The health care system is vital to a productive economy and high living standards.
But the health system needs to be modernised, and redesigned to more efficiently deliver services, greater value, and reduce waste and inefficiency.
Health spending accounts for about 15 per cent of total Commonwealth direct spending, and about 25 per cent of total state spending.
The Productivity Commission estimates there could be potential cumulative gains of at least $140 billion over 20 years (in 2016 dollars) by:
focusing health care on consumers
being transparent and using data better
restructuring incentives to deliver better quality outcomes, including increased competition and contestability, and
Increasing greater use of technologies.
Detailed analysis by the Productivity Commission estimates the efficiency gap between the average and most efficient acute-care hospitals was likely in the order of 10 per cent.
These variations consist of avoidable costs such as keeping people in hospital too long, or overpaying for supplies.
The Australian Commission on Safety and Quality in Health Care estimates that preventable adverse events in Australia add between 6 and 10 per cent to costs of the system.
The system is no longer fit for purpose and remains wedded to acute and episodic treatment.
Australia is witnessing increased rates of chronic and age-related conditions.
The number of Australians aged 65 and over is projected to double by 2055.
The Grattan Institute estimates over $1 billion a year is spent on potentially avoidable hospital admissions for chronic disease.
According to labour force data, around 2.5 million working Australians will have an experience of mental illness in the next 12 months.
The wellbeing, productivity and participation of these Australians can be enhanced through workplace practices.
Business is a big part of an effective approach to mental health.
The benefits of a mentally healthy workplace mean employees are more committed to their organisation and retention levels are higher.
In 2012 the University of NSW and the Black Dog Institute assessed the economic and business case for ensuring mentally healthy workplaces for the Mentally Healthy Workplaces Alliance.
They found the cost of mental health was $10.9 billion a year including $6.1 for presenteeism, $4.7 billion for absenteeism, and $145.9 million in compensation claims.
Untreated, depression translates into over six million working days lost a year and 12 million days of reduced productivity each year.
They also found that for every dollar invested in mental health initiatives there was an average return on investment of $2.30.
Australia has one of the lowest rates of employment participation by people with lived experience of mental illness in the OECD.