31 August 2018
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Biggs & Lauren Cook
Social Policy Section
Australia’s health outcomes are among the
best in the world. At the same time, as Australia’s
Health 2018 notes, Australia’s health system is a complex network of
services and settings, involving a mix of health professionals, service
providers, funders and regulators.
This updated guide provides an overview of Australia’s
complex health system: what governments do, the role of private health insurance, how much we spend on health care, how Australian health outcomes
compare internationally, the health care workforce and links to further information and resources.
Australian health system
The Australian health system involves multiple layers of
responsibility and funding provided by governments, individuals and private
(the first level of contact with the health system) is mostly provided in the
community by general practitioners (GPs) who are generally self-employed. GPs
also operate as ‘gatekeepers’, referring patients to specialist medical
services where needed. The national public health insurance scheme Medicare
provides subsidies for most medical and diagnostic and some allied health
Acute care is
provided in either public or private hospitals. Public
hospital treatment is free for public
patients, but can be subject to long waiting times for elective surgery. Private
hospitals cater to patients who want choice of doctor and private ward
accommodation. Additionally, they include a growing number of ‘day-only’
specialist facilities. For private hospital care Medicare
pays 75 per cent of the Medicare schedule fee, with the balance met by private
health insurance (if the individual is covered, and depending on gap cover arrangements).
A range of free or low-cost public health services,
including immunisation and mental health services, are provided by community
health facilities. Subsidised aged care services, such as residential aged
care, are provided by a mix of not-for-profit, for-profit and government
organisations. Prescription medicines are dispensed by private community
pharmacists who are paid by the Australian government (under a Pharmacy
Agreement) to dispense medicines subsidised under the Pharmaceutical
Benefits Scheme (PBS).
level of government does what?
Responsibility for funding and regulating the health
system is largely shared between the Australian, state and territory
governments. However, their respective roles are not always clear.
Broadly, the Australian Government has responsibility for:
the national scheme which provides free or subsidised access to clinically
relevant medical, diagnostic and allied health services as specified in the Medicare Benefits Schedule (MBS). Medicare is funded through a 2.0 per cent Medicare levy on taxpayers and
general taxation revenue. High out-of-pocket costs are partially offset by the Medicare Safety Net and the Extended Medicare Safety Net
- the Pharmaceutical
Benefits Scheme (PBS) which
subsidises universal access to thousands of prescription medicines. Patients
pay a small co-payment. The PBS Safety Net helps offset high out-of-pocket costs
- funding of vaccines for
the National Immunisation Program
- subsidies for aged care
services, such as home and residential care, and regulation of
the aged care sector
- medical research grants, largely
through the National Health and Medical Research Council and the Medical Research Future Fund
for private health insurance premiums and regulation of private health insurers
- capped dental benefits for basic dental services for children and teens
- veterans’ health care through the
of Veterans’ Affairs
- funding for community-controlled
Aboriginal and Torres Strait Islander primary healthcare organisations through
the Indigenous Australians’ Health Program
- education of health professionals
(through Australian government funded university places)
- visas for
overseas trained doctors and other health professionals
primary care quality and access
through Primary Health Networks (PHNs)
- regulation of therapeutic goods
and medical devices through the Therapeutic Goods Administration
- subsidised accessed to expensive
life saving drugs for very rare life-threatening conditions, through the Life
Saving Drugs Program (LSDP)
- the National
Diabetes Services Scheme, which
assists people with diabetes to understand and self-manage their condition and
subsidises the cost of diabetes-related products
- the Continence Aids Payment Scheme, which helps cover the cost of products to manage
- My Health Record, a digital
health record for patients containing a summary of all their health information
- subsidised hearing services and
- national coordination and
leadership; for example, responding to pandemics and other health emergencies.
State and territory governments are mainly responsible for:
- management and administration of
- delivery of preventive services
such as breast cancer screening and immunisation programs
- funding and management of community mental health services
- public dental clinics (Australian
government funding is provided under an agreement)
- ambulance and emergency services
- patient transport and subsidy schemes
- food safety and handling
- regulation, inspection, licensing
and monitoring of health premises.
The Australian, state and territory governments share
responsibilities across a number of areas. These shared arrangements are
usually detailed in national agreements, such as those agreed under the Council of Australian Governments (COAG),
In addition, local governments play an important role in the
health system by providing services such as environmental health services (for
example, sanitation) and a range of community-based health and home-care
These arrangements create scope for duplication and waste to
over funding levels and cost-shifting between different levels of government
also feature regularly.
about private health insurance?
Australia's health system is sometimes described as a
‘mixed system’ because private funding and services operate alongside the
public system. According to the Australian
Prudential Regulation Authority (APRA), 45.5 per cent of the
Australian population have private hospital cover, and 54.6 per cent have cover
for ancillary services (‘extras’), such as dentistry and optometry, as of March
Private health insurance provides cover for private
hospital services and many out-of-hospital health services not covered by
Medicare, such as dentistry. Consumers with private cover can avoid potentially
long waiting lists in the public system and choose their own doctor.
The Australian Government provides a means-tested rebate
for the cost of private health insurance premiums. Higher income earners are
penalised with an additional Medicare
levy surcharge if they do not have private hospital cover. Persons over 31
who delay taking out private health insurance are also subject to Lifetime
Health Cover (LHC). LHC is a two per cent annual loading that is charged in
addition to the base rate of private health insurance premiums, up to the
maximum loading of 70 per cent.
much does Australia spend on health?
Institute of Health and Welfare (AIHW) calculates that spending on all
health care in Australia in 2015–16 totalled $170.4 billion, or 10.3 per cent of
gross domestic product (GDP). This is around $6,671 in recurrent expenditure on
health per person (not including capital). Most health spending in Australia (67.3
per cent) is funded by governments, with the largest component ($46.9 billion)
for the provision of public hospital services. Australia’s expenditure on
health as a percentage of GDP is substantially lower than health care spending
in the United States (at 17.2 per cent of GDP),
but slightly higher than the Organisation
for Economic Co-Operation and Development (OECD) average.
Individuals contributed around $29.4 billion purchasing
health services, or 17.3 per cent of total health expenditure. In 2015–16, 68
per cent of this expenditure was on primary health care.
Private health insurers spent around $14.9 billion on health
services in 2015–16, or 8.8 per cent of total health expenditure. Of this
expenditure, 57 per cent ($8.5 billion) was spent on hospital services, with the
majority of spending occurring in private hospitals ($7.4 billion).
does Australia compare internationally?
Compared with other countries, Australia performs strongly
across a range of important health indicators.
Australia enjoys one of the highest life expectancies of
any country in the world. At 82.5 years in 2015, it ranked fifth among OECD
countries, according to the AIHW.
In 2014–15, over half (56.2 per cent) of Australians aged
15 years and over rated their health as excellent or very good; a further 28.9
per cent rated their health as good; while 14.8 per cent regarded their health as
fair or poor (Australian
Bureau of Statistics).
For a range of diseases, outcomes in Australia are as good
as, if not better than, many other developed countries. In 2012, Australia’s mortality-to-incidence
ratio for cancer (a measure of cancer survival) was 0.3, suggesting that
cancer survival in Australia was higher than the rest of the world.
Smoking rates are declining. Just 12.4 per cent of Australians
aged 15 and over reported smoking on a daily basis in 2016, among the lowest in the world.
Levels of childhood vaccination have remained high (95 per
cent for diphtheria, tetanus, pertussis and measles, according to the OECD),
and infant and maternal mortality rates are below the OECD
Despite these positive signs, it is not all good news.
Australia’s rates of overweight and obesity—risk factors for a number of
chronic diseases—are among the highest in the developed world. In 2014–15, 27.9 per cent
of Australian adults were classified as obese, less than the United States (38.2
per cent) and New Zealand (29.9 per cent), according to the OECD. A
per cent of Australian adults were reported as overweight.
Among OECD countries with public mammography programs, the
proportion of Australian women in the target range who were screened for breast
cancer in 2015 was 54.5 per cent, which was below the OECD average
of 60.8 per cent.
In terms of quality of hospital care, the post-operative
sepsis rate in Australia was 1,458 per 100,000 surgical hospitalisations in
2013–14. This is well above the OECD average of 967 in 2012–13.
Across a range of health
indicators, including life expectancy, incidence of chronic diseases, infant
health and smoking rates, the health of Indigenous Australians rates more
poorly than non-Indigenous Australians. Many lower income Australians also
experience poorer health compared to those on higher incomes.
delivers health care?
Australia's health workforce comprises a diverse range of
health care occupations working across a variety of settings, including medical
practitioners, nurses, midwives, dentists and allied health professionals.
Medical practitioners, more commonly known as doctors,
complete several years of undergraduate medical study, followed by compulsory
12 month internships in a hospital setting, before they can be registered as
medical practitioners. Many then spend several years training in a medical
speciality, such as gastroenterology, obstetrics, psychiatry or general
practice. As of March 2018, there were 114,675 registered
medical practitioners in Australia. Once registered, medical practitioners
work in a variety of clinical and non-clinical settings, including private
practice in the community, salaried positions in community health clinics,
visiting medical officers in hospitals, teaching and research. Overseas
trained doctors (or international medical graduates) perform an important
role working under supervision in designated areas of workforce shortage,
usually in rural and remote Australia.
Nurses and midwives deliver direct patient care in
hospitals, aged care facilities, community health centres and in home
environments. As of March 2018, there were 398,530
people registered as a nurse, midwife or both. Nurses are either classed as
registered nurses (Division 1) or enrolled nurses (Division 2). Registered nurses
usually must complete a three-year
tertiary degree, such as the Bachelor of Nursing, while enrolled nurses must
complete a vocational education training course, such as the Diploma of Nursing.
A midwife must either complete a three-year tertiary nursing degree and then
complete postgraduate studies in midwifery, or complete a three-year tertiary
There are a wide range of allied health workers
in Australia. As of March 2018, there were 182,572 allied health
professionals registered in Australia, as shown in the table below.
Table 1. Registered allied health
professionals in Australia, March 2018
Source: Registered allied
health professional board websites.
However, many other allied health
workers (such as social workers, exercise physiologists and massage therapists)
are not required to be registered to practice in Australia.
Since 2010, all health professions practicing under a protected title
have operated under the National Registration and Accreditation Scheme (NRAS),
which is administered by the Australian
Health Practitioner Regulation Agency (AHPRA). AHPRA supports the National Boards to
implement the NRAS.
Key sources of health data:
Locating health services:
Medical and health information:
Performance of the health system:
Parliamentary Library Quick Guides:
Reports from Parliamentary Committees, including the Senate Standing Committees on Community Affairs and the House of Representatives Standing Committee on
Health, Aged Care and Sport, are available through the Committees’ websites.
Further Parliamentary Library publications on health are available via ParlInfo.
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