Most Australians have become all too familiar with the term ‘cost of living’ over the past few years. It’s a phrase that unfortunately reminds many of the day to day financial struggles they’ve endured recently. However, while most of us focus on short-term life costs, insurance organisations can’t afford such a narrow focus. For the ongoing viability of such companies, one of the most important terms is ‘lifetime costs’.
With that in mind, Zurich Financial Services Australia (Zurich) this week released an updated edition of its Cost of Care report, which examines the range of health conditions in Australia and the long-term expense they incur – lifetime costs.
In the words of Zurich, the report is an “updated analysis on the growing incidence and cost of disease in Australia”. It’s probably fair to say that an updated analysis was needed, if not overdue. This report, officially titled Cost of Care: Volume 2, is the second iteration of a report first delivered in 2018.
To say things have changed somewhat in the six years since would be an understatement. The onset of the COVID pandemic in late 2019 irrevocably changed our outlook on health and its associated costs.
Lifetime costs – what’s changed over six years?
In a statement accompanying the report’s release, Zurich highlighted a rise in the incidence of most cancers since 2018. “For cancer, the report finds increasing incidence estimates in eight out of 10 types since 2018,” it said. This was “driven by: prostate (+44 per cent since 2018); breast (+14 per cent) and melanoma (+27 per cent)”.
While such rises are cause for concern, the same period saw marginally improved survival rates for most types of cancer.
One would expect a rise in the incidence of cancers would contribute to an increase in lifetime costs. Perhaps counterintuitively, improved survival rates can also add to such costs. The development and rollout of new treatments does not come cheap.
Matt Paterson, chief claims officer, Zurich Australia & New Zealand, said as much on the release of the report. “There is a significant financial burden associated with the treatment of certain medical conditions in Australia,” he said. “Concerningly, many of these are growing in prevalence against a backdrop of increased cost-of-living pressures and issues with access to insurance.”
Who will use the report?
Mr Paterson said the new iteration of the report would be a valuable resource beyond insurance industry management and professionals.
“This analysis can serve as a useful single source of truth for … financial advisers and the broader community.” He said the report would assist “individuals and families to make informed decisions to improve their collective health and financial resilience”.
“Likewise, this data will play an important role in the continued delivery and ongoing evolution of wellness and rehabilitative health services offered to Zurich’s customers, particularly given the preventable nature of many of these conditions,” Mr Paterson said.
An analysis of lifetime costs
Zurich’s new report is impressive to look at and an undoubtedly valuable resource. It is also an interesting read, even for the general public. As a fully interactive document, it is also easy to navigate, allowing laypeople to find their area of interest quickly.
One thing I would have liked to have seen included is a direct comparison of cost changes over six years. For instance, the report measures the lifetime costs of stroke at $37,043 in 2024. But how does that compare to the costs in 2018?
To find the answer, I found myself having to track down the first edition of the Cost of Care report. Fortunately, that report is still available online. (For those wondering, the lifetime costs of stroke in 2018 totalled “up to $32,411”. This represents an increase of 14 per cent over six years.)
Notwithstanding that, Cost of Care: Volume 2 is an important document. It is also a reminder that the true cost of living extends beyond this week, this month and this year. Lifetime costs are an important consideration for all.
Have you ever considered lifetime costs? How might they affect you in the long run? Let us know via the comments section below.
Also read: Cost of dying is on the rise – what you can expect to pay
Disclaimer: This article contains general information about health issues and is not advice. For health advice, consult your medical practitioner.
