the ethic of the ‘fair go’ are alive and well. At long last Indigenous people – 41 years after the 1967 Referendum2 which on paper at least gave Aboriginal people equal citizenship rights – are to be given a real chance to be equal. It is a moment worth savouring especially coming so soon after the Prime Minister's apology to the Stolen Generations3 (those Aboriginal children who over many decades up until the 1970s were forcibly removed from their parents) on 13 February this year.4

The government's commitment means many things for public health practitioners, not least the need for a commitment on our part to come to the aid of the government in addressing the question: how best can we as a nation close this gap?

First, while money cannot in itself close the gap, without a major input of resources, little will happen. Second, the gap will not be bridged by health service dollars alone. There needs to be a whole of government, whole of society, holistic approach. Third, on grounds of both equity and efficiency, the government must recognise that it is committed to spending what could turn out to be many billions of dollars. Fourth, Indigenous culture is an important social determinant of health for Indigenous people.

In considering what sort of investment is going to be needed, a strategy must be developed. Most often the way that issues of resource allocation are considered in health care is according to some formula based on ‘need’, where need is defined in terms of sickness. Thus, other things being equal, if one group has twice the sickness of another, then the former would get twice the resources of the latter. This is the thinking underlying the RAWP style formulae5 which have dominated thinking in health services in many countries including Australia since they were devised in England more than 30 years ago. It is the thinking underlying the AMA6 assessments of the resources needed in Indigenous health.

In seeking to close the gap however, this approach won’t do. It embraces two concepts that do not apply in this context: first, that equity is based on some notion of equality across ‘likes’, such as equal access for equal need; and second, that ‘fair’ allocations are ones which are pro rata with the size of the problem. Whatever else, the 17 year gap shows we are not dealing with equal need. That notion – horizontal equity – is simply not relevant. What is needed is vertical equity: unequal but equitable access for unequal need. This formulation is much more difficult to handle. It requires us to consider how unequal a 17 year gap is and how big (in terms of allocating extra dollars) our response should be to that gap.

On the second concept, what is needed is to allocate not on the basis of the size of the problem but to deploy additional resources to the best buys to close the gap.

That shifts the grounds of the logic and will result in a much larger spend than horizontal equity would suggest. Such ‘vertical equity’ is based on the extent of willingness of government and, in turn, the citizens of Australia to pay for a gain of one year in life expectancy for an Indigenous person as compared to a non-Indigenous person. The limited evidence available on this in Australia suggests the answer is ‘more willing’.7 Again, quite why people are prepared to pay more is not clear. It may be because of some simple notion of ‘diminishing marginal value of years of life’, in essence that society is willing to pay more for an extra year of life at age, say, 50 than at, say, 80. It may be simply compassion; the more compassionate a society the more it will be prepared to pay for the same nominal gains to the less well off. Whatever, these issues must be added to the public health research agenda.

What is thus required is to move to allocating resources based on ‘capacity to benefit’. The philosophy of best buys requires us to ask: where and how can we invest as a nation to get the best return in closing the gap? In a discussion with WA Indigenous leaders8 (and it is crucial in all of this that it is the voices of Indigenous people who drive this process), they indicated a clear preference for adopting the idea of need as capacity to benefit ahead of need as amount of sickness. They also argued that the marginal returns to investing in such capacity to benefit would be greatest through environmental health investments – water, sewage, etc, – with social interventions as the next best investment and those addressing individual behavioural issues coming last. Such ordinal rankings provide a useful starting point for grappling with the assessment of capacity to benefit. Ideally of course, we need to move this ordinal ranking to cardinal measures – more research for public health practitioners!

A component of this capacity to benefit is cultural security. This has been defined by Shane Houston9 as:

‘a commitment that the construct and provision of services offered by the health system will not compromise the legitimate cultural rights, views, values and expectations of Aboriginal people. It is a recognition, appreciation and response to the impact of cultural diversity on the utilisation and provision of effective clinical care, public health and health systems administration.’

There is little point in providing more and better services for Indigenous people if cultural barriers remain. Such barriers are very real. A study in WA10 suggests that to finance PHC services that are culturally secure will involve an increase in cost per consultation of about 50%. There will be yet more costs in investing in training health professionals in cultural security.

These same Indigenous leaders, while endorsing the concept of capacity to benefit, were also quick to suggest an important addition to the proposed formula. They argued that some communities were dysfunctional and if asked to set up a diabetes program, the chances of success would be low. Hence, what was needed first was investment in community development to give such communities the ability to use program resources more efficiently. This was labelled ‘MESH’ infrastructure: Management; Economic (resources), Social (cohesion) and Human (leadership).11 In any formula aimed at improving Indigenous health (and wellbeing) this ‘MESH’ needs to be incorporated (as it has been12 in the South African health service). What is not known at present is the extent of the investment needed in MESH. More for the research agenda in public health.

At this point in time, it is not possible to say what it will cost to close the 17 year gap. What can be estimated is up to what amount the government has already committed itself to close the gap. That amount is $340 billion, a figure derived as follows.

“The Pharmaceutical Benefits Advisory Committee (PBAC) recommends on behalf of government whether a drug should be listed for taxpayer subsidy on the Pharmaceuticals Benefits Scheme (PBS). This judgment is reached on the basis of a number of factors but includes the cost effectiveness of a new drug compared to some existing drug. Where appropriate this cost effectiveness is measured in terms of the extra cost per year of life extended.

“There is no explicit ‘cut-off’ on the amount that the PBAC is willing to spend to extend a life for a year but the evidence from their decisions13 suggests that it amounts to about $40,000. Logic but also fairness and efficiency would suggest that they must then be prepared to spend up to $40,000 to extend the life of an Indigenous person by one year. So for 17 years, that would be $680,000.”14

There are about 500,000 Indigenous people in Australia. Thus, (1) since the PBAC has indicated a willingness to pay of up to $40,000 to extend a life by one year; and (2) because of the commitment by government to close the 17 year gap in Indigenous life expectancy, this means that, by implication, the government has agreed to pay up to $340 billion to close the gap. Given the target year of 2030, that is about $15 billion a year.

That is a large sum. It can be put in perspective by comparing it with spending on the Common Agricultural Policy of the EU.14 This policy was established primarily to preserve the cultural way of life of French and German peasants. Each person in the EU pays each year about $400 towards the retention of this cultural way of life for this small minority of the people. That does little if anything to add to the life expectancy of the French and German peasant farmers. A similar sized annual contribution to protect Indigenous culture in Australia would amount to $8 billion. Against that background, to ‘protect’ Indigenous life expectancy, is $15 billion a year so much?

It remains to consider how to pay to close the gap. Four options are put forward for debate. First, the monies might be raised through general taxation. Second, there might be a hypothecated tax. Third, there could be an additional levy on corporation tax for those industries whose profits are made from extracting oil, gas or minerals from the sea bed or from under the land, all of which were there before 1788. And fourth, as I have suggested previously with Barbara Henry,15 the private health insurance rebate might cease and the money saved be used instead to help to close the gap.

Jon Altman and colleagues16 suggest that truly major investments will be needed if the gap is to be closed. These include ‘the guarantee of citizenship entitlements … a massive increase in infrastructural catch-up … a fundamental reallocation of property rights in resources to confer commercially valuable rights [on Indigenous people] … [and] … allocation of property rights in emerging markets like carbon and biodiversity credits to Indigenous Australians.’ I would add that there also needs to be a major investment in protecting Indigenous culture which is so vital to Indigenous health.

These recommendations will only be achieved if massive funds are made available. And that will happen only if Treasury opens its coffers and Australians open their hearts and show the compassion that has so long been missing in dealings with Indigenous Australians.