How does Australian Healthcare work?

[Virgil the Roman]

I'm curious I've read that you folks from the good nation of Australia, have universal health-care, and pay reasonable amounts on it with taxes subsidizing most of the health care. Are the taxes extremely high? Is this a government plan or a government system which pays private healthcare companies? I honestly only half-understand you folks' healthcare system. From what it sounds like, it sounds as if, it could work in the United States and be AWESOME! However, until I know what it entails, how it functions, or what it does, I will not know how good or bad it really is. Your help would be most appreciated!
with Agape,
Matthew

 

[foxsta]

I think this is something for HofB to start lol! She seems the most well-informed and best at giving in depth and concise answers I'll add from there...other than that I would be waffling

 

[helenofbritain]

Brace yourself, this is going to take a while...

I'm curious I've read that you folks from the good nation of Australia, have universal health-care, and pay reasonable amounts on it with taxes subsidizing most of the health care. Are the taxes extremely high?

Apparently, compared with America, yes they are. But we don't really notice it I guess. Here are the tax rates for the 07/08 Financial Year (they keep going down becasue we keep getting tax cuts)


Taxable income
Tax on this income
$1 – $6,000
Nil
$6,001 – $30,000
15c for each $1 over $6,000
$30,001 – $75,000
$3,600 plus 30c for each $1 over $30,000
$75,001 – $150,000
$17,100 plus 40c for each $1 over $75,000
$150,001 and over
$47,100 plus 45c for each $1 over $150,000


^ That being said, Medicare is mostly paid for by the Medicare Levy.

Source: Australian Tax Office

What is the Medicare Levy?

Medicare is the scheme that gives Australian residents access to health care.
To help fund the scheme, resident taxpayers are subject to a Medicare levy.
Normally, we calculate your Medicare levy at the rate of 1.5% of your taxable income. A variation to this calculation may occur in certain circumstances.
Who has to pay the Medicare levy?

Most Australians are liable to pay the Medicare levy. The standard Medicare levy is 1.5% of your taxable income. However, this may vary according to your circumstances.

In some cases you may be exempt from the levy or it may be reduced.
To work out if you are eligible for the exemption or the reduction based on family income, read:

• Medicare levy reduction for people on low incomes, and
• Medicare levy exemption.

What is the Medicare levy surcharge?

Individuals and families on incomes above the Medicare levy surcharge thresholds ($50 000 for singles and $100 000 for couples), who do not have private patient hospital cover, may have to pay the Medicare levy surcharge.
This surcharge is in addition to the Medicare levy. We calculate it at the rate of 1% of your taxable income (including your total reportable fringe benefits). You will need to read Medicare levy surcharge to see if you have to pay the surcharge.

Clear as mud?

Is this a government plan or a government system which pays private healthcare companies?

Well, it's a little bit complicated, but on the whole it's a government system. I will explain further later on.

I honestly only half-understand you folks' healthcare system. From what it sounds like, it sounds as if, it could work in the United States and be AWESOME! However, until I know what it entails, how it functions, or what it does, I will not know how good or bad it really is. Your help would be most appreciated!
with Agape,
Matthew

Strap yourself in! Prepare for information overload!

So what is Medicare?

Source: http://www.medicare.gov.au/about/whatwedo/medicare.shtml
Medicare

Medicare is Australia’s universal health care system introduced in 1984 to provide eligible Australian residents with affordable, accessible and high-quality health care.
Medicare was established based on the understanding that all Australians should contribute to the cost of health care according to their ability to pay. It is financed through progressive income tax and an income-related Medicare levy.
Medicare provides access to:

• free treatment as a public (Medicare) patient in a public hospital, and
• free or subsidised treatment by medical practitioners including general practitioners, specialists, participating optometrists or dentists (for specified services only)

The Department of Health and Ageing (DoHA) is responsible for the policy development of Medicare and the Medicare Benefits Schedule. Medicare Australia is responsible for:

• ensuring Medicare benefits are paid to eligible health care consumers for services provided by eligible medical practitioners, and
• assessing and paying Medicare benefits for a range of medical services, whether provided in or out of hospital, based on a schedule of fees determined by DoHA in consultation with professional bodies.

Medicare Australia is also involved in detecting and preventing fraud and abuse of the Medicare system and registering and recording details of medical practitioners including:

• those eligible to have Medicare benefits paid for their services, or
• those not entitled to have Medicare benefits paid for their services but who are able to raise valid referrals or requests for specialist services for Medicare benefit purposes.

As of 30 June 2005 there were over 20.5 million people registered for Medicare benefits and over 236 million services were processed in the July 2004-June 2005 period.

How much does it cost, and what does it cover?

Source: The Department of Health and Ageing Factbook 2006
Australia spends around $79 billion a year on health. This figure, which is nearly 10% of Australia’s Gross Domestic Product (GDP), includes spending on everything from bandages, vitamins and pain relievers, to major operations, and medical research. The Australian Government contributes 45% of the nation's spending on health services.

...

This chart shows where Australia’s health dollar goes. Public hospitals account for the largest share ($20.4b or 25.9%) of total expenditure on health in Australia by all sources (i.e. the Australian Government; state, territory and local governments; and the non-government sector). Other major areas of expenditure are medical services ($13.0b), pharmaceuticals ($10.9b), private hospitals ($6.1b), high level residential aged care and dental services ($5.0b) (AIHW 2005).

Note: The category "other" includes expenditure on aids and appliances, ambulance services, and other health professional services not included under medical services.


......

The major source of funds for health expenditure in Australia is the Australian Government, which spent $35.7 billion (of a total of $78.6 billion) on health in 2003-04. Health expenditure by the private sector (individuals’ out-of-pocket expenses, private health funds and other insurance funds) was $25.1 billion. State (and local) governments spent $17.7 billion on health.

Over the 10 years from 1993-94, the Australian Government share of total health expenditure has risen from 45.1% to 45.5% and the state (and local) government share has risen from 21.3% to 22.6%. Private sector expenditure declined from 33.6% to 32.0% of total health expenditure.

The Australian Government share began increasing at a greater rate from 1997-98. From 2000-01, the private sector share of total expenditure also began a trend upwards (AIHW 2005).

......

The largest category of Medicare Benefits Schedule expenditure is GP (General Practitioner) attendances, including enhanced primary care attendances.

Around three quarters of all services provided were for GP attendances and pathology. Together, these account for about half of all benefit payments. In 2004-05, there were 98.2 million GP consultations at an average cost to the government of around $34 each. The 77.7 million pathology services cost government an average of around $20 each (DoHA 2005d).

In terms of the average cost of service to the government, the most expensive MBS services were radiation therapy ($135), operations ($132), assistance in operations ($122), anaesthetics ($109), diagnostic imaging ($105) and obstetrics ($99). Of these services, diagnostic imaging accounts for 6% of total MBS services, the others less than 3% each (DoHA 2005d).

....

Private hospitals account for most of the expenditure by private health insurance (PHI) funds (48.6%), followed by dental services (12.6%) and medical services (9.7%). In 2003-04, these categories accounted for $3,972 million or 71% of total health expenditure by PHI funds.

These figures exclude that proportion of PHI funds expenditure indirectly funded by the Australian Government through the PHI Rebates.

"Other health expenditure" in this chart includes community health, hospital insurance administration and ambulance.


......

Pharmaceuticals account for the highest proportion of out-of-pocket individual health expenditure, with $5.1 billion (almost one-third) of the total $15.6 billion.

Pharmaceutical expenditure includes PBS subsidised medicines, over-the-counter medicines, PBS medicines priced below the PBS subsidised threshold, vitamins, and complementary medicines. Dental services account for 20.1% of out-of-pocket individual health expenditure and aids and appliances (including glasses and hearing aids) is the third largest at 13.5% (AIHW 2005).

Figures are net of any government or non-government rebates (e.g. Medicare rebates, private health fund rebates motor vehicle/workers’ compensation payments, etc.).

Note 1: Adjusted for Medical Expenses Tax Offsets ($291 million).


.....

At December 2005, 8.8 million Australians were covered by private hospital insurance. There were 8.6 million Australians with ancillary cover (including 1.3 million with ancillary only cover) for services such as dental, physiotherapy, optical, podiatry, chiropractic, ambulance, hearing aids, complementary therapies, etc.

......

For private patients, the proportion of medical services performed in hospitals with no out-of-pocket cost to the consumer has increased from 79.4% in September 2002 to 82.7% in December 2005.

Although fewer medical services are incurring out-of-pocket expenses, the average gap payment (where a gap was paid) has risen by $34.32, or 44%, from $78.80 in September 2002 to $113.12 in December 2005 (PHIAC December 2005c).

When all medical services, tests, hospital accommodation, booking/admission fees are taken into account, the average gap payment per hospital episode (where there was a gap) was $720 (excluding any excess or copayment amounts) (DoHA 2005).

Increases in the average payment by patients for services where there remained an out-of-pocket cost should be viewed with caution. Doctors who charge smaller amounts above the MBS schedule fee are likely to be among the first to sign up to no gap schemes or arrangements (PHIAC December 2005c).

What about private health insurance?
Many people get private helath insurance on top of their Medicare cover. Medicare completely covers anything that happens in a hospital, and the scheduled fee for seeing a doctor.

Private health incurance covers lots of things, and the easiest way to explain it is for you to have a look at NIB, which is one of Australia's private health insurance companies (the others are Medibank Private, MBF, HCF, Manchester Unity and AHM). The link I have provided takes you straightto the family cover section of their site, and if you click on "more info" for any of those, you'll see what can be covered. Obviously the "top cover" option will show you absolutely everything , if you're curious

What about medicine?
The Australian government funds the Pharaceutical Benefits Scheme as part of its Medicare coverage - basically it is able to buy medicines in bulk (at a cheaper rate) and then subsidise them for us. This is the PBS homepage - if you know the name of a medicince just use the search engine to find out the options available here, and how much you would have to pay for them. You doing this will be mcuh easier than me trying to explain it to you.


How do we compare internationally? Well...

In 2002-03, total per capita health expenditure in Australia was US$1,960, which ranked Australia in the middle (17th) of the 30 OECD countries, close to the OECD average of US$2,008.

Australia's per capita heath expenditure was well below the average US$2,510 for the 10 OECD countries with similar socio-economic structures, health systems and standards of living (Canada, the United States, New Zealand, Japan, France, Germany, the Netherlands, Sweden and the United Kingdom) (OECD 2005a). Australia's health system, for below average per capita health expenditure, is delivering above average health outcomes.

.......

In Australia in 2002, total health expenditure as a proportion of GDP (9.3%) was the ninth highest in the OECD. It was higher than the average for all OECD countries (8.5%) and slightly below the average for the ten OECD countries with similar socio-economic structures, health systems and standards of living. The United States, with 14.6% of GDP spent on health was the highest spending country.

The private health expenditure sector in Australia is one of the largest in the OECD. At 32% of total health expenditure, the private sector is the eighth highest in the OECD and the third highest of the ten comparable OECD countries (behind the US with 55% and the Netherlands with 38%). The individual, out-of-pocket share of total health expenditure in Australia (21%) is the ninth highest in the OECD and the highest of all ten comparable countries (including the US).

In 2002, Australia, Sweden and the Netherlands each spent 9.3% of GDP on health expenditure; however, the proportion of private and public expenditure differed between these countries. Sweden had the highest proportion of public health expenditure with 7.9%, Netherlands the lowest with 5.8%, while Australia was in the middle with 6.3%. Australian public health expenditure was below the OECD average of 8.5%.

Public expenditure includes: expenditure from general government revenues and social contributions in countries with social insurance based funding (e.g. France and Germany); and expenditure from government revenues in countries where central or local governments are responsible for financing health services (e.g. Finland and the United Kingdom).

Private sources consist of out-of-pocket payments of households, third-party payment arrangements that might come in different forms of private health insurance (often funded by employers and subsidised by exemption from the calculation of taxable income by employees), employers’ direct health benefits such as occupational health care, and other direct benefits provided by charities and the like (OECD 2005a).

Well, if you've made it this far you're doing well I think you asking specific questions and me giving you answers will probably work best. Otherwise I'll just be waffling at you...

 

[helenofbritain]

I think this is something for HofB to start lol! She seems the most well-informed and best at giving in depth and concise answers I'll add from there...other than that I would be waffling

Thanks Ben

Though I think I just disproved your theory...

 

[helenofbritain]

OK, so that was the facts-and-figures post, now I'd better give you an end user post.

So, I need to go to the doctor.

The "scheduled fee" to see a doctor is . The Medicare rebate is 85%. So, I pay my money at the doctor's and drive across town to the medicare office and they give me $32.15 back. However, Medicare only covers 85% of the scheduled fee. If a doctor wants to charge more than that, they can.

Also - there is something called 'bulk billing', where the fee the doctor charges is only the amount of the medicare rebate. So peple with Health Care Cards can see a doctor and not pay any money at all - they just present their Medicare Card.



If I have broken my leg, I go to hospital and they fix me up. End of.

If I have private health insurance and I've broken my leg, I go to hospital and they fix me up. And...

Source: http://www.nib.com.au/Hospital/Hospital.aspx

Going to hospital is more than just checking in, having the procedure, and going home.

The hospital you choose, amount of excess you pay, the level of your cover and whether your treatment is spread over separate admissions are just some of the things that can affect how much you pay for your hospital visit.

You should always check with NIB before you go to hospital, to avoid any nasty surprises. It's also best to find out if you can claim workers' compensation or from a third party before you claim under your cover, as NIB will be unable to pay your benefit.

If you choose a public hospital or an NIB agreement private hospital for a procedure on your cover, you shouldn't have to pay out of pocket expenses for the following hospital-related services:

Accommodation (room/bed) costs in a private or public hospital
Meals for patients
Use of theatre for your procedure
Labour ward if you're having a baby (depending on your cover)
Nurses
Intensive care (depending on your cover)
Surgically implanted prostheses which are Government approved and are on the no 'gap' list (ask your doctor or hospital for more information)

.....
No matter what cover you've got, it's possible you'll have to pay something towards going to hospital. It's usually the difference between what NIB pays for, and the total cost of your stay in hospital. They're known as out of pocket expenses.

An excess is the amount you elect to pay towards your hospital stay, before we pay a benefit. It's one of the things you can't claim back. Selecting an excess means your contributions are lower.

The excess is only payable if you, or someone on your membership, go to hospital - it does not apply to extras cover.

Depending on your health cover, you'll have to pay the excess each time you are admitted to hospital. But we cap it to a set amount per year. The amount varies depending on your health cover.

Before going to hospital, you should always check your cover's hospital excess.

(NIB has three options for hospital excess: No excess, $250 (capped at $500 per calendar year) and $500 (capped at $1000 per calendar year. So assuming that there is a gap btween what medicare covers and what NIB covers, the most a patient will pay is the excess they agreed to. Opting for a higher excess lowers the cost of the insurance premium. )

 

[foxsta]

Good enough lol! Couldn't have done better if I tried and no, that wasn't waffling lol! You haven't disproved the theory at all haha!

 

[Virgil the Roman]

I'll have to re-read over it a bunch of times for it to sink in throughly, but overall I think you gave an excellent overview. Thanks HofB!
sincerely,
Ravenonthecross

 

[helenofbritain]

No worries, Raven. Let me know if I can clarify anything

 

[helenofbritain]

..... and bump!

(trying to inform the debate here, you know?)

 

[helenofbritain]

Bumping for geo (you others can read too )

 

[geocajun]

Thanks Hob. I have some reading to do

 

[helenofbritain]

No worries