Health care in Australia

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Adults employed in the health care and social assistance industry as a percentage of the adult population in Australia in the 2011 census, divided geographically by statistical local area Australian Census 2011 demographic map - Australia by SLA - BCP field 7284 Persons Health care and social assistance Total.svg
Adults employed in the health care and social assistance industry as a percentage of the adult population in Australia in the 2011 census, divided geographically by statistical local area
medical and other health care services
Total employment (thousands of people) since 1984

Health care in Australia is delivered, operated and funded by the Australian Government and state and territory governments, as well as by the private sector and not-for-profit organisations. Governments fund the majority of spending (67%) through Medicare and other programs. [1] Individuals contribute more than half of the non-government funding. [1]


Medicare is available to all Australian citizens and permanent residents. Other programs are also available for specific populations such as veterans or Indigenous Australians, and various compulsory insurance schemes cover personal injury resulting from workplace or vehicle incidents. The current Medicare levy, paid by Australians who earn over a certain income, is 2%. Those who earn more pay an additional surcharge if they do not have private health insurance (Medicare Levy Surcharge).

Medicare is the publicly funded universal health care system in Australia. Operated by the Department of Human Services, Medicare is the primary funder of health care in Australia, funding primary health care for Australian citizens and permanent residents including Norfolk Island. Residents are entitled to a rebate for treatment from medical practitioners, eligible midwives, nurse practitioners and allied health professionals who have been issued a Medicare provider number, and can also obtain free treatment in public hospitals. The plan was introduced in 1975 by the Whitlam Government as Medibank, and was limited to paying customers only in 1976 by the Fraser Government. The Hawke Government reintroduced universal health care in 1984 as Medicare.

Medical costs of visitors to Australia may be covered by travel insurance or under a reciprocal health agreement. People who are not covered by the Medicare scheme or wish to be covered for out-of-pocket medical or hospital costs can take out voluntary private health insurance, which is also subsidised by the federal government. In addition to Medicare, there is a separate Pharmaceutical Benefits Scheme funded by the federal government, which considerably subsidises a range of prescription medications.

The Pharmaceutical Benefits Scheme (PBS) is a program of the Australian Government that provides subsidised prescription drugs to residents of Australia, as well as certain foreign visitors covered by a Reciprocal Health Care Agreement. The PBS seeks to ensure that Australian residents have affordable and reliable access to a wide range of necessary medicines. The PBS has faced increased scrutiny as its cost has increased. The scheme assumes responsibility for the cost of drugs to patients in the community setting rather than while in hospital which is the responsibility of each state and territory. Together with Medicare the PBS is a key component of health care in Australia.

Medicare is financed by a Medicare levy, which is compulsory for most citizens and administered through the tax system. The federal Minister for Health, currently Greg Hunt, administers national health policy, and state and territory governments administer elements of health care within their jurisdictions, such as the operation of hospitals. The funding model for health care in Australia has seen political polarisation, with governments being crucial in shaping national health care policy. [2] Residents with certain medical conditions, foreign residents, some low-income earners, and those not eligible for Medicare benefits may apply for an exemption from paying the 2% levy, and some low-income earners can apply for reductions. [3] [4]

Minister for Health (Australia) portfolio in the Government of Australia

The Australian Minister for Health is responsible for national health and wellbeing and medical research. The Hon Greg Hunt has served as Minister for Health since 2017, and briefly left office in 2018 following criticism of the leadership of Malcolm Turnbull.

Greg Hunt Australian politician

Gregory Andrew Hunt is an Australian politician serving as Health Minister in the Morrison Government. He has been a Liberal Member of the House of Representatives since November 2001, representing the Division of Flinders in Victoria.

States and territories of Australia first-level subdivision of Australia

Government in the Commonwealth of Australia is exercised on three levels: federal, states and territories, and local government.


Healthcare cost comparison between Australia and other developed nations Australia Healthcare Cost Comparison.PNG
Healthcare cost comparison between Australia and other developed nations

In 2005/2006 Australia had (on average) 1 doctor per 322 people and 1 hospital bed per 244 people. [5] At the 2011 Australian Census 70,200 medical practitioners (including doctors and specialist medical practitioners) and 257,200 nurses were recorded as currently working. [6] In 2012, the Australian Institute of Health and Welfare recorded data showing a rate of 374 medical practitioners per 100,000 population. The same study reported a rate of 1,124 nurses and midwives per 100,000 population. [7]

Along with many countries around the world, there is a shortage of health professionals in Australia despite growth in the health workforce in previous years. From the years 2006-2011 the health workforce employment rate increased by 22.1%, which is reflected in the increase from 956,150 to 1,167,633. [7]

In a sample of 13 developed countries, Australia was eighth in its population weighted usage of medication in 14 classes in 2009 and also in 2013. The drugs studied were selected on the basis that the conditions treated had high incidence, prevalence and/or mortality, caused significant long-term morbidity and incurred high levels of expenditure and significant developments in prevention or treatment had been made in the last 10 years. The study noted considerable difficulties in cross-border comparison of medication use. [8]

Australia's health-expenditure–to–GDP ratio (~9.5%) in 2011–12 was slightly above average compared with other OECD countries. [9]


Medicare brand.svg
% of GDPCost
($ billions)
Source: Australian Institute of Health and Welfare [10]

Australia's universal health care system is primarily funded by Medicare, a program of the Department of Human Services. Medicare is funded partly by a 2% Medicare levy [11] (with exceptions for low-income earners), with any shortfall being met by the government from general revenue.

The amount paid by Medicare includes:

  1. patient health costs based on the Medicare Benefits Schedule. [12] Typically, Medicare covers 100% of the schedule fee general practitioner, 85% of specialist and other services and if you are private patient in a public or private hospital Medicare will cover 75% schedule fee if you are public patient in a private hospital. Both private and public patients treated in a public hospital will not incur out of pocket costs, however if private patients are treated in a public hospital, Medicare will cover 75% of the schedule fee for services performed. In the private system, Medicare will still cover 75% of the schedule fee for services performed but as many medical professionals charge more than the Medicare fee schedules patients may incur out of pocket costs exceeding what is stipulated by the Medicare Benefits Schedule. [13]
  2. patients may be entitled to other concessions or benefits [14]
  3. patients may be entitled to further benefits once they have crossed a so-called safety net threshold, based on total health expenditure for the year. [14]

Government expenditure on health care is about 67% of the total, below the OECD average of 72%. [15]

The remainder of health costs (called out-of-pocket costs or the copayment) are paid by the patient, unless the provider of the service chooses to use bulk billing, charging only the scheduled fee, leaving the patient with no out of pocket costs. Where a particular service is not covered, such as dentistry, optometry, and ambulance transport (excluding Queensland and Tasmania, where state government covers ambulance transport), [16] patients must pay the full amount, unless they hold a Health Care card, which may entitle them to subsidised access. Services not covered by Medicare may be covered, in whole or in part, by health insurance.

Health insurance

An additional levy of up to 1.5% is imposed on high-income earners without health insurance. Individuals can take out health insurance to cover out-of-pocket costs, with either a plan that covers just selected services, to a full coverage plan. In practice, a person with health insurance may still be left with out-of-pocket payments, as services in private hospitals often cost more than the insurance payment.

The government encourages individuals with income above a set level to privately insure. This is done by charging these (higher income) individuals a surcharge of 1% to 1.5% of income if they do not take out health insurance, and a means-tested rebate. This is to encourage individuals who are perceived as able to afford private insurance not to resort to the public health system, [17] even though people with valid private health insurance may still elect to use the public system if they wish.

Funding of the health system in Australia is a combination of government funding and private health insurance. Government funding is through the Medicare scheme, which subsidizes out-of-hospital medical treatment and funds free universal access to hospital treatment. Medicare is funded by a 2% tax levy on taxpayers with incomes above a threshold amount, with an extra 1% levy on high-income earners without private health insurance, and the balance being provided by the government from general revenue. [18]

Health insurance funds private health and is provided by a number of health insurance organizations, called health funds. The largest health fund with a 30% market share is Medibank. Medibank was set up to provide competition to private "for-profit" health funds. Although government-owned, the fund has operated as a government business enterprise since 2009, operating as a fully commercialized business paying tax and dividends under the same regulatory regime as do all other registered private health funds. Highly regulated regarding the premiums it can set, the fund was designed to put pressure on other health funds to keep premiums at a reasonable level. [19] [20]

The Coalition Howard Government had announced that Medibank would be sold in a public float if it won the 2007 election, [21] however they were defeated by the Australian Labor Party under Kevin Rudd which had already pledged that it would remain in government ownership. The Coalition under Tony Abbott made the same pledge to privatize Medibank if it won the 2010 election but was again defeated by Labor. Privatisation was again a Coalition policy for the 2013 election, which the Coalition won. However, the public perception that privatization would lead to reduced services and increased costs makes privatizing Medibank a "political hard sell." [20]

Australian health funds can be either 'for profit' including Bupa and nib; 'mutual' including Australian Unity; or 'non-profit' including GMHBA, HCF Health Insurance and CBHS Health Fund. Some have membership restricted to particular groups, some focus on specific regions – like HBF which centres on Western Australia, but the majority have open membership as set out in the PHIAC annual report. [22] Membership to most of these funds is also accessible using a comparison websites or the decision assistance sites. These sites operate on a commission-basis agreement with their participating health funds and allow consumers to compare policies before joining online.

Most aspects of health insurance in Australia are regulated by the Private Health Insurance Act 2007. Complaints and reporting of the health industry is carried out by an independent government agency, the Private Health Insurance Ombudsman. [23] The ombudsman publishes an annual report that outlines the number and nature of complaints per health fund compared to their market share. [24]

The private health system in Australia operates on a "community rating" basis, whereby premiums do not vary solely because of a person's previous medical history, current state of health, or (generally speaking) their age (but see Lifetime Health Cover below). [25] Balancing this are waiting periods, in particular for pre-existing conditions (usually referred to within the industry as PEA, which stands for "pre-existing ailment"). Funds are entitled to impose a waiting period of up to 12 months on benefits for any medical condition the signs and symptoms of which existed during the six months ending on the day the person first took out insurance. They are also entitled to impose a 12-month waiting period for benefits for treatment relating to an obstetric condition, and a 2-month waiting period for all other benefits when a person first takes out private insurance. [25]

Funds have the discretion to reduce or remove such waiting periods in individual cases. They are also free not to impose them, to begin with, but this would place such a fund at risk of "adverse selection", attracting a disproportionate number of members from other funds, or from the pool of intending members who might otherwise have joined other funds. It would also attract people with existing medical conditions, who might not otherwise have taken out insurance at all because of the denial of benefits for 12 months due to the PEA Rule. The benefits paid out for these conditions would create pressure on premiums for all the fund's members, causing some to drop their membership, which would lead to further rises, and a vicious cycle would ensue.

There are a number of other matters about which funds are not permitted to discriminate between members in terms of premiums, benefits or membership – these include racial origin, religion, sex, sexual orientation, nature of employment, and leisure activities. Premiums for a fund's product that is sold in more than one state can vary from state to state, but not within the same state.

The Australian government has introduced a number of incentives to encourage adults to take out private hospital insurance. These include:

Programs and bodies

Federal initiatives

Diphtheria immunization in Brisbane, 1940 StateLibQld 2 161967 Young girl being vaccinated at Brisbane, 1940.jpg
Diphtheria immunization in Brisbane, 1940

Medicare Australia is responsible for administering Medicare, which provides subsidies for health services. It is primarily concerned with the payment of doctors and nursing staff, and the financing of state-run hospitals.

The Pharmaceutical Benefits Scheme provides subsidized medications to patients. The level of subsidy depends on the above-noted tests. Low-income earners may receive a card that entitles the holder to cheaper medicines under the PBS. A National Immunisation Program Schedule that provides many immunizations free of charge by the federal government, the Australian Organ Donor Register, a national register which registers those who elect to be organ donors. Registration is voluntary in Australia and is commonly recorded on a driver's license or proof of age card are also managed by the federal government.

The Therapeutic Goods Administration is the regulatory body for medicines and medical devices in Australia. At the borders, the Australian Quarantine and Inspection Service is responsible for maintaining a favorable health status by minimising risk from goods and people entering the country.

The Australian Institute of Health and Welfare (AIHW) is Australia's national agency for health and welfare statistics and information. Its biennial publication Australia's Health is a key national information resource in the area of health care. The Institute publishes over 140 reports each year on various aspects of Australia's health and welfare. The Food Standards Australia New Zealand and Australian Radiation Protection and Nuclear Safety Agency also play a role in protecting and improving the health of Australians. [28]

State programmes

The Alfred Hospital, Melbourne The Alfred Hospital Melbourne 1.JPG
The Alfred Hospital, Melbourne

Public hospitals

Each state is responsible for the operation of public hospitals.

Healthcare initiatives

State based projects are regularly set up to target specific problems such as breast cancer screening programs, indigenous youth health programs or school dental health.

Ambulance services

Queensland and Tasmanian state governments cover the cost of ambulance transport, including emergency ambulance services. Citizens of these states may, in some circumstances, pass the cost of ambulance services they receive in another state to their home state government, often through reciprocal health agreements. Outside of Queensland and Tasmania, the cost of ambulance services varies state-by-state, but is either a call out fee + cost/km or membership to that state's ambulance provider (Ambulance Victoria, etc). [29]

Non-government organisations

The Australian Red Cross Blood Service collects blood donations and provides them to Australian Healthcare Providers. Other health services such as medical imaging (MRI and so on) are often provided by private corporations, but patients can still claim from the government if they are covered by the Medicare Benefits Schedule. The National Health and Medical Research Council (NHMRC) funds competitive health and medical research, and develops statements on policy issues. [28]


The Royal Adelaide Hospital. NRAH latest.jpg
The Royal Adelaide Hospital.


In a report published by HealthWorkforce Australia in March 2012, a shortage of nearly 3,000 doctors, over 100,000 nurses and more than 80,000 registered nurses was predicted in the year 2025. In the conclusion of the report, the HWA explains: "For nurses, given the size of the projected workforce shortages presented in this report, HWA will conduct an economic analysis to quantify the cost to allow an assessment of the relative affordability of the modelled scenarios to close the projected gap." Governments, Higher Education and Training, Professions and Employers are also identified as key players in the process of addressing future challenges. [30]

Quality of care

In an international comparative study of the health care systems in six countries (Australia, Canada, Germany, New Zealand, the United Kingdom and the United States), found that "Australia ranks highest on healthy lives, scoring first or second on all of the indicators", although its overall ranking in the study was below the UK and Germany systems, tied with New Zealand's and above those of Canada and far above the U.S. [31] [32]

A global study of end of life care, conducted by the Economist Intelligence Unit, part of the group which publishes The Economist magazine, published the compared end of life care, gave the highest ratings to Australia and the UK out of the 40 countries studied, the two country's systems receiving a rating of 7.9 out of 10 in an analysis of access to services, quality of care and public awareness. [33]

Aging population

Australia's life expectancy is approximately 83 years, however 10 of these years are expected to include an increase in disability from a chronic disease. The increase in chronic diseases are a contributor of higher healthcare costs overall. [34] Additionally the older generation shows an increased need for health services, and utilizes services frequently. From the years 1973 to 2013 the total number of people 65 or older tripled, increasing from 1.1 million to 3.3. As for the population of 85 and older there was an increase from 73,100 to 439,600. In order for the Australian health care system to handle the gradual population aging, government and administration must develop new policies and programs to accommodate the needs of changing demographics. [7]

Rural and remote health care

Health care services, their availability and the health outcomes of those who live in rural and remote parts of Australia can differ greatly from metropolitan areas. In recent reports, the Australian Institute of Health and Welfare noted that "compared with those in Major Cities, people in regional and remote areas were less likely to report very good or excellent health", with life expectancy decreasing with increasing remoteness: "[c]ompared with Major Cities, the life expectancy in regional areas is 1–2 years lower and in remote areas is up to 7 years lower." It was also noted that Aboriginal Australian and Torres Strait Islander peoples experienced worse health than non-Indigenous Australians.

Electronic health records

The Australian Government has a policy to development a lifetime electronic health record for all its citizens. PCEHR—the Personally Controlled Electronic Health Record—is the major national EHR initiative in Australia, being delivered through territory, state, and federal governments. This electronic health record was initially deployed in July 2012, and is under active development and extension by the Australian Digital Health Agency. [35] It is now called "My Health Record".

MediConnect is an earlier program that provides an electronic medication record to keep track of patient prescriptions and provide stakeholders with drug alerts to avoid errors in prescribing. [36]

The Australian standards organisation, Standards Australia, and the Commonwealth Department of Health have created an electronic health website, "e-health" [37] relating to information not only about Australia and what is currently going on about EHRs but also globally. There is a large number of key stakeholders that contribute to the process of integrating EHRs within Australia, they range from each States Departments of Health to Universities around Australia and National E-Health Transition Authority to name a few. The name of PCEHR has changed to My Health Record since 2015 with opt-out model. Australian government budgeted around $485million for this system which potentially could save nearly 5,000 lives per year when functional state. [38] [39] [40] [41]

Security and privacy concerns have been raised. Originally, participation of the system was to opt-in by each person giving consent, however due to low participation rates, participation without consent become the default option and each person must opt-out to be excluded from the system. [42] Each person had three months, or until October 2018 to opt-out. After October 2018, however, any user can delete their My Health Record, [43] as well as restrict access to providers. [44] In a life-threatening emergency, certain providers (like hospital emergency departments) can access a patient's My Health Record without being given explicit access. [44] There are 13,000 health providers involved, from specialists and general practice doctors to pharmacies and hospitals.


Government subsidies have not kept up with increasing fees charged by medical professionals or the increasing cost of medicines. [13] Data from the Australian Institute of Health and Welfare shows that out-of-pocket payments increased four-and-a-half times faster than government funding in 2014–15. [45] This has led to large numbers of patients skipping treatment or medicine. [46] Australian out of pocket health expenses are the third highest in the developed world. [45]


Peak bodies

See also


Related Research Articles

The Emergency Medical Treatment and Active Labor Act (EMTALA) is an act of the United States Congress, passed in 1986 as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA). It requires hospital Emergency Departments that accept payments from Medicare to provide an appropriate medical screening examination (MSE) to anyone seeking treatment for a medical condition, regardless of citizenship, legal status, or ability to pay. Participating hospitals may not transfer or discharge patients needing emergency treatment except with the informed consent or stabilization of the patient or when their condition requires transfer to a hospital better equipped to administer the treatment.

Medicare (United States) United States single-payer national social insurance program

Medicare is a national health insurance program in the United States, begun in 1966 under the Social Security Administration (SSA) and now administered by the Centers for Medicare and Medicaid Services (CMS). It provides health insurance for Americans aged 65 and older, younger people with some disability status as determined by the Social Security Administration, as well as people with end stage renal disease and amyotrophic lateral sclerosis.

Health insurance is an insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over a large number of persons. By estimating the overall risk of health care and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity.

Universal health care Health care system

Universal healthcare is a health care system that provides health care and financial protection to all residents of a particular country or region. It is organized around providing a specified package of benefits to all members of a society with the end goal of providing financial risk protection, improved access to health services, and improved health outcomes.

Two-tier healthcare

Two-tier healthcare is a situation in which a basic government-provided healthcare system provides basic care, and a secondary tier of care exists for those who can pay for additional, better quality or faster access. Most countries have both publicly and privately funded healthcare, but the degree to which it creates a quality differential depends on the way the two systems are managed, funded, and regulated.

Single-payer healthcare is a type of universal healthcare financed by taxes that covers the costs of essential healthcare for all residents, with costs covered by a single public system.

National health insurance (NHI) – sometimes called statutory health insurance (SHI) – is a system of health insurance that insures a national population against the costs of health care. It may be administered by the public sector, the private sector, or a combination of both. Funding mechanisms vary with the particular program and country. National or Statutory health insurance does not equate to government-run or government-financed health care, but is usually established by national legislation. In some countries, such as Australia's Medicare system, the UK's National Health Service, and the South Korea’s National Health Insurance Corporation contributions to the system are made via general taxation and therefore are not optional even though use of the health system it finances is. In practice, most people paying for NHI will join it. Where the NHI involves a choice of multiple insurance funds, the rates of contributions may vary and the person has to choose which insurance fund to belong to.

Health care prices in the United States describes market and non-market factors that determine pricing, along with possible causes as to why prices are higher than other countries. Compared to other OECD countries, U.S. healthcare costs are one-third higher or more relative to the size of the economy (GDP). According to the CDC, during 2015 health expenditures per-person were nearly $10,000 on average, with total expenditures of $3.2 trillion or 17.8% GDP. Proximate reasons for the differences with other countries include: higher prices for the same services and greater use of healthcare. Higher administrative costs, higher per-capita income, and less government intervention to drive down prices are deeper causes. While the annual inflation rate in healthcare costs has declined in recent decades; it still remains above the rate of economic growth, resulting in a steady increase in healthcare expenditures relative to GDP from 6% in 1970 to nearly 18% in 2015.

A public hospital or government hospital is a hospital which is owned by a government and receives government funding. In some countries, this type of hospital provides medical care free of charge, the cost of which is covered by government reimbursement.

Medibank Private Limited is a national private health insurer based in Australia. It is Australia's second largest health insurance provider behind Bupa with 3.8 million members, 29.1% of the market, under two brands. Previously an Australian government business enterprise, it was privatised in 2014 by the Abbott Government and now operates as a publicly listed company on the ASX.

United States National Health Care Act Proposed U.S. law

The United States National Health Care Act or Expanded and Improved Medicare for All Act is a bill first introduced in the United States House of Representatives by former Representative John Conyers (D-MI) in 2003, with 25 cosponsors. As of October 1, 2017, it had 120 cosponsors, a majority of the Democratic caucus in the House of Representatives, and the highest level of support the bill has received since Conyers began annually introducing the bill in 2003.

Health insurance in the United States is any program that helps pay for medical expenses, whether through privately purchased insurance, social insurance, or a social welfare program funded by the government. Synonyms for this usage include "health coverage", "health care coverage", and "health benefits". In a more technical sense, the term "health insurance" is used to describe any form of insurance providing protection against the costs of medical services. This usage includes private insurance and social insurance programs such as Medicare, which pools resources and spreads the financial risk associated with major medical expenses across the entire population to protect everyone, as well as social welfare programs like Medicaid and the Children's Health Insurance Program, which both provide assistance to people who cannot afford health coverage.

Healthcare in Singapore

Healthcare in Singapore is supervised by the Ministry of Health of the Singapore Government. It largely consists of a government-run universal healthcare system with a significant private healthcare sector. In addition, financing of healthcare costs is done through a mixture of direct government subsidies, compulsory savings, national healthcare insurance, and cost sharing.

Healthcare reform in the United States has a long history. Reforms have often been proposed but have rarely been accomplished. In 2010, landmark reform was passed through two federal statutes enacted in 2010: the Patient Protection and Affordable Care Act (PPACA), signed March 23, 2010, and the Health Care and Education Reconciliation Act of 2010, which amended the PPACA and became law on March 30, 2010.

Healthcare in Germany

Germany has a universal multi-payer health care system paid for by a combination of statutory health insurance and "Private Krankenversicherung".

The French health care system is one of universal health care largely financed by government national health insurance. In its 2000 assessment of world health care systems, the World Health Organization found that France provided the "close to best overall health care" in the world. In 2011, France spent 11.6% of GDP on health care, or US$4,086 per capita, a figure much higher than the average spent by countries in Europe but less than in the US. Approximately 77% of health expenditures are covered by government funded agencies.

The healthcare reform debate in the United States has been a political issue focusing upon increasing medical coverage, decreasing costs, insurance reform, and the philosophy of its provision, funding, and government involvement.

Health care finance in the United States discusses how Americans obtain and pay for their healthcare, and why U.S. healthcare costs are the highest in the world based on various measures.


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