Comparison between the Australian and US Healthcare System Aussie Features US Features
Comparison between the Australian and US Healthcare System Aussie Features US Features
Comparison between the Australian and US Healthcare System
Aussie Features US Features
REFORM TIMELINESAustralia has moved through numerous approaches to health care financing:
Private insurance with public subsidies (pre-1974)
Publicly financed national universal health insurance (Medibank, 1974–1976)
Predominantly private insurance with public subsidies (1976–1984)
Publicly financed national universal health insurance (Medicare, 1984–1996)
Publicly financed national universal health insurance with publicly subsidized private health insurance (1996–2013)
Publicly financed national universal health insurance with means testing for private insurance subsidies (2013 to present)Click Here For More Details on How to Work on this Paper……
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O Similar to Australia, U.S. system is fragmented between central and state governments.
U.S. publically funded Medicare only applies to certain populations, in Australia, there is universal insurance.
ROLE of GOVERNMENTThe national government, the Commonwealth of Australia, holds the major revenue-raising powers, so states rely on financial transfers to provide services. The states operate public hospitals (which account for about two thirds of all hospitalizations and provide emergency department visits without charge), though funding them is a joint responsibility of both levels of government. The Commonwealth has responsibility for paying benefits through Medicare (for out-of-hospital medical care and in-hospital private medical services) and for the Pharmaceutical Benefits Scheme (covering most prescribed drugs), but funding arrangements for other services often involve both levels of government. The result is a complex set of overlapping and fragmented responsibilities. US similaritiesStates (or local government) operate public hospitals.
Mix of federal and state government financing, similar to U.S. Medicaid
Similar: complex set of overlapping and fragmented responsibilities.
INNOVATIONSInnovations have contributed to health system performance in terms of access, improved quality, and reasonable costs. These include requiring evidence of cost-effectiveness as a basis for public funding (for pharmaceuticals beginning in 1993 and medical procedures beginning in 1998), funding public hospitals on the basis of case-mix–adjusted volume (first introduced in the State of Victoria in 1993), and national strategies for immunization, cancer screening, and reducing tobacco use. These successes have addressed specific public health problems or efficiency within particular funding streams rather than taking a systemwide perspective. A recent review concluded that “the complex split of government roles means no single level of government has all the policy levers needed to ensure a cohesive health system” and that the people who suffer the most from the lack of coordination are “patients with chronic and complex conditions, such as diabetes, cancer and mental illness, who regularly move from one health service to another.”3 Different from US: more central authority. Requiring evidence of cost effectiveness (US FDA cannot consider cost)US Medicare: has been slow to consider cost or outcomes as basis of payment.
GATE KEEPERSPrimary care physicians (general practitioners, or GPs) play a central role as gatekeepers to the rest of the system; all specialist care requires a GP referral. More than 80% of all GP consultations are paid for by government with no out-of-pocket costs for patients (“bulk billing,” in Australian parlance). Patients whose care is most likely to be bulk billed are those receiving government welfare payments, children, low-income groups, and people living in urban areas where there’s no GP shortage. Although this system would seem to place primary care in a strong position to coordinate and manage care, such coordination has not been achieved. GPs work mainly in private practice, receiving fee-for-service payments that are an incentive to maximize volume rather than continuity and integration. Although government payments have recently been introduced for telehealth consultations, some services provided by allied health professionals (e.g., physiotherapy, psychology, speech pathology), and multidisciplinary case conferences, such government-funded services, continue to contribute little to overall service volume and provider incomes. Australians are not linked to any one provider or group of providers through registration, although most feel that they have a regular place of care.
SUGGESTIONS FOR REFORMSuch a fragmented system can be reformed through cooperative arrangements and negotiation or through unilateral action by the Commonwealth or the states. The National Health Reform Agreement, the outcome of 3 years of negotiations, was signed by all states and the Commonwealth in 2011. It established a new basis for the Commonwealth’s contribution to public hospital funding, based on organizations’ case mix and known as activity-based funding. A new independent authority was established to determine the National Efficient Price for each case type, deriving prices from detailed cost reports from public hospitals in all states. Previously, the Commonwealth share had been negotiated with each state — a process driven more by politics than by evidence. The agreement also attempted to strengthen primary care by establishing 61 new entities called Medicare Locals. These entities (which have since been replaced by new agencies) were to facilitate access to allied health care, identify underserved groups in their community (particularly those with chronic diseases), and ease transitions between hospital and community
FUNDINGFunding consisted of core grants for assessment of population needs and planning and program grants for initiatives with such goals as improved after-hours care and mental health services. Although this funding gave Medicare Locals some leverage, the bulk of primary care funding continued to support fee-for-service visits and did not flow through the new organizations, which therefore gained little traction for improving care integration. Most senior managers and policymakers believed that these reforms generally represented progress but didn’t go far enough.4 Medicare Locals had the potential to evolve toward holding the budgets as purchasers of health services for their populations, and some Medicare Locals and state health authorities were taking new approaches to integrating care. Yet a national trial and evaluation of coordinated care for diabetes showed that achieving better outcomes while reducing costs is challenging — and that the tested model probably wouldn’t be cost-effective if implemented broadly.5
POST 2013-LATEST REFORMSA change in national government in 2013 prompted substantial revision of many aspects of reform. In primary care, Medicare Locals were disbanded, and on July 1, 2015, they were replaced by 31 Primary Health Networks. The call for applications to establish these networks emphasized the eligibility of various organizations, including private health insurance funds, as contractors. The successful bids came mainly from consortia of Medicare Locals, some of them including insurers as partners. The networks may yet develop the potential to become purchasers and thereby provide impetus for integrated care, but given the challenge of setting up new entities, that transformation remains aspirational.
The new government has also reversed the agreement that provided additional Commonwealth funding to public hospitals on the basis of efficient cost increases and volume growth. Beginning in July 2017, the Commonwealth’s additional contributions will be based only on population growth and inflation. This change presents a major challenge for states, whose public-hospital expenditure is a major budgetary commitment that isn’t matched by revenue-raising capability. It will therefore severely limit states’ flexibility in funding other programs, such as education and transportation, and in developing innovative health programs that might improve care integration and coordination
In addition, a new agreement with the retail pharmacy sector suggests that pharmacists will begin playing a greater role in primary care, including chronic-disease management. Although the details haven’t been announced, this agreement could represent yet another missed opportunity for improving primary care coordination and may lead to further fragmentation.
An underlying concern is the extent to which the Commonwealth government intends to reduce its share of health care expenditure. In 2014, it attempted to reduce its outlays on Medicare by imposing patient copayments for GP visits — a tactic that was eventually dropped in the face of concerted opposition. But other cost-reduction avenues remain open, and recent announcements have, for example, targeted the cost of pharmaceuticals. Since 2002, the Commonwealth has produced a series of Intergenerational Reports predicting what government expenditures will be over the next 40 years if current policies remain in place. These reports show significant increases in health care spending, but they focus on the Commonwealth budget rather than the entire health sector. If reducing Commonwealth expenditures remains the primary objective for the health portfolio, it could lead to further fragmentation of care and missed opportunities for developing a coherent and efficient health system.
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