Medicare at 30

Image: Department of Human Services

Medicare, Australia's universal health insurance scheme marks its 30th anniversary on 1 February 2014. For 30 years Australians have had free public hospital treatment and subsidised medical services; free if the doctor bulk bills. Medicare is part-funded by a 1.5% levy on income tax (which meets around half its cost) and general taxation. In 2012–13, spending on Medicare totalled $18.5 billion. This makes Medicare the third most expensive government program after the Age Pension and family payments.

Health spending: patients bearing higher costs



Recent reports have highlighted the growing cost of health services and the increasing financial burden on individuals. According to data from the Australian Institute of Health and Welfare (AIHW) Australia spent more than $130 billion on health in 2010–11, or around 9.3% of Gross Domestic Product (GDP). Around 70% of this was spending by Government—the Commonwealth and the states and territories combined, through programs such as Medicare, public hospital services and the Pharmaceutical Benefits Scheme (PBS). But a significant and growing component of health expenditure comes from individuals.

The missing billion? Revisions to health funding not unprecedented

Part of Australian health policy folklore is the claims and counter claims about health financing that endure between State and Commonwealth governments as well as between Government and Opposition. Perhaps the most famous example was the claim in 2003-04 by the then Opposition that Tony Abbott ‘ripped one billion from public hospitals’, which still persists today.

Is $325 million enough for Tasmania's health care system?



Image source: www.yourhealth.gov.au

 Last week, after much speculation, the Federal Government announced that it would provide an extra $325 million over four years to Tasmania’s health care system. Previously the Tasmanian Government had announced cuts of up to $500 million over four years to the health care system, commencing from 1 July 2011. Many of these cuts were directed to elective surgery, reduced services and the closure of hospital beds. The most recent Tasmanian budget (May 2012) announced a reduction of the savings target by $120 million.

Reducing elective surgery waiting times - is more money the answer?

Image source: State of our public hospitals 2009

Performance of public hospitals is rarely out of the news. Attention is often focussed on elective surgery waiting times or episodes of poor care. Recently there have been reports of ward closures in Victoria and the Tasmanian government has announced cuts to elective surgery in an attempt to balance the budget. Likewise, funding arrangements for hospitals are guaranteed to generate community debate, with more, not less, funding often proposed as the answer.

The most recent COAG Reform Council Progress Report presents a sobering, if not contradictory, view of public hospitals in Australia. This report is a high level examination of implementation of the Government’s reform agenda across a range of measures through COAG and National Partnerships Agreements. For hospitals, the report considered changes to hospital funding arrangements including the implementation of the activity based funding arrangements (ABF) and elective surgery waiting times. It also reflects on whether key reform indicators are being met and if progress is being made on key performance indicators.

What can be done about the growing cost of health care in Australia?

Source: Courier Mail

 The sustainability of Australia’s health system is becoming a key concern for Australian governments, along with those in many other advanced economies. But, with growing demand for high quality health care, an ageing population and rapid advances in medical technology, what can be done to keep a lid on health expenditure? This recently published Parliamentary Library Research Paper outlines the key mechanisms the Australian government has to control health care spending, and it proposes some potential options for reform.

 

In a recent speech on the sustainability of the health system, the Finance Minister, Penny Wong, highlighted the problem policymakers now face: health care expenditure is projected to continue to rise, but the pool of taxpayers is shrinking. According to The Treasury’s 2010 Intergenerational Report, health care will consume about two thirds of the projected increase in government spending over the next 40 years if current trends continue. Clearly, this is not going to happen because changes will be made. But what changes?

Health Insurance in Australia: time for a new debate?



Image: Department of Health, Victoria

 In July 2011 the Government re-introduced its Fairer Private Health Insurance Incentives legislation into the House of Representatives; for an overview of the history of this legislation, see here. The Bills have not yet been debated. The key changes proposed by this legislation are: a means-test on tax-funded rebates for private health insurance (PHI) for those on incomes above a specified threshold, and; a higher Medicare Levy Surcharge for people on high incomes who choose not to purchase PHI.

If passed, the legislation will mean that higher income earners will receive a lower or no tax-funded subsidy when they purchase PHI, and, if they choose not to purchase PHI, they will face higher tax penalties.

National Health Reform Agreement: what might it achieve?

Image Source: Access to Justice

After nearly four years in government, an 18 month independent inquiry into the health system, a Prime Ministerial listening tour of the nation’s hospitals, several fraught Council of Australian Governments (COAG) meetings and one unsuccessful attempt, the federal Labor Government has finally secured a health reform deal with all states and territories.

The National Health Reform Agreement announced this week is essentially a detailed implementation plan for the Heads of Agreement on National Health Reform, which was negotiated at COAG in February 2011. Most commentators agree that the scope of reform has been scaled back over time. The reforms outlined in this Agreement and the earlier Heads of Agreement are less extensive than those outlined in the April 2010 National Health and Hospitals Network (NHHN) Agreement (for a summary of the changes made to the NHHN Agreement see here). The contentious proposal to hold back GST from the states in order to fund reforms has disappeared (this was the main reason Western Australia refused to sign up before). Other discarded reforms include plans for a Commonwealth ‘take over’ of primary health care and to become the majority funder of public hospitals.

The Health Budget - a summary of pre-budget speculation and advocacy

On Budget eve, the Government has already made several announcements about the contents of the 2011-12 health Budget. There have been some announcements regarding capital expenditures. These include $220 million to Tamworth Hospital, redevelopments to Mt Gambier and Port Lincoln Hospitals, regional cancer centres for Albury/Wodonga and Geelong, $57 million for regional Western Australia and a Youth Health Hub for Colac.

It has also said that a comprehensive dental plan will not be funded this year, although a 'down-payment' will be made. It should be noted that all of the health infrastructure projects that have so far been announced are the result of successful applications to the regional priority round of the Health and Hospitals Fund which was allocated five billion dollars in the 2008-09 Budget.

Paying for health care: how can we sustain it?

At budget time, the federal health minister has one of the toughest jobs. We got a glimpse into this a few weeks ago when the Government announced that it had decided to defer listing some new drugs on the Pharmaceutical Benefits Scheme even though they work and have been deemed by experts to be cost-effective. The announcement sparked outcry from consumer groups and health care organisations alike.

Making savings from the PBS - is deferring the listing of medicines the answer?

In a recent speech, Prime Minister Gillard warned that there would be ‘painful’ cutbacks in the forthcoming Budget. There was no indication of where these cuts might be but it appears that the Government has already made decisions that will slow government expenditure in some programs. Recently, the Government has deferred the listing of products on the Pharmaceutical Benefits Scheme (PBS) until ‘circumstance permit’ and imposed a requirement that all pharmaceuticals that receive a positive recommendation from the Pharmaceutical Benefits Advisory Committee(PBAC) must be considered by Cabinet prior to listing on the PBS. This post explains the recent changes to the process for listing medicines on the PBS and discusses some of the implications of the Government’s decision to defer listing of some medications on the PBS.