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Parties fail to address health, aged care, sa -

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Parties fail to address health, aged care, say economists

Reporter: Tim Lester

KERRY O'BRIEN: New Government figures due out tomorrow are likely to fuel health and aged care as
campaign issues.

The numbers will probably show Australia's health spending is approaching 10 per cent of our gross
domestic product - about $70 billion a year.

It's a huge spend, but some health economists believe it won't be anywhere near enough as the
Australian population ages in the near future.

Others argue aged care is heading for a crisis that neither party has really addressed in this

Business and economics editor Tim Lester reports.

GWEN SMITH: It's Stephanie Knapp in the studio - and welcome, Stephanie, after quite a few weeks,
of not being there and me being here.

STEPHANIE KNAPP: Thank you, Gwen.

It's good to be back.

TIM LESTER: For Stephanie Knapp, the move into a retirement village should be easy.

It's not.

STEPHANIE KNAPP: As people know, I put my house up for sale and I'm going to downsize.

TIM LESTER: She's a Federation award winner for her long-running Melbourne community radio program
with friend Gwen Smith.

She owns a home but at 74 she can't manage it.

STEPHANIE KNAPP: Your pension, everything that you're receiving, you're just putting back out to
maintain it.

TIM LESTER: So Stephanie Knapp's journey into Australian aged care begins with confusion,
frustration, and worry that the sale of her home will disqualify her from the pension.

STEPHANIE KNAPP: These things come up and we as the aged people and senior people, that's the sort
of things we worry about, the frailty for us because we say, "Well come on, you know, we've worked
for all of this."

MARY BARRY, VIC ASSN OF HEALTH AND EXTENDED CARE: The governments are tinkering around the edges.

TIM LESTER: Mary Barry is from Victoria's peak Aged Carers group.

MARY BARRY: Making minor changes to try and address a big problem.

TIM LESTER: A problem so acute, she believes the high support or nursing home end of Australia's
aged care system is lurching towards collapse.

MARY BARRY: The current aged care system was devised in the 1980s when we had about 8 per cent of
our population aged over 65.

We're now heading for a situation where we will have 25 per cent of people over that age.

TIM LESTER: We've known virtually since the post World War II baby boomers gave birth that one day
that glut of children would need aged care.

Here they come.

Today, retirement age Australians are still fewer than 13 per cent of the population.

But in the next two decades, the seniors will outgrow other age brackets with a striking surge.

MARY BARRY: The ageing of our population is going to drive the reform.

TIM LESTER: Melbourne consultant Danielle Thompson helps elderly clients navigate the aged care
system because families are finding they need an expert to make sense of it.

LEE EMERY: The health system to me is a nightmare.

It's just so complex and there seem to be many many providers.

TIM LESTER: Lee Emery's parents are determined to live at home.

Allan Poulton is 90 and caring for his 88-year-old wife as she struggles with memory loss.

ALLAN POULTON: We built this house over 50 years ago and we've lived in it all the time.

LEE EMERY: If dad felt that he had to go into some institution or was forced to do anything, that
would really take a lot away from his own independence.

TIM LESTER: But those in the system see community-based care failing now more than ever.

DANIELLE THOMPSON, SPECIALIST CARE SERVICES: Well, I'm seeing people on a daily basis who are
actually fronting up to the hospital system because they are not getting the level of care they
require in the community.

TIM LESTER: The issue infuriates Kathy Eagar, director of the Wollongong based Centre for Health
Service Development.

PROFESSOR KATHY EAGAR, UNIVERSITY OF WOLLONGONG: It's fair to say there's no real planning going

TIM LESTER: And Professor Eagar says neither party is addressing the issue in their campaigns.

PROFESSOR KATHY EAGAR: The over-85 population will peak in 2011 in Australia based on current
estimates and we're not doing any planning.

Now, that group have got very high rates of dementia, high rates of need for residential care and
residential care planning figures, for example, haven't been revised for nearly 20 years.

And they're based on people over 70.

MARY BARRY; When governments start to predict what that's going to cost over the next 10 to 20
years they are going to have to look at how they're going to fund it because they're either going
to have to have another tax to pay for it or we're going to have to have user pays.

TIM LESTER: A new tax for health and aged care.

That's certainly something the major parties are not talking about.

But will our older population necessarily drive up health care spending?

Some evidence is compelling.

Like the average Medicare claims for last financial year.

Our five to 14-year-olds cost the Government $134 each for the year.

But then, as you go through the age groups, the claims just get higher.

Right up to the 65 to 74-year-olds who cost the Government $929 each in Medicare claims.

It looks like a looming nightmare for the health Budget, but not all health economists see it that

PROFESSOR JEFF RICHARDSON, MONASH UNIVERSITY: Australia's still quite young and in 20, 30 years,
we'll have aged to the point where we look like a European country today.

Most of Europe is older than Australia.

And yet most of Europe doesn't spend much more or even as much as Australia.

TIM LESTER: Professor Jeff Richardson sees a greater threat to our health Budget - expensive new
medical technology.

He sees the day where we'll have to say, "It's been invented, it could save your life, but sorry,
it costs too much."

But he, like other professionals we spoke with, is deeply frustrated with the level of campaign
debate on health and aged care.

PROFESSOR JEFF RICHARDSON: There are large issues of the system, the system that will generate best
health and efficiently and we're not addressing that at all.

TIM LESTER: The campaign is missing the point?

PROFESSOR JEFF RICHARDSON: Yes, TIM LESTER: What are the missing health and aged care issues?

Those we spoke with mentioned one repeatedly - the problems with managing systems hopelessly
straddled across a state-federal divide.

PROFESSOR KATHY EAGAR: You think of just basic care.

If an old person falls over and they go to their emergency department of a local hospital, the
State pays.

If that same person falls over and goes to see their GP, the Commonwealth pays, through the Health
Insurance Commission.

That's really crazy.

Neither of them have got incentives to provide adequate levels of service and both of them have
turned cost shifting between them into an art form.

PROFESSOR JEFF RICHARDSON, MONASH UNIVERSITY: It's been known for a long time that we're unlikely
to get an efficient system unless we pay for that out of one pool of funds either at the State
level or at the Commonwealth level.

TIM LESTER: As long as government help and good fortune let Allan and Jessie Poulton live at home,
they're happy.

ALLAN POULTON: I've taken on looking after the meals which is a bit of a new thing for me.

So far, we're eating fairly well.

MARY BARRY: Whoever wins the government on 9 October must take aged care seriously during the next
three years and look at serious reform to ensure that it is not a political football at the next

(c) 2006 ABC