A 20 per cent tax would be slapped on all sugary drinks under a plan from Australia’s doctors to save lives and boost health coffers.

Australian Medical Association president Omar Khorshid on Wednesday unveiled plans for a radical rethink of how health is funded after the coronavirus pandemic.

The average price of drinks with no nutritional value would rise by 20 per cent in a bid to drive down rates of diabetes, obesity and poor vascular health.

A research paper from the AMA predicts the tax would lead to 16,000 fewer cases of type two diabetes, 4400 fewer cases of heart disease and 1100 fewer strokes over 25 years.

It would raise about $814 million annually to be spent on preventative health measures.

“It could save lives, and save millions of dollars in healthcare costs. It’s a win-win scenario,” Dr Khorshid told the National Press Club.

Australia consumes more than 2.4 billion litres of sugary drinks each year, enough to fill about 960 Olympic swimming pools.

Dr Khorshid said preventative health had been put on hold during the coronavirus fight but should come back into focus.

The AMA president is urging political leaders to harness the pandemic-era attitude of listening to medical advice when funding health to make Australia the world’s healthiest nation.

Dr Khorshid said governments’ claims of record spending on hospitals ignored inflation and an ageing population’s increased needs.

“These numbers are a smokescreen and today we’re calling them out,” he said.

He said a cap on spending, combined with a non-indexed funding agreement, has resulted in more than $32 billion being stripped out of hospitals over the past five years.

The AMA’s hospitals plan would fund an increase in bed capacity, targeted programs to avoid unnecessary admissions, and performance improvements.

The medical association is also pushing for a private health industry regulator as a “policeman on the beat”.

Dr Khorshid warned a major private health insurance overhaul was needed to avoid Australia’s health system becoming like that of the United States.

He said insurers – with the sector dominated by profit-seeking companies – were reducing costs through contracting doctors which could affect practitioners’ behaviour.

“We are implacably opposed to any interference from insurers in decisions made between doctors and patients,” Dr Khorshid said.

“The US health system is the worst in the world in many measures because of its extraordinary expense and the fact that there are gaps, there are inequities that we would be ashamed of if they occurred in Australia.”

The AMA also wants more doctors in Indigenous communities and more effort to increase Aboriginal and Torres Strait Islander people in the medical workforce.

-AAP