Health Care in Australia
Health is a state of complete mental,
physical and social wellbeing; not
merely the absence of disease
(WHO)
Managing a Health Risk
• A medical model of health focuses on the ill
body
• A holistic model of health focuses on
changing the environmental factors which
cause health to break down
• Prevention and evidence based management
of health problems should increasingly be
the aim beyond 2000
Overall Health Expenditure
Picture
• Medicare universal safety net: 9% of Aust.
GDP spent on health
• 1 in every 14 workers employed in health
industry
• Over 2/3 of all health spending derived
from government (Cwth 45%; states 24%)
• Individuals pay about 17% of costs
• 12% via private health insurance
Health Development
• 1921 - Cwth Dept. of Health established
with quarantine responsibilities
• Formerly, states provided some hospital
funding and people took out hospital
insurance
• 1940s private medical insurance introduced
Health Development
• 1946 Cwth powers on maternity allowance,
widows pension, child endowment,
unemployment, pharmaceutical, sickness
and hospital, medical and dental services,
student and family allowances
• 1953 National Health Act: Highly
subsidised national health insurance scheme
through private health insurance taken out
by individuals
Health Insurance Act 1973
• The Whitlam government established
Medibank, a comprehensive, national,
health care system funded by a levy on
taxpayers
• Dismantled in 1975
• Reintroduced as Medicare in 1983 (National
wage case adjusted wages to take account of
Medicare levy)
Other Key Changes
• 1970s emphasis on access; introduction of
health services for women, migrants,
Aborigines
• Expansion of community health services
(aged care assessment teams; home and
community care services)
• 1980s emphasis on community care and the
development of accountability standards
• 1990s evidence based health care
State Responsibilities
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Hospitals; mental health; dental;
Systems of extended care
Child, adolescent and family health
Women’s health, health promotion
Rehabilitation,
Regulation, inspection, licensing,
monitoring of premises and personnel
State/Local
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Environmental health and hygiene
Baby health centres
Antenatal clinics
Immunisation
Community mental health urgent problem
National standards with co-ordinated
service delivery by states urgently needed
Medicare
• All Australians entitled to free medical
procedures in public hospitals
• Medical procedures in hospitals subsidised
to only 75% of Medicare Benefit Schedule
(MBS) if patient privately insured
• The MBS is a list of ‘most common fees’
charged for 1880 medical items first drawn
up by the Cwth and the AMA in 1970
Medicare
• Rebate of 75% of MBS fee payable for
medical procedure provided by a doctor
outside a hospital
• If doctor bulk bills the patient pays nothing
up front and doctor gets rebate of 75% of
MBS fee
• 58% of medical services bulk billed in
1989/90 (OECD study suggests Australians
heavy users of medical services)
Medicare Levy Does not Reflect
Cost of Health Care
• Cost of health care paid primarily through
taxation
• Medicare levy a 1.5% levy on taxable
income(+ .2 for guns buyback)
• Cwth negotiates Medicare agreements with
the states; tied grants for 5 years
• Area health services funded on the basis of
population and admin. Differences
Medicare Funding to Areas
Health Service Managers based
on
• Admin. Scale factors for more populous
areas; wage differences, accomm. costs
• Inpatient service factors: age, sex,
aboriginality, dispersion, socio-economic
factors, economic environment
• Non inpatient factors (as above)
• Revenue raising capacity - private patients
in public hospitals
Private Health Insurance
• Major function is to provide health
insurance benefits for private hospital use
• Provides more facilities for govt.; provides
extra entitlements for consumers
• 47.7% of population covered in 1985 but
only 39% in 1993
• Between 1984 and 1992 health funds raised
$22 billion and Medicare levy raised $16b.
Private Health Insurance
• Contributes about 11% of community total
health expenditure
• Two types of health funds - open, registered
organisations like Medibank Private have
91% of total membership; employed based
restricted membership organisations
• Medicare is a universal safety net and
private insurance provides extras
Profile of Privately Insured
• Older, wealthier and in better health than
their counterparts in the uninsured areas of
the community
• However, the pool of insured is getting
smaller and older
• Govt. policy aims to reverse continuing loss
of health revenue
Australia/US Comparisons
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Life expectancy higher in Australia
Health 8.6% of GDP in Aust.
Health 14.5% of GDP in US
Universal health care coverage in Aust. but
37 million people uninsured and 20 million
underinsured in the US
• Aust. the poor are most likely care users;
US the wealthy are most likely users
• Overall quality of health care appears better
Private Health Insurance
Dropping
• Consumers take it out primarily for
‘security, peace of mind’, access to private
hospital system and avoidance of waiting
lists; access to doctor of choice and
ancillary benefits (e.g. physio., dental)
• They drop it because of ‘poor value for
money’; premiums too expensive and heavy
gap payments
• Govt. initiatives to encourage take-up:
What Can’t the Insurer Insure?
• Can only insure the gap between the
Medicare rebate and the MBS
• Cannot insure the gap between the MBS fee
and what the private hospital charges
• Can only insure the gap between the
Medicare rebate and the MBS (doctor fee)
• Cannot insure the gap between the MBS
and what the doctor actually charges
Preferred Provider Arrangements
• Purchaser/provider splits
• Purchasers: Area health services, insurance
companies, hospitals
• Providers: hospitals, doctors, community
health services and health professionals
• If preferred provider arrangements entered
into the insurer can cover ‘gap’ as long as
provider only charges the MBS fee
Importance of Maintaining
Standards and Competition
• Preferred provider arrangements aim to use
Casemix data to generate more efficient
service provision
• Out come data crucial to ensure service
quality
• Community rating to remain but higher
income earners to pay higher Medicare levy
to encourage private health insurance takeup
2000 Era of Accountability
• Emphasis on identifying service outcome in
order to achieve best practice
• Health professionals will become more
accountable for identifying the clinical
outcome and cost-effectiveness of
treatments.