In analysing common methodologies used across the life insurance advice sector, we were able to identify a missing link that could help advice be more tailored and personalised. The Cost of Care whitepaper is an industry first, bringing together detailed research across the broad spectrum of injury and disease.
Across three articles, we will delve into three of the biggest cost burdens facing Australians today – Cancer, Mental Health and Heart and Artery.
Some illnesses can have a significant impact on your clients’ lives. Not only can they stop your client from working, their recovery may require assistance and time, and have negative repercussions for other family members.
Despite this, a key finding of the research study was that Australians see themselves as ‘bulletproof’ and found that – compared to their peers in other developed economies – Australians also have the most faith in the adequacy of social security to protect them in times of need, and unsurprisingly, the lowest interest in purchasing life insurance. Despite this perceived safety net, the direct and indirect costs of serious illness and injury can create a significant out of pocket burden.
In 2016/17 there were over 777,000 hospitalisations due to injury or poisoning. Over 600,000 Australians are living with coronary artery disease; there will be a heart attack every 12 minutes and 96 stoke events each day. It’s estimated that there will be more than 500,000 people living with dementia by 2025 and over one million by 2056.
As discussed in part one, this cost burden is estimated at $30 billion and upwards each year and falls on all of us, as tax payers and as individuals. And as good as our safety nets are, the out of pocket cost impact to those affected by ill health or injury can be crippling. Depending on the condition, direct costs can range from hundreds to many thousands of dollars each year. Often these are compound by the indirect costs – such as foregone income – impacting the sufferers and their carers.
Cardiovascular disease
Cardiovascular disease (CVD), which covers a range of conditions affecting the heart and arteries, such as heart attack, stroke and high blood pressure, is responsible for one death every 12 minutes in Australia – it’s one of Australia’s largest health problems. Despite medical advancements over the last few decades, it remains one of the biggest burdens on our economy.
Common risk factors like high cholesterol, smoking, obesity and diabetes play an important role in CVD. A 45-year-old man with two or more of these risk factors has a 1 in 2 chance of experiencing a major cardiovascular event by 80 years. For women, the risk is marginally lower at 1 in 3, but the overall trend is the same – more risk factors equal greater risk.
Cost of CVD in Australia
Australian expenditure on CVD is enormous; more is spent on CVD than any other disease group. In 2012-2013, $5 billion was spent on healthcare for people with CVD, which equates to 12% of all healthcare expenditure. CVD is responsible for 84 million prescriptions per year at a cost of $3.3 billion[1].
The indirect costs of CVD are also hefty. Treating CVD often involves large surgical procedures, lengthy recovery periods, loss of independence and loss of income. In addition, many people who experience a cardiovascular event, such as heart attack or stroke, will take time off work, resulting in losses to their employer as well[2].
Even though rates of CVD are decreasing, expenditure is likely to increase in the future due to the ageing population and population growth. Spending on CVD is estimated to increase to $8.3 billion by the year 2033[3].