HSH211 Lecture Notes - Lecture 5: Copayment, National Disability Insurance Scheme, Progressive Tax
Financing the health care system
Australia's health care funds
• Medicare
• Pharmaceutical benefits scheme (PBS)
• Private health insurance
• National disability insurance scheme (NDIS)
Spending paradox
More spending on health care does not necessarily create better outcomes. While medical
treatment is directly responsible for reducing mortality rates, the contribution that health care
makes to lowering overall mortality is quite small. Keep in mind that the health system is only one
factor among many that determine broad population health outcomes at the national level and that
the majority contributions to health outcomes are created outside the health system.
For high income countries of the world such as Australia, New Zealand and Sweden, there is no clear
answer on whether spending more in total will improve health outcomes. A more useful questions is
'Are we spending the current amount in the best way possible'?
Australia's health care spending
The Australian Institute of Health and welfare publishes a report every two years that details the
amount Australian's spend on health care, and describes how that funding is split between
government and private funders.
The Australia's health 2016 report reported funding for the most recent year data were available: in
2013-2014 financial year, Australia spent an estimated $155 billion on health care, or 9.8% of
Australia's GDP.
Government spending made up 68% of this with payments direct from users out of pocket payments
the next largest contributor , followed by insurers (private health insurance and work cover,
transport accidents commission etc.). Most government spending comes through Medicare,
although the Australian government also subsidises private health insurance premiums by up to 30%
and most state and territory governments provide additional funding for dental services.
The split in Australia's government health financing between the two top levels of government is the
source of many ongoing issues in Australian health policy. The debates between the Commonwealth
and the states and territories over health budgets are often difficult and feature strongly during
election campaigns. Indeed, electoral politics more often determines the health reform agenda
more than any attempts at logical planning. Obviously the Commonwealth has resource power
because it collects taxation and has the power to distribute funds to states and territories. Taxation
is generally in growth as the economy grows, so that gives the Commonwealth even more capacity
to develop and impose its policy initiatives. Conversely, when the economy is in recession, there is
less money to distribute and the health system is put under pressure to reduce activity.
Commonwealth-state relations are sometimes conducted harmoniously but can be acrimonious,
especially during election periods. Increasingly, the states and territories, and consumers, and
demanding greater input to decision making about health budgets and use various forms of
bargaining, including the media/social media, to influence decision making.
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Document Summary
Australia"s health care funds: medicare, pharmaceutical benefits scheme (pbs, private health insurance, national disability insurance scheme (ndis) More spending on health care does not necessarily create better outcomes. While medical treatment is directly responsible for reducing mortality rates, the contribution that health care makes to lowering overall mortality is quite small. Keep in mind that the health system is only one factor among many that determine broad population health outcomes at the national level and that the majority contributions to health outcomes are created outside the health system. For high income countries of the world such as australia, new zealand and sweden, there is no clear answer on whether spending more in total will improve health outcomes. The australian institute of health and welfare publishes a report every two years that details the amount australian"s spend on health care, and describes how that funding is split between government and private funders.
