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Australia: the healthiest country by 2020
National Preventative Health Strategy - Overview

The conceptual framework for the Preventative Health Strategy

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The components of the Strategy are based on the following four rationales:

1. Influencing markets
2. Inequities in health
3. Developing effective policies
4. Investing for maximum benefit

Influencing markets

Food, physical activity, alcohol and tobacco are all consumables trading in our market system. When markets work efficiently, and consumers and producers act with full information, markets contribute significantly to community wellbeing. However, markets are imperfect and do not always produce optimal outcomes from a societal point of view.

Markets often under-provide the information consumers need in order to make healthy choices. When individuals have imperfect information about their own health, the range of choices available to them and the expected impact of particular lifestyle choices on their health, they may fail to act in the best interests of themselves or society.

Understanding how to adopt a healthy lifestyle is compromised by the complexity of the relationship between lifestyle behaviours and health, and an economic and social environment that promotes unhealthy choices. Efficient markets rely on a rational consumer able to critically evaluate information and weigh up, for instance, current pleasure and possible consequences.

Externalities, when the costs or benefits from actions impact on others, are another example of an imperfect market impacting on public health. The effects of smoking or excessive alcohol consumption extend beyond the individual, to impact on family members and the wider community.

Where imperfect information, the absence of rational decision making and negative externalities exist, there is a strong case for corrective action to be taken.

The Taskforce has considered the economic arguments with regard to these issues carefully and systematically, and has taken account of research evidence regarding the relative influence of market, government and individual actions on behaviours that have demonstrated adverse health outcomes. Further, it has considered the weight of views and arguments presented in the submissions and received from the community and in consultative forums.

Based on the above, it is the Taskforce’s view that there are areas in which an imperfect market does in fact exist and which warrant corrective action – largely but not only through government action – if desired improvements in health are to be achieved. These areas are those identified as most clearly distorting consumption; for example, any form of marketing in the case of tobacco, and in the case of alcohol and obesity, marketing promotions aimed at children or adolescents that portray unhealthy choices as socially desirable.

However, in recommending measures that impose constraints on marketplace activity, it is the intention wherever possible to find ways in which both the private and social good can be served by shifting consumption in particular markets from less healthy to more healthy consumption patterns.

Inequities in health

Australians’ concern with fairness in relation to preventative health, together with their concern for the suffering of others, demands actions to support equity of access to the means to lead a healthy life. This suggests, for instance, policies that promote access for all to nutritious food, physical activity, clean water and adequate housing. It also supports the provision of culturally relevant and accessible preventative health services (including minimal co-payments) that discriminate in favour of high-risk groups and those in poorer health.

In formulating its recommendations, the Taskforce has been particularly concerned with the need to address the unequal distribution of health and risk in Australia. In this, the Taskforce’s views are firmly in alignment with other contemporary developments in Australia and internationally, including:

• The National Health and Hospitals Reform Commission (NHHRC), which identified ‘Facing inequities: recognise and tackle the causes and impacts of health inequities’ as one of four major themes in its Interim Report
• The targets and priorities set out under the COAG ‘Close the Gap’ objective to address Indigenous disadvantage, which include both health, such as life expectancy and child mortality, and ‘social determinants’ targets, such as education and employment
• The Australian Government’s Social Inclusion Agenda, and similar initiatives introduced at the state level (such as South Australia’s Social Inclusion initiative)
• The Report of the World Health Organization (WHO) Commission on the Social Determinants of Health

Developing effective policies

Ineffective policies can distort the health service mix and reduce the efficiency of the health system. Examples include the privileging of some modalities and settings over others, cost shifting between levels of government, inflexibility in supply, the failure of quality assurance and accountability mechanisms, and barriers to cross-sectoral initiatives.

Policy failure can also influence the type of preventative services likely to be funded, favouring medical and pharmaceutical services over lifestyle and community-based initiatives.

Another aspect of policy weakness is the unintended adverse consequences of non-health policies on health. These might relate to investments that favour the use of motor vehicles over active transport options, that result in urban design and land use that discourages activity and social connection, or the education curriculum that neglects health and physical activity.

The ‘siloed’ portfolio nature of government can result in policies that are consistent with the objectives of the agency and portfolio, but which are not necessarily in the interest of the wider society.

To avoid the negative health impacts of non-health policies, the types of initiatives suggested include the use of ‘health impact assessments’ and the Health in All Policies approach, in which health and wellbeing are taken into consideration in the policies of other government sectors.[23]

Investing for maximum benefit

The fourth rationale involves minimising opportunity cost, or the benefits forgone in unfunded activities. This requires the identification of the relative cost-ineffectiveness of intervention options and the redirection of resources away from cost-ineffective to more cost-effective interventions.

While this offers a distinct rationale, it can also be pertinent in selecting strategy elements to address market and policy failure, which will maximise or at least enhance social wellbeing. Resources should be allocated where they yield the greatest benefit per unit cost.

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