Except spending, there are lots of factors that define healthcare efficiency such as environment, education (awareness), lifestyle, established standards, and so on. As a developed country, Australia has to cope with issues that strike most countries of the first world: the ageing of the population, obesity and chronic diseases such as diabetes, cancer, heart disease, and so on.
National health program called Medicare (launched in 1984) is a comprehensive system that cares for people of all kinds of incomes. The system doesn’t rely only on the government’s funds. The healthcare budget is formed partly with the funds of individuals (taxpayers): employed citizens and residents of Australia and New Zealand pay a special levy that is equal to 2% of their taxable income. The levy rate is calculated depending on the person’s income. For example:
- levy exemption if the annual taxable income is lower than 20.896k AUD (33.044k AUD for seniors/pensioners);
- levy reduction if the annual taxable income is between 20.896k AUD and 26.121k AUD (33.044k AUD and 41.306k AUD for seniors/pensioners);
- plus 1 percent to the levy for top earners whose salaries exceed 90k AUD (for singles) or 180k AUD (for those having families); the surcharge is applied only if the earner doesn’t use a private insurance.
The mentioned levy contributes only a small part to the fund. The remainder is filled in by the government (from general taxation). Accumulated funds are then utilised for distributing healthcare subsidies that cover most of the expenses in public healthcare facilities. Medicare covers almost 100% of expenses for in-patient treatments and up to ¾ of expenses for the primary healthcare (general practitioners). The remainder must be covered directly from the pocket of a patient; however, most of the Australians rely on private top-up insurances for covering this remainder. Even on this stage, the government cooperates with private insurers for giving reimbursements (equal to 30% and more) to holders of premium policies.
Australians are free to choose where to undergo treatment: either in state public facilities or in private ones; however, in the latter case, the government gives compensation only to the cost level established for the state facilities. The Medicare covers not all kinds of possible medical expenses. For example, it won’t compensate costs connected with dentistry, ambulance transportation, and optometry. These costs can be covered only by private insurances.
Prices for medical treatment and procedures known as schedule fees are established by the government, and the size of the subsidy is calculated according to them. Nevertheless, private practitioners are allowed to set their own higher fees (the difference lies on a patient’s shoulders). The process of payment looks this way: the patient who undergoes, for example, a surgery can either pay from their own pocket and then claim the benefit back from the Medicare or claim the Medicare benefit right away before undergoing the surgery. If you choose the latter way which is also called bulk billing, you need to see your doctor first and sign a special form. Then the Medicare issues a cheque which you have to give to your doctor. 80% of all payments are made in the bulk billing style.
Involving funds from the public is a wise step that helps the state to bring up responsible patients who know the cost of treatment, and, therefore, value their health. If look at the health expenditure by households (out-of-pocket expenditure as a percentage of total expenditure), it will be higher (57%) of than in other developed countries (56% in the UK and 22% in the US).
Services of Medicare
- Pharmaceutical Benefits Scheme: the Australians who rely on medication a lot can get discounts for buying prescription pharmaceutical products; regardless of how much the drugs cost, they pay only a pre-established co-payment.
- Registration for Childhood Immunisation. Families register their children (younger than 7 YO) with the Medicare to ensure their kids’ immunisation schedule is synchronised with the state’s plan.
- Registration for Organ Donorship: any citizen or a resident who would like to serve as an organ donor inside Australia must get registered in the specialised state registrar.
Only citizens and residents have access to the Medicare. The Australian government has agreements with certain countries (for example, the UK or Ireland) that allow foreign citizens holding permanent visas to Australia to access Medicare. If you have applied for one of the Australian permanent visas, you should undergo registration with the Medicare as soon as you arrive in AU. After you provide basic documentation, you get the Medicare card on which you can register up to 5 your dependents. Such card not only simplifies access to your personal medical information and bulk bills from GPs but also works as your “pass” to treatment in public medical facilities and helps claim benefits from Medicare.
Managing Personal Medical Data
Australia uses a comfortable online healthcare database: every patient can have their personal medical account where all their personal medical data is being stored. This online storage called eHealth Record simplifies collecting and managing such information as undergone treatments, immunisation profile, diagnosed diseases, results of laboratory analyses, physical data, and so on. Such advanced approach to personalised healthcare not only simplifies assigning treatment when all anamnesis information is available but also prevents loss of important data, saves time and encourages responsibility and self-organization of patients.
Both state and territory governments own a network of public clinics and take care of such sectors as school health, awareness, community programs, dentistry, mental health, and so on. The Australians can get treatments in such facilities free of charge or according to the level of their subsidy. If you aren’t enrolled in Medicare (you come as a private patient), you will have to pay for some services at public facilities from your own pocket (you will get charged by the doctor directly). But on the other hand, as a private patient you are able to choose the doctor, unlike a “public” patient who has to satisfy themself with the assigned one.
Public hospitals vary in size. Some of them provide only urgent treatment; others specialise in long-term rehabilitation care. Emergency rooms can be found all across the country in more than 700 public clinics. There are also 17 specialty mental health hospitals. 65% of a general number of beds (over 87 thousand) is in the public sector.
Australia’s private healthcare market is highly competitive and offers the assortment of services common for all developed countries. Many top earners prefer private clinics and private insurances because they find this less limiting: they are free to choose doctors and clinics as well as the time and place of their treatment. The third part of all hospital beds (30%) in Australia is in private hands. Family doctors are usually private in this country.
The private healthcare sector is constantly developing in Australia: the number of for-profit and non-profit firms that operate private clinics increases. Most of them provide only day care, but there are also overnight care facilities. The total number of private establishments is over 590. As mentioned before, patients enrolled at Medicare are free to choose between a private and a public hospital, but the Medicare will cover the costs only to the level of a public facility.
More than 30 private insurers offer services in Australia; the state-owned healthcare fund called Medibank is the biggest provider among them. This for-profit organization works under regulations common for all private insurance providers. Other insurance companies can be either for-profit (for instance, BUPA, NIB, and HCF) or non-profit (HCF Insurance and GMHBA).
In Australia, there are 2 types of insurance plans: budget hospital policies and comprehensive treatment plans (for those who want to stand apart from Medicare). Their goal is to cover the remainder after the Medicare compensates its part of the healthcare treatment in the public facility or to cover ¼ of the inpatient cost in a private facility. When you choose the plan, you should focus on benefits that are really essential for you (for example, brisk setup, cover for injuries, accidents or maternity).
The government uses a carrot-and-stick policy to inculcate the need in private insurance in the Australians. First about the carrot: the government gives 30% rebate for the premiums regardless of the kind of policy, insurer and the level of your income. This scheme turned to be very effective and encouraged lots of Australians to switch over to private insurances.
A foreigner who arrives in Australia after being granted a permanent visa can get this rebate only if their insurer is government-approved (as a registered fund). It is important to bear in mind that you can get the rebate regardless of age if you already live down under on a permanent visa. The situation is different for foreigners who shift to Australia on a permanent base as retirees (older than 55). They don’t qualify for the rebate and have to buy a comprehensive private treatment policy in order to qualify for getting the visa.
Now about the stick. The government encourages the Australians to buy private medical insurances as earlier as possible. For this reason the Lifetime Health Cover scheme was introduced: if a young person forgets to buy private hospital care insurance before the 1st of July following their 30th birthday, premiums get 2% more expensive with each missed year. This scheme’s duration is 10 years. Then, when young people finally decide to buy their first cover, it turns to be much expensive: missed 15 years – overpay 30%.
Healthcare system in AU managed to evolve into efficient mechanism without messing with such common for other developed countries issues as outrageously high prices, mistreatment of people in need and those sick with chronic diseases, poor choice, delays of treatment, and so on. Another popular indicator where Australia performs very well is the infant mortality rate which is 3 per 1 thousand live births (for comparison: 4 in the UK and 6 in the US).
Wellbeing of the nation costs the Australian government a lot, and current health debates see suggestions to set up a minimum (nominal) charge for seeing general practitioners or visiting the emergency room. The government already understands that charging the Australians is important for keeping the healthcare mechanism sustainable and preventing it from wearing out. Direct charges would be more effective (and just) than increasing general taxes.
The government sees relief from the burden in widening the private healthcare/insurance options. Now it encourages the development of private insurance sector, and new funds and insurance plans mushroom all over the state. Thanks to this competition, the cost of premiums is kept low and affordable. The state tries to keep the healthcare system away from politics and open to vivid market trends. Australia scored a success in health awareness and fostering self-management and personal financial responsibility of patients.