SA Health statistics produced in 2006 predict that by 2016 the South Australian population will be growing at around 4% a year. That part of the population aged over 75 will be growing at around 9% while the under 15s will be growing at only 1%. These projections encapsulate all of the health economics issues that our community will face in the coming years.

Coupled with this knowledge is the knowledge that on average a person over 65 is twice as likely than a younger person, in the course of a year, to need a hospital bed,. And a person over 85 is five times more likely to need one. So the ageing of our population will result in geometric rather than arithmetic growth in demand.

We also know that this growth in our older population and its increasing demand for services will continue until about 2040 when the ‘baby boomer’ generation starts to die off.

Projections about the State health budget made by SA Health and Treasury in 2006 showed that at the then rate of annual growth in health department expenditure – about 9% and double the State’s revenue growth – the entire State budget would be needed by 2032 to meet expected demand. Health consumes currently about 30% of the State budget.

The economic and social issues facing us our immense and we have only a relatively short period of time to address them.

1. From where will our future workforce come?

2. Will taxpayers be willing to see more and more of their taxes spent on health services for the elderly and less and less on their own needs?

3. What incentives [and disincentives] will work to reduce behaviours which lead to hospitalisation?

4. How do we develop a culture of reform in our institutions?

5. If all else fails how will we ration health resources?