15. Prevention is worth $40bn in Australia

I recently worked with Ernst & Young’s health and actuary team to research all the literature on primary, secondary and tertiary prevention. One of the findings was a $40 billion saving opportunity if Australia’s health system was able to place greater emphasis on reducible burden of chronic disease, equating to 26 percent of our recurring annual expenditure on health care.

Through early risk identification, screening and intervention, we can prevent disease, limit the onset of disease complications, manage de-conditioning of disease in lower acuity settings, and reduce unnecessary hospital admissions. The specific opportunities we identified include: 

  • Oral health – expanding dental coverage and reducing Australia’s periodontitis prevalence from 23 percent to best in class (South Korea 10 percent), can reduce total dental costs by 30 percent (=$3.1bn saving)
  • Mental health – reducing diagnosis and treatment gaps through early screening and intervention can reduce non-­‐serious mental illnesses by 17 percent and serious mental presentations by 28 percent, resulting in up to 23 percent less total mental health costs (=$3.9bn saving)
  • Diabetes – lifestyle modifications, early screening and active treatment can reduce diabetes by up 58 percent, and tight glycaemic (sugar) control once diagnosed can reduce further complications by up to 85 percent, amounting to a potential reduction of 18 percent of total diabetes costs (=$1.8bn saving)
  • Musculoskeletal – exercise and conservative therapy can reduce or delay the need for joint replacement surgery by up to 44 percent, resulting in a potential reduction in MSK costs of up to 11 percent (=$1.2bn saving)
  • Obesity – clinical trials have shown 11 percent success rate with lifestyle modification, 8 percent success rate with drug therapies and 28 percent success rate with bariatric surgery; together this represents a 41 percent cost reduction opportunity (=$2.1bn saving)
  • Cardio-vascular disease – cardiac rehabilitation and risk assessments, which can reduce admissions by 56 percent, tight BP management, which can reduce significant IHD or CVD events by 30 percent, plus early detection/intervention on other risk factors can reduce overall cardio-vascular costs by up to 23 percent (=$2.9bn saving)
  • Chronic respiratory disease – reducing smoking, increasing pulmonary rehabilitation, promoting more effective use of medications and inhalers, and improved self-management can reduce respiratory costs by up to 32 percent (=$0.9bn saving)
  • Chronic kidney disease – early detection and optimal management of diabetes, BP and obesity pre-cursor conditions can delay or reduce kidney costs by up to 25 percent (=$0.8bn saving)
  • Cancer – lifestyle modifications to reduce cancer prevalence that have been demonstrable in clinical trials include smoking cessation, diet and exercise to reduce body fat, reduced UV exposure, reduced alcohol consumption, regular vaccinations and regular screening. Up to 38 percent of cancer costs is considered avoidable (=$2.9bn saving)
  • Other preventative interventions – prevention in diseases not listed above, ensuring continuity of care between hospital and GP, improving medication adherence, using tele-triage and medical triage, employing social workers in chronic disease management, implementing hospital substitution programs (e.g. hospital in the home and moving services into the community like dialysis) and increasing deaths outside of hospital (in line with patient preferences) can achieve the another $20.4 bn.

These savings are substantial and given the current discourse on the affordability of health care, we ought to prosecute these opportunities that have been demonstrated to be achievable. This will require Government action, private sector backing, regulatory reform, and significant clinical and patient behavioural change – more on this to come.


  1. AIHW Oral Health
  2. NHMRC Water Fluoridation
  3. The University of Adelaide Periodontal disease and Obesity
  4. Public Health Association of Australia Policy‐at‐a‐glance ‐ Oral Health Policy
  5. smile.com.au
  6. Global prevalence of periodontitis 13 ABS survey of Mental Health
  7. Medibank/Nous – Case for Mental Health Reform
  8. Reachout
  9. BlackDog Institute
  10. RANZCP – Economic cost of Mental Health Illness
  11. Diabetes Australia – A National Diabetes Strategy and Action Plan
  12. AIHW Australia’s Health
  13. Diabetes UK
  14. Baker Heart and Diabetes Institute -­‐ The cost of diabetes in adults in Australia.
  15. Access Economics
  16. Arthritis Foundation
  17. Annals of the Rheumatic Diseases 2015;74:164-­‐169; AIHW, Back Problems, 2016.
  18. AIHW, “A picture of overweight and obesity in Australia”, 2017.
  19. Access Economics Pty Limited, “The growing cost of obesity in 2008: three years on”, 2008.
  20. AIHW, “Impact of overweight and obesity as a risk factor for chronic conditions”, 2017.
  21. Medibank Private, “Obesity in Australia: financial impacts and cost benefits of intervention”, 2010.
  22. PWC Australia, “Weighing the cost of obesity: A case for action”, 2015.
  23. ABS 2015 prevalence and population
  24. AIHW CVD cost in 2009 inflated by population growth
  25. Heart Foundation – Australian heart disease statistics 2015
  26. Neurol Int (2011). Primary stroke prevention and hypertension treatment
  27. Singapore, Canada, UK, US, Norway, Sweden. Disease burden, WHO
  28. Respiratory references: CMAJ, ATSJournals, Lung Foundation, Tobacco in Australia.org, National Asthma Council, ABS, AIHW
  29. Kidney Health Australia – 2016
  30. National Kidney Foundation 2017
  31. Kidney International Volume 84 Issue 5 November 2013 Pages 1034-1040
  32. Royal Australian College of General Practitioners Chronic kidney disease prevention and management
  33. Cancer references: National Cancer Institute, Cancer Australia, QIMR Berghofer Medical Research Institute, World Cancer Research Fund
  34. The Health Foundation
  35. The Kings Fund
  36. Emergency Care Institute NSW
  37. Productivity Commissions 2017
  38. Uni. Western Sydney
  39. Kidney Health Australia, Walker et. al
  40. CQ University Australia
  41. Grattan Institute
  42. International journal for quality in health care ,

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