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How will measuring wellbeing outcomes foster a more equitable and sustainable future?

Bridget browne
Bridget Browne

Partner, Consulting

Contributors

5 minute read 12 May 2023

As Australia moves to adopt wellbeing budgets, how can a focus on wellbeing improve the quality of decision-making for government interventions, policies, programs and resource allocations?

In brief:
  • Governments face complex trade-offs when allocating resources at their disposal.
  • An evidence-based wellbeing framework can guide the design and implementations of interventions to improve wellbeing.
  • A wellbeing framework should be built on robust data analytics and extensive consultation with impacted populations and relevant experts.

In the context of significant health, environmental and economic crises, such as the pandemic, more frequent severe weather events and cost of living pressures, a wellbeing-based approach to policy and program development is more important than ever. These issues along with other social challenges dominate governments’ agendas. They have major economic consequences, but their potentially devastating impacts on a person’s life, mental health and environment are not adequately measured by traditional economic measures alone.

A more holistic approach to understanding how these challenges impact the lives of citizens needs to incorporate broader domains of wellbeing (such as health, social and environmental), which can then serve as a catalyst to delivering improved outcomes rather than just financial outputs.

Despite increasing recognition of the importance of non-economic outcome measures, how governments can best quantify, monitor and effectively intervene to improve wellbeing is not yet resolved.

Wellbeing frameworks can help prioritise resource allocation

Governments everywhere, including Australia, face difficult decisions and trade-offs when allocating the resources at their disposal. A robust definition and evidence-based measures of wellbeing would provide a framework to inform budgeting and contested public policy decisions. This framework would also help better target resources towards:

  • Increasing national wellbeing:

Sustainable development – Particularly balancing pursuit of growth with risks to areas such as environmental quality and work-life balance.

Improve prosperity – Sustainable growth of the national economy lifts tax revenues and therefore capacity to intervene to improve wellbeing.

  • Improving outcomes where there is greatest need:

Cohorts most in need – Wellbeing will vary across the population, with some groups at risk of enduring poor outcomes. To achieve more equitable outcomes, resources should be targeted to those cohorts with greatest need.

Domains of wellbeing most needing attention – Wellbeing indicators can highlight specific areas, such as cost of living, to which governments should allocate more resources and help justify the associated trade-offs.

  • Enhancing decision-making and accountability:

Guiding choice of more effective interventions – By carefully considering the flow from investment to outcomes, interventions can be designed to have the biggest impact. This analysis should lead to governments investing in specific interventions where they can achieve better outcomes.

Measuring impact across time to balance trade-offs – Governments need to measure the cross-temporal impacts of their policies and programs, and the associated implications for wellbeing outcomes. This allows governments to effectively consider and balance the impacts of decisions made today, to optimise outcomes for tomorrow.

Applying a Wellbeing-Based Approach

Governments at various levels have started building frameworks around wellbeing and outcome-focussed measures. Significant opportunities remain to drive better outcomes through a robust evidence-based framework and process, as illustrated in Figure 1.

Figure 1: Process to embed a wellbeing-based approach¹

wellbeing based approach

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Several broader success factors arise when implementing a wellbeing framework such as illustrated in Figure 1, including:

  • Shared understanding: Developing a shared understanding of wellbeing and the factors which influence outcomes is a key requirement for implementing a wellbeing-based approach. Key stakeholders should be consulted when defining and agreeing domains, outcomes and measures.

  • Compiling sources of information: By nature, some elements of wellbeing are subjective. Hence, measures should be developed based on a combination of quantitative and qualitative sources derived from data analysis, research and stakeholder consultation.

  • Data collection and sharing: The ability to understand drivers of outcomes and design, implement and monitor interventions is heavily dependent on the quality of the data available. Establishing legislative frameworks and supporting mechanisms to share person-centred data across agencies is critical to enabling richer insights into outcomes for population cohorts.

  • Responsibility for outcomes: It must be clear who is responsible for delivering outcomes. In some cases, responsibilities may need to be shared across agencies given the complex interplay of factors which impact wellbeing.

  • Embedding into business as usual: The implications for wellbeing outcomes should become a routine consideration when designing, prioritising and agreeing policies, programs and public investment.

Better decisions, better interventions

 

Focusing on wellbeing outcomes can significantly improve the quality of decision-making for government interventions, guiding policies, programs and resource allocation towards outcomes which holistically improve the quality of life of citizens.

By combining robust data analytics with extensive consultation with impacted populations and relevant experts, governments can embed a framework which drives evidence-based interventions and ultimately delivers a more equitable and sustainable future for all.

 

Where evidence-based frameworks have been applied by EY teams to drive improvements in wellbeing

 

EY teams have collaborated with a number of government entities, to measure wellbeing and subsequently target interventions to drive improvements in outcomes, including:

  • Oranga Tamariki, Ministry for Children, New Zealand

EY teams, in collaboration with Oranga Tamariki and other agencies, built the world’s first lifetime wellbeing model for children, which represents a whole-of-sector approach to understanding the current and future wellbeing of each child in New Zealand, and produces an associated expected fiscal outlay to guide investment decisions and monitor the impact of those decisions on wellbeing.

  • Ara Poutama Aotearoa, Department of Corrections, New Zealand

EY teams assisted the Department to develop a wellbeing-based business case, including significant analytical work to better understand the life course pathways and outcomes of Māori. This supported the development of Hōkai Nuku and Hōkai Rangi – to drive transformation of the Department.

  • Department of Veterans’ Affairs, Australia

The DVA has engaged EY teams in an ongoing project to adapt DVA’s existing longitudinal dataset and microsimulation model to capture outcomes beyond service utilisation and financial benefits. EY teams are working with DVA to build a wellbeing-based approach that applies to veterans, their families and the community to inform policy, program and service improvements and investment in improving wellbeing outcomes aligned to the DVA Wellbeing Model.

 

How EY teams can support a wellbeing approach

 

EY teams can support governments in their undertaking to develop a practical framework for wellbeing measurement, help implementation and monitoring. Our experience, capabilities and international reach can help build your capabilities to use data and evidence to understand the factors influencing wellbeing, measure and monitor outcomes, and better target policies, programs and interventions to improve outcomes and thereby the lives of all citizens.

If you’d like to have a discussion about how your organisation could benefit from wellbeing measurement, implementation and monitoring, reach out to Bridget Browne or Chris O’Hehir.


Summary 

Wellbeing budgets have significant potential to focus minds on interventions that increase national wellbeing, improve outcomes for those most in need, and enhance decision-making and accountability. In order to deliver on this potential, governments need a robust wellbeing framework built on solid data, analytics, shared understandings and clear accountabilities.

About this article

Bridget browne
Bridget Browne
Partner, Consulting
Bridget is a Partner at EY providing actuarial consulting advice to the government sector in health and human services and risk quantification.

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