Groundbreaking study tracks government prevention funding

A groundbreaking Prevention Centre funded study published in the Australian and New Zealand Journal of Public Health has shed new light on the allocation of government spending towards public health initiatives.

The study, “How do we fund Public Health in Australia? How should we?” is the first of its kind to thoroughly analyse and map public health funding across federal and state and territory governments, to try and offer a comprehensive view of how public health dollars are spent.

The study references data from the Australian Institute of Health and Welfare (AIHW), indicating that less than 2% of total government health expenditure in Australia is dedicated to critical areas like infectious and chronic disease protection, prevention and health promotion. The authors have gone further by tracking the funding through the health system, to see how it is spent.  

Findings reveal that in 2019-20, only 1.8% of overall health spending—equivalent to $140 per person—was allocated to public health initiatives. Victoria spends $110 per person, while the Northern Territory spent $527 per person. Some variation can probably be explained by differences in responsibilities between states and territories, but a lack of transparency regarding what this money was spent on makes it difficult to draw conclusions.

Lead author, Emeritus Professor Alan Shiell from La Trobe University, emphasises that the effectiveness of public health funding is not solely determined by the amount allocated but also by how it is distributed, that is the channels through which funds flow and the mechanisms used to pay service providers.

Our research revealed a complex and piece-meal [public health] funding system. The system delegates responsibility for a lot of the funding decisions to the states and territories, which is advantageous as it allows local expertise to identify need. But much of the system is also hidden from view, which makes it difficult to track where the money is being spent or understand its impact.

Emeritus Professor Alan Shiell

The research team highlights that the key insight from their work is not just about the amount spent on prevention but also about how the funding mechanisms influence outcomes as Emeritus Professor Penny Hawe from the Sydney School of Public Health, University of Sydney explains.

“The way funding is allocated can significantly affect what outcomes are achieved,” she says. “I don’t just mean the difference between allocating to programs with high versus low return on investment. That principle is already well known. I am talking about whether the funding is bundled up and allocated by a population block grant or given over to categorical funding, or separate funding for cancer, alcohol, mental health, etc.”

Block grants allow more flexibility to address the way problems cluster and the way we know that front line practitioners ‘multisolve’ in the field and build ‘soft infrastructure’ or the ability for communities to take positive steps with regards to their health.

Emeritus Professor Penny Hawe

“Most of us spend our time looking at the behaviours of health care providers or at the behaviours of consumers or people in cities, towns, workplaces or schools,” says Professor Hawe.

“But funding mechanisms are the missing third lever for health improvement. This is the sixth paper in our series examining various aspects of funding. It’s not just about the amount of funds, but the conditions, timing, decision-latitude and reporting around it, that deliver stronger benefits,” she says.

The Prevention Centre has long been committed to strengthening the evidence to help strengthen Australia’s prevention system.

Nadia Mastersson, Head of the Prevention Centre says, “We hope this study stimulates a crucial conversation about how we can improve public health funding mechanisms in Australia.”

We need to consider how we can better track and allocate these resources to ensure they make a meaningful difference to the health of Australians.

Nadia Mastersson

There was a notable increase in public health spending during the COVID-19 pandemic. Now states and territories are working to get their budgets back under control we’re likely to see reduced investment in this area with spending possibly reverting to pre-pandemic levels. Professor Shiell suggests this underscores the need for a systematic approach to public health funding.

We have a well-established system for evaluating investments in medicines through the Pharmaceutical Benefits Scheme (PBS). It is time to develop a similar framework to ensure consistent and effective funding for prevention programs. This was first considered 25 years ago. We probably did not have enough data to make good decisions then or the methods required. But we do now.

Emeritus Professor Alan Shiell

The research advocates for re-evaluating public health funding models, proposing a system akin to the PBS for prevention to ensure more consistent and impactful health spending.

Mastersson points out there are many critical functions included within the public health system including food safety, environmental health and infectious disease control, and that chronic disease prevention and health promotion are just one part of what is funded within just 1.8% of the total health system funding.

Although many in Australia recognise the importance of investing in prevention to improve health outcomes, the percentage of funding that we ultimately allocate to prevention in Australia does not reflect this.

Nadia Mastersson

“As a key part of the Sax Institute’s efforts to advance chronic disease prevention, the Prevention Centre is proud to support research that provides critical insights into the Australian prevention system,” says Mastersson.

“Our investment in this study highlights our ongoing commitment to enhancing public health outcomes. By identifying and addressing gaps and inefficiencies in how these funds are allocated, we aim to support more effective and impactful policies and action.

The Prevention Centre, as an embedded Centre of the Sax Institute, plays a pivotal role in building and strengthening systems approaches to prevention. Our collaboration with policy and practice partners together with the research community is crucial in striving towards a more effective, efficient and equitable preventive health system in Australia,” she says.