There are rumours – not denied by the Department for Health and Ageing, that the national budget for biomedical research will be cut when the new Federal Budget is brought down on 10 May 2011.
The estimates are that the cuts will represent 19% of the total budget over three years.
Usually, when a government wants to save a little they just fail to provide any funding growth – not even the small amount of growth to meet the cost of inflation – known as indexation. This forces agencies to operate on a tighter budget – to provide their existing level of service on the same money as the year before. Treasury likes to call this an ‘efficiency dividend’.
Cutting funding to medical research does not deliver an efficiency dividend, it creates a liability. The real cost of health comes when health problems become chronic. Research helps us prevent conditions from becoming chronic, and in some cases provides a cure.
As an example, Kevin Murphy and Robert Topel from the University of Chicago (1999) determined that a 1% reduction in cancer mortality as a result of research would add $500 billion to the US economy.
If we consider the implications of some Australian research efforts we can see similar effects. Understanding that H. pylori is a key cause of stomach ulcers has led to a massive reduction in the cost of health care for a great many people – and increased their economic contribution. It is not just the reduced treatment costs that are the efficiency gain – but the way in which medical research contributes to the return of people with chronic illness to the workforce.
Medical research punches above its weight in contributing to the economy. It is not a budget cost but a budget boost.
But the boost is delayed – and this is where the politics kicks in. The electoral cycle means that governments quite often think short term. They are unlikely to be still in power when the big breakthrough they funded is made and the Nobel prize the enabled may come decades later when the political decision to fund the research is long forgotten.
Governments think short term gain in Australia. We have lost the vision to fund the future and it is a risk to both our health and our wealth.
We will lose talent to Singapore and China, and in the USA where there is still funding but not enough scientists there is a growing need for Australian talent – and we are already experiencing the cost of that.
We are losing researchers from comparatively low-paid but high value research projects to the private sector where the research they do will be of value to the corporation rather than the population.
If the government cuts the budget for research in Australia it will be a clear sign that short term political gain is all they seek from this budget.
That is it for the short version – read on if you dare…
Budgets for agencies are based on maintaining current levels of services, but research budgets are different. Research organisations have some ongoing research projects, but a large proportion of the money is allocated each year by a grants committee that assesses and prioritises research applications – and does so in a way that shapes the future health and wellbeing of the whole community. This happens in an environment of rationing. There are many more research proposals than there are grant dollars available and so the process of allocation of the limited resources always means that promising avenues of research are delayed or abandoned.
Why does that matter? Well, it could be the avenue of research that might have saved you life or the life of your child at some future point – that is speculative certainly, but the point is that increasing funding for research improves our quality of live and our life expectancy in the long term.
Decreasing research funding is unlikely to reduce life expectancy at a general level, but it does mean that some people will die sooner than they would have if research was better funded. Research leads to efficiency – properly funded and supervised research leads to better health outcomes that reduce long-term health costs. The health budget for 2010/11 was $56.88 billion dollars. Just over $700 million was allocated by the National Health and Medical Research Council (NH & MRC) for research in 2009/10 and while the annual report for 2010/11 is not yet available the rate of funding growth to the NH & MRC in the budget was not high, so the figure of just over $700 million is probably still reasonably accurate.
$700 million sounds like a lot, but this represents around 1.2% of the total health budget, tiny, when you consider that some countries allocate a substantially higher proportion to research. As a proportion of the total budget, the funds allocated for biomedical research represent less than 0.2% a tiny cost for massive future economic and health outcomes.
Of that $700 million, there was $383 million for 683 project grants – on average $560,000 per grant. The next largest allocation was $102 million for 10 program grants supporting cutting edge research – at on average $10 million per program. That represented the main allocations and the rest was allocated to support ongoing projects, research fellowships and the development of promising research and researchers. Research funding in allocated in a roughly 50/50 split between biomedical and applied research.
Research is a low political priority, funds can be cut because the government thinks there will be no backlash from the electorate. Utter stupidity. The lack of outcry does not mean a lack of consequences and I suspect that if we raise awareness of these consequences that most Australians would be outraged that this government is potentially going to betray the health of the current youngest generations of Australian’s in order to score cheap – very cheap budget points on 10 May.
The budget process in the Australian Government is a cycle moved apparently more by political whim than by an evidence-based approach that seeks to deliver best value for money for Australian taxpayers. We are quite used to seeing odd little projects funded in discrete electoral areas – the traditional “pork barrel” so beloved by many political sorts.
What tends to get noticed less is where the money comes from in order to allow reallocation of dollars to one project or another. Tax increases are unpopular so generally money is shifted within the budget framework. Reading through each year’s federal budget is a chore, but one that I undertake from budget night each year and the array of small projects quietly funded or de-funded comes with only a cursory explanation. The key word to look for is “efficiency” as this is code for the cessation of funding or a decrease in funding.
It is an odd use of the term. Efficiency should represent a measurable improvement in the use of resources – that is, you should be able to clearly demonstrate how the action outlined will contribute to increased efficiency – this is rarely if ever done in the Federal Budget papers.
This government is not delivering efficiency but stupidity.
For more information go here and read it from the people who's research has been saving Australian lives, and the lives of millions around the world since 1915 - the Walter and Eliza Hall Institute of Medical Research campaign website, Discoveries Need Dollars
For those interested in the economic value of research there is a fair bit out there – one easily accessible estimate model can be found at:
http://faculty.chicagobooth.edu/kevin.murphy/research/murphy&topel.pdf
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