The government deliberately floated the idea of cutting the medical research budget – mooted to be a $400 million cut, over what period was unclear – and in response to the howls of discontent and alarm from the affected community, it would now appear that the government, through the PM, has backed away from the idea.
Now it is difficult to calculate the optimal contribution of the government to medical research. Peter Costello was convinced that Australia underinvested in medical research and substantially increased the federal government’s expenditure. Not only is much medical research essentially a public good, but the activity is also global. There is a tendency to leave medical research to the big boys (especially the US) and for Australia simply to take up the innovations when they emerge.
The hysteria of the medical research profession in Australia has hit ridiculous heights with the suggestion that cutting the medical research budget by $400 million would led to foregone benefits of $129 billion – yes, $129 billion - and the loss of some 16oo medical research jobs. This figure was evidently arrived at by health economist. Maybe health economist are not actually economist because this figure is clearly LUDICROUS.
AUSTRALIA would stand to lose $129 billion and more than 1600 valuable researchers over the next eight years if the Gillard government cuts $400 million from medical research in next month’s budget, health economists say.
A group of experts led by Professor Nicholas Graves, of Queensland University of Technology, said the $129 billion loss would come from increased spending on health as a result of less research into how to keep medical costs down between now and 2020.
The economists said good health research reduced spending because it told policymakers what services to invest in for savings and why.(Really? And does this have to be Australian research?)
Examples included research into the efficacy of cancer screening programs (a highly contentious area) and ways of reducing hospital use. Without such research, Australia could expect to see healthcare spending grow by about 1 per cent on top of its annual average growth of 5.4 per cent each year.
”Since 1998, spending on Australian health services has grown each year by an average of 5.4 per cent. Expenditures of $107 billion in 2008-09 will rise to $226 billion in 2020 if this rate of growth remains steady,” the economists said.
”If spending increased 1 per cent more than 5.4 per cent due to poor health services decision making, then gross expenditures by 2020 will be $129 billion higher than $226 billion.
”There could also be worse health outcomes among the population.”
Moreover, the group, from seven different Australian universities, said that if the $400 million savings were found in job cuts, Australia could expect to lose 1644 experienced postdoctoral researchers on salaries of about $81,000 a year.
Given Australia’s economy was growing, they said any slight improvement in national debt as a result of the rumoured $400 million cuts to the National Health and Medical Research Council would not be worth it.
”The economic benefit associated with this is likely to be very small because the current net national debt is inconsequential when compared to the earning power of the Australian economy,” they said.
The figures came as Australia’s medical research community continued its fierce campaign against the predicted cuts, with dozens of notable scientists releasing a letter sent to Prime Minister Julia Gillard last Friday ahead of protests in Brisbane today.
Interestingly, Howard Florey is often mentioned in dispatches. Technically, he did not discover penicillin (that was Fleming) and all his research was undertaken in the UK (and some in the US). When he returned to Australia later in life, to be a grumpy head of the John Curtin School of Medical Research at the ANU, his research career was effectively over.
And the notion that medical research somehow gives hope to patients is surely a very poor rationale for public policy in this area (see Niki Savva in today’s Australian) - in part because the hope is often false (or too far into the future to be helpful) – and surely the providing of hope cannot be contained to Australian medical research.