There is an indelible link between housing and health in Australia.
Housing is a psychological need as well as a social determinant of health, meaning unstable, unaffordable and substandard housing leads to poor health outcomes and high health costs. Consequently, sustained exposure to housing affordability problems has long-term mental health impacts.
As this era of extreme housing affordability stress continues, we are silently and studiously seeding a mental health epidemic. And government response to the housing crisis is so siloed that it is unclear whether downstream impacts are even considered, let alone modelled.
There is an opportunity cost in allowing a significant proportion of the community to unwittingly walk into a perpetual cycle of housing anxiety, deteriorating health and medical debt, which ultimately contributes to a recurring cycle of stress.
So why are we not fighting to prevent long-term damage to individuals, communities and even our economic productivity?
Debt
It is well established that debt detrimentally affects mental health (independent of socioeconomic status), with individuals affected by debt at greater risk of depression, anxiety, suicide, suicidal ideation, substance abuse and psychotic disorders. There is also increasing evidence of a direct association between unaffordable housing and poor mental health.
Severe housing stress creates an environment where people are constantly juggling essential expenditures, such as medical bills, with the need to keep a roof over their heads. These household expenditure compromises represent the (sometimes daily) task of minimising and delaying expenses.
Those facing medical debt may compromise seeking or receiving appropriate medical care, which can lead to a delayed diagnosis of health conditions and potentially contribute to increased risk of premature mortality and poor mental health outcomes. These decisions will have varying effects, all with downstream cost impacts for our health and hospital systems.
But the first impact household expenditure compromises are likely to have, with an immediate public policy and budgetary cost impact, is on mental health. With an increasingly unstable housing market, out-of-pocket spending on health will be increasingly compromised across a more diverse cross-section of households.
Health costs
Chronic illness can damage the economic well-being of individuals and their households, with financial consequences including unemployment and reduction in paid employment, as well as increased costs of ongoing treatment and support.
Despite continued commitments from all governments to publicly fund essential care and support, out-of-pocket spending on health services has steadily increased over the past 25 years in Australia. Individuals spent an estimated $33.2 billion on health goods and services in 2020-21, equating to an average of $1293 a person.
These increasing medical costs have coincided with stagnating wage growth, a decay of the primary healthcare system, and booming rates of chronic illness. This combination is driving the spike in financial hardship associated with medical debt.
Primary healthcare is also in crisis. A recent Grattan Institute report reveals that Medicare, Australia’s universal healthcare system, has failed to keep up with changes to Australians’ health needs since it started in 1984.
The report also highlights how other countries have reformed general practice, leading to a drop in avoidable hospital visits. However, in Australia, we spend more on hospitals while neglecting general practice: the best place to tackle chronic health conditions.
Government spending
According to the Australian Institute of Health and Welfare, 7.6% of government health expenditure was spent on mental health-related services in 2019-20, the same percentage spent in 2015-16. However, during this time there has been a decline in home ownership, an increase in the number of private renters, rising housing and rental costs, and an ongoing decline of social housing stock in relation to population growth. In fact, new data shows housing stress has become one of the top three risk factors for suicide.
The Productivity Commission has estimated the direct economic costs of mental health at between $43 billion and $70 billion, with an additional $151 billion due to the cost of disability and premature death. Even if mental health funding was doubled overnight, the government would still get a positive return on investment. For individuals needing access to care, this investment would be life-changing.
Considering the net benefit to the economy, the recent decision to reduce the number of mental health sessions for which people can receive a Medicare rebate seems counter-productive. Our local economies and communities will benefit not from more people receiving fewer mental health services, but from everyone getting the services they need.
We cannot afford to ignore the millions of Australians who need more affordable and accessible mental healthcare, the increasing demand for which over the coming years will be inextricably linked to less affordable and accessible housing. The overall viability of our healthcare system, for generations to come, will depend on it.
Have you experienced poor mental and/or physical health due to housing stress? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
