An overhaul of health policy in Australia could save taxpayers billions of dollars each year, analysis by a social policy think-tank suggests.
The study calculated the savings that could be achieved if the health action plan, proposed by the World Health Organisation (WHO) in 2008, was implemented.
The WHO report said the health gap between rich and poor could be closed within a generation if the international community addressed social inequality factors such as education, employment and housing.
Analysis commissioned by Catholic Health Australia found the most socially disadvantaged people in Australia are twice as likely to suffer long-term chronic illness as the least disadvantaged.
That equated to 500,000 Australians, and $2.3 billion in hospital costs that could be saved each year if the group was lifted above the poverty line, The Cost of Inaction on the Social Determinants of Health report said.
Social policies to help the at-risk group to finish school and gain secure employment could result in 60,000 fewer people being admitted to hospital each year, the figures suggest.
As a result, access to Medicare services would drop by 5.5 million a year, delivering a saving of $2.3 billion.
And the same number of Pharmaceutical Benefit Scheme scripts would no longer be needed, saving $185 million.
In addition, an extra 170,000 Australians would enter the workforce each year, generating $8 billion in additional earnings and $4 billion worth of savings in welfare support payments.
Catholic Health Australia chief executive officer Martin Laverty says the staggering opportunities could be realised if a new approach to health policy was adopted.
'The opportunity requires action outside of the formal health system,' he said, flagging a 'health in all policies' approach.
A parliamentary inquiry to better understand the health inequalities in Australia was also needed, he said.