An exploration of the Australian Healthcare system

Written by Shukti Sarma

In 2013, Bloomberg announced in a worldwide poll that Australia has the best healthcare system overall. Talking about the poll, Alison Verhoeven, Chief Executive, Australian Healthcare and Hospitals Association (AHHA), said, “Australia’s healthcare investment as a percentage of GDP sits at approximately 8.9% per capita. With life expectancy of 81.8 years, Australia is on a par with other high performing countries in this ranking, showing that our investment in a universal healthcare system is a winning model.”

No mean feat, that. But as we know, nothing is perfect. The report later also identified some major problems that Australia is facing regarding healthcare- an ageing population, increasing levels of chronic disease and escalating health care costs. However, one factor which is rarely discussed is the politics of healthcare.

Government representatives are saying that the healthcare system is going to get a complete overhaul. But what does that mean for the patients?

Penny wise and Australian dollar foolish?

In Australia, the federal government pays a large percentage of the cost of services in public hospitals. And this depends on whether the government chooses to subsidise the costs. The government subsidises treatment and insurance costs via the Medicare scheme. Now, with the economy still reeling from recession, healthcare costs have escalated, and with rising levels of chronic diseases in the country, the government is looking at cutting costs.

And cost cutting in healthcare or other such public services never go down well.

Take the latest controversy about medical payments, for example.  There is a proposal waiting for thr government according to which, the government will make a co-payment of $6 for each of the first 12 bulk billed visits to a GP each year. This is a highly problematic viewpoint, suggested by suggested by Terry Barnes, a former health adviser to Tony Abbott, in a submission to the high-powered National Commission of Audit. A report for the Australian Centre for Health Research think-tank says that if implemented, the scheme will save the Government $750 million over four years and act as a deterrent for those seeing doctors unnecessarily.

There is of course, the question of long term impact of diseases and follow up treatments- which are not ‘unnecessary’. Also, it comes across as a short term solution, and many health experts say that this could lead to a bigger fallout and land up the government with a huge bill over long term.

Polar opposites

The benefits of a universal healthcare system, sponsored by the state, are well known. But a fully state-sponsored system is entirely dependent on the government; and like every other thing, a government is subject to human faults and weaknesses.

In her 2006 book about the (lack of) healthcare in USA, “Solving the Health Care Problem. How Other Nations Succeeded and Why the United States Has Not”, author Pamela Behan documented the evolution of Australia’s healthcare system. Since the Second World War, the country has seen a cycle of building and dismantling the health insurance system. The author concludes that Australia’s healthcare system is made possible by the political polarization of the society, and the presence (and success) of the Australian Labour Party.

No wonder, healthcare promises play a big role in Australian politics and have a major influence on votes.  The Liberal Party has been widely criticized for its willingness to cut healthcare subsidies, and many studies show that there is a significant difference in health status between the aborigines and the non-aborigines. The Labour Party, on the other hand, is promising insurance for the disabled, dental healthcare coverage and mental health.

Needless to say, when two sharply contrasting ideologies fight and one inevitably emerges on top, the system is bound to undergo a change. And whichever way it may play out, a system lacking in consistency does not stand to benefit the patients.

Prescription for wellness

While costs will always remain a contentious issue, what the policymakers should take into account is Australia’s demographic shift. With an ageing population, there will be need for universal healthcare, but it also should be cost effective.

There is also the matter of private investors in healthcare. Public and private bodies endeavours must go hand in hand, and private funding/participation is a must if the government wants to cut some costs. However, this will require effective regulation and some minimum standards to be met for service providers.

Reforms are definitely needed, and the government should take a long term view of the situation. And the solution cannot be arrived at without taking the patients into account.