The Parliamentary Secretary to the Treasurer, the Hon Ross Cameron MP, today announced that the Productivity Commission will undertake a study detailing and explaining the impact of advances in medical technology on public and private healthcare expenditure and the associated costs and benefits for the Australian community.
The study will assist governments and other health sector stakeholders by improving the level of understanding about the relationship between advances in medical technology, health outcomes and health expenditures.
The study will identify the impact of medical technologies on healthcare expenditures over the last ten years and, as far as possible, the likely impact over the next ten years.
Advances in medical technology should contribute to enabling people to be active in the community and in the workforce for longer. Technology also has the capacity to produce efficiencies in the health sector.
However the cost-effectiveness of future health technologies is not guaranteed, while community expectations for access to the latest procedures are unlikely to abate.
It is therefore important to know to what extent the significant increases in projected health expenditure associated with adopting increasingly expensive new technologies are likely to result in commensurate improvements in health outcomes. A significant element of the study will be its focus on mechanisms and processes for ensuring cost-effectiveness.
The Productivity Commission has been asked to report within twelve months. The terms of reference are attached.
People wishing to obtain further information on the study or register their interest can do so by visiting the Productivity Commission's website at: www.pc.gov.au or by contacting the Commission directly on (02) 6240 3239.
CANBERRA
31 August 2004
THE IMPACT OF ADVANCES IN MEDICAL TECHNOLOGY ON HEALTHCARE EXPENDITURE IN AUSTRALIA
PRODUCTIVITY COMMISSION ACT 1998
The Productivity Commission is requested to undertake a research study detailing and explaining the impact of advances in medical technology on public and private healthcare expenditure, and the associated costs and benefits for the Australian community. Technology is defined here in broad terms, encompassing physical equipment, instruments and pharmaceuticals, clinical procedures, knowledge and support systems within which health care is provided.
In undertaking the study the Commission is to:
- Identify the key drivers of medical technology demand.
- Identify the net impact of advances in medical technology on healthcare expenditure over the past ten years.
- As far as practicable, identify the likely impact of advances in medical technology on healthcare expenditure over the next five to ten years, and identify the areas of significant potential growth.
- Identify existing mechanisms and processes for ensuring cost-effectiveness in the use of medical technology, and any gaps in these processes.
- Examine the impact of changes in medical technology on the distribution of costs and financial incentives across different parts of the health system, including whether advances in one technology area result in reduced costs in others.
- Investigate the net impact of advances in overall and individual health
technologies on:
- economic, social and health outcomes, including exploring which demographic groups are benefiting from advances in health technology; and
- the overall cost effectiveness of healthcare delivery.
The Commission is to have regard to:
- recent substantive studies undertaken elsewhere;
- international experience in ensuring cost effectiveness of health care;
- the established economic, social, health and environmental objectives of the Government; and
- community expectations of appropriate healthcare provision.
The Commission is required to produce a final report within 12 months of the receipt of the reference.
ROSS CAMERON