Australian Healthcare System

1. Australian Healthcare System Tracey Lynn Koehlmoos, PhD, MHA Lecture 12 HSCI 609 Comparative International Health Systems

2. The Land Down Under • Commonwealth of Australia • Capital: Canberra • Type: Democratic, federal state system, the British monarch is sovereign • Smallest continent, sixth largest country • 6 states, 2 territories

3. Population Statistics • Population: 20,264,000 (2006) • Infant Mortality: 4.63 per 1,000 • Life Expectancy: 77.6 male/83.5 female • Population >65: 13.1% • Health Expenditures as % of GDP: 9.3 (2003) • Per Capita Health Expenditure: $2,699 (US)

4. Organization • Commonwealth government: establishes policies through the… • Department of Health and Aging, which subsidizes health services provided by… • State and Territory governments & the private sector. • State and Territory governments: provide public hospital services & work closely with the national gov’t and professional bodies to ensure quality • Local Gov’t: environmental control (garbage, clean air/water), home care & preventive services (immunization).

5. Estimated Total Health Expenditure by Source of Funds 2002 Data AIHW Health Expenditures Australia 2001-2002

6. Health Expenditures by Category • Hospitals: 35% • Physician Services: 17.9% • Pharmaceuticals: 14.1% • Dental Services: 5.4% • Community and Public Health: 5.4% • Admin and R&D: 5.4% (2002)

7. Three Pronged Approach to Health Care Coverage • Medicare: Common Wealth Medical Benefits Scheme (CWMBS) • Pharmaceutical Benefits Scheme (PBS) • Private Insurance Reimbursement

8. Medicare Basic tenet: universal access to care, regardless of ability to pay Prior to 1984, Australia was the only country to ever have universal healthcare and then throw away the program. Walks a high wire between public and private providers and payers.

9. Medicare Three main objectives: 1) Fund medical services 2) Fund pharmaceutical benefits 3) Fund public hospital care All permanent Australian residents are entitled to free public hospital services

10. Medicare Levy • Started in 1984 • Provides 27% of Medicare funding (the remainder of Medicare funding comes from general taxes) • 1.5% of taxable income for individuals earning above a certain threshold • Taxpayers w/ high incomes who do NOT have private health insurance pay an additional 1% Medicare Levy

11. Pharmaceutical Benefits Scheme • Covers 90% of prescriptions outside of the hospital setting • The government approves the formulary, one of the criterion for approval is cost effectiveness and government negotiates a rate with the drug company • Moderate co-payments based on income

12. Private Insurance • Strongly encouraged by the Australian government • 45% of population has Private Insurance • Government offers 30% rebate (35% for elderly starting in 2006) and encourages early commitment to a private insurance company (before age 30) • Provides shorter waiting times, more physician/hospital choice, additional services like dentistry

13. Hospitals • Public Hospitals: 746 (2002) • 70% of beds are in public hospitals • All residents of Aus have the right to treatment at public hospitals at no charge • Salaried hospitalists • Funded by state/territory revenues and by specific purpose payments from the Commonwealth • Private Hospitals: 560 (2002) • Traditionally w/religious affiliations • Growing for-profit sector • No emergency services

14. Physicians • Commonwealth sets FFS payment schedule • 2.5 physicians per 1000 (urban/rural disparities) • GP’s • 34,500 in 2002 • Serve a gatekeeper role to hospital based services • Reimbursed fee-for-service, private practice • Specialists • 15,300 in 2002 • Some are fee-for-service • Many salaried hospitalists • Concentrated in urban areas

15. Nurses in Australia • 10.2 nurses per 1000 population (high) • Two levels of nursing in Australia: • Registered nurses: university degree trained • Enrolled nurses: advanced certificate & diploma level courses in technical colleges • Nursing registration is applicable across state/territorial boundaries

16. Special Approach to Rural Needs • Royal Flying Doctor Service: physicians and other providers flown to remote regions • Regional Health Services: community identified priorities for health and aged care • Aboriginal and Torres Strait Islander community controlled health services to meet the needs of the indigenous population.

17. Mental Healthcare • Historically, mental health services have existed in a separate parallel system to physical/curative healthcare • 23 Public psychiatric hospitals (2002) • Currently, Commonwealth, State and Local gov’ts attempting to mainstream mental health services • Development of new settings: 223 (in 2002) community based mental health facilities • Sounds similar to…US

18. Long Term Care • Home health: community based care mostly through the private or voluntary sector • Residential care: 50% non-government operated (private or religious based) w/ large government subsidies • Residential care, “aged care home” funding, is primarily a Commonwealth gov’t responsibility • Individual contributes via flat user fees and income tested fees (typically 13% of total)

19. Compared to US • Parallel system for mental health • Public and Private insurance coexist • Unlike the US, Australia screens medications for cost effectiveness before allow them to be sold in-country • Like US, concerns about an increasing number of elderly citizens

20. Summary • What is really going on in Australia? Universal public insurance coexists in a large private insurance environment. • With a smaller and more homogenous population, the needs and challenges Down Under are different from those in the US. • However, the Australian model is worthy of US study when we look toward reform in our health services sector.