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 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 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 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 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 in the US

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: higher Medicare levy for high income earners; 30% rebate for private cover; lifetime community rating

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 take- up

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.