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

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

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)

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).

Estimated Total Health Expenditure by Source of Funds 2002 Data AIHW Health Expenditures Australia

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)

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

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.

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

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

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

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

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

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

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

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.

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

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)

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

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.