Australian healthcare system overview and structure

Australian Healthcare System

The following paper discusses the Australian healthcare system. It begins with the structure and overview of the system and then moves on to the governance of the system. After covering these aspects, the paper highlights the functions of the Australian healthcare system. In addition, the paper also discusses the historical background of the system. In the end, the paper discusses the current issues that are faced by the Australian healthcare system.

Australia is a huge country with an area of 7692000 square kilometers. This country has increasing population and other factors that present a challenge to its healthcare system. The Australian healthcare system is a tax-funded system that provides the Australian populace with healthcare facilities. The system has gone through many reforms and has certainly improved during the last two decades. (Hilless & Healy, 2001)

Overview and Structure

The Australian healthcare system, as mentioned earlier, is funded by the taxes. The government looks after, controls and funds the system. The government also subsidizes different medicines and other products related to the provision of the healthcare services. The federal government, states governments and territory governments interact together to form a strategy which ensures an equitable and efficient provision of healthcare services. In addition, these governments interact with the private stakeholders in a specific forum in order to generate more funds. (Hilless & Healy, 2001)

The structure of the Australian healthcare system is a little complex as it consists of many private investors. There are four management levels which interact together in order to achieve the goals set for the system. The government is the main governing body of the system and the flow of funds is controlled by it. The structure consists of four levels and each level has its own duties and functions. (Healy & Sharman et al., 2006)

The first and foremost level is the commonwealth or the federal government. This body funds all the smaller bodies in this system. The major function of the federal government is to control the flux of funds into and out of other smaller government controlled medical institutes. The federal government also administers the transfer of funds to private insurance fund. The federal level does not manage any healthcare bodies and its primary function is to manage the funds that are received by the government. (Eagar & Garrett et al., 2001)

In addition, the federal government provides the state and local government with the necessary funds. As the funds are the responsibility of the federal government, mostly they select the healthcare programs. In addition, the federal government also provides the required funds to other agencies that work under it. Some of these agencies are the Department of Health and Ageing and the Australian Institute of Health and Welfare. The federal government also sponsors medical research and training of medical personnel. (Eagar & Garrett et al., 2001)

The second level is the state government. The state government controls the funds and manages the government run bodies. The main duty of the state government is to ensure the provision of the health care services to the entire populace with equality. The state government controls the policies and funding of public hospitals and public health care services. In this way, it manages and administers the services that are currently being offered. In addition, the state government is also responsible for managing the flow of funds to the local government. The state government is also responsible for endorsing licenses to the medical institutes. Moreover, it also registers healthcare professionals into state owned medical institutions. (Eagar & Garrett et al., 2001)

The next level is the local government. The local government operates in a smaller area and therefore, it is the smallest state run body in the healthcare system of Australia. The local government operates in territories and administers the funds and policies of the local hospitals and other medical institutions. The local government also assists the state government in managing and funding different public health services offered. In addition to that, the local government also participates actively in the enforcement of standards and disease prevention. (Healy & Sharman et al., 2006)

Private sector is growing rapidly in Australia. The private sector provides and funds healthcare services to the people of Australia. In the year 2002-03 the private sector funded almost 34% of the total health expenditure including the private insurances. Private hospitals are key players in the healthcare systems as they provide 30% of the beds to the patients. In addition, a majority of the doctors is employed in private organizations and some of them have contracts with state run hospitals. Although private hospitals do not take emergency cases and are generally smaller in size as well, but the numbers are increasing because of large corporate parties funding in hospitals for profits. (Nicholson & Jackson et al., 2012)

The aforementioned bodies make up different levels in the structure of Australian healthcare system and interact together to ensure the provision of healthcare to the population of Australia.

Governance

As mentioned earlier, the Australian healthcare system consists of two parts, the private sector and the public sector. The private medical institutions are governed and controlled by the private organizations. The funds are also generated by the corporates owning these institutions but sometimes, the government also funds these institutions. In addition, these medical institutions also receive subsidies from the government so that they can provide the healthcare services at a lower cost. (Bennett, 2009)

Three branches of government control the public sector: the commonwealth, the state government and the local government. The funds are controlled by the federal government whereas the state government controls the management and the local government. The local government then controls the institutions and manages the provision of services to the people. (Bennett, 2009)

The benefit of this governance system is that the branches of government share the responsibilities and therefore, each branch fulfils its duty effectively as it is not over burdened by it. Therefore, the Australian governance system supports its healthcare system. (Bennett, 2009)

Function

The function of an effective healthcare system is to provide medical services to the people. The Australian healthcare system covers all the residents of Australia. The system also provides medical assistance to people on visas from courtiers that have an arrangement with the Australian government. In addition, the system also covers the asylum seekers and undocumented migrants with the latter getting help mostly from the NGO's. (Thomson & Osborn et al., 2012)

The healthcare system provides two types of incentives to the people. The first incentive is giving direct services to the people who need it in governmental hospitals and medical institutes. Medicare is the largest governmental body giving free or discounted access to all the medical services. In addition, the government has other medical bodies providing population, mental and dental healthcare services to the people. In addition, immunizations and vaccinations are also funded by the government. Moreover, the government has also introduced several therapies for the people as well. (Thomson & Osborn et al., 2012)

The second incentive is the reimbursement of medical expenses that an individual has incurred. Medicare reimburses 85% of the ambulatory care expenses. It also reimburses 75% to the patients who are admitted to the hospital. The doctors are recommended to bill Medicare for the amount of subsidy and therefore the patient is relieved a lot. In addition to that, the healthcare system has also set an annual limit and the patients increasing that limit get increased subsidy from the government. Moreover, the safety net mechanism provides extra concession to the patients who incur a high medical cost. The patients also receive incentives on the PBS medicines and therefore, the combined cost is reduced to a minimum. (Thomson & Osborn et al., 2012)

The Australian health care system combines the provision of service and the reimbursement of cost technique to accomplish its goal. The function of the system, as mentioned earlier, is to provide the patients with good healthcare at lower cost and the Australian system does fulfil its duty effectively.

Factors Influencing the Design of Australian Healthcare System

The design of a healthcare system is influenced by certain demographic, economic, and historic and disease-based factors. The Australian system began after the Second World War. The step was necessary to be taken as many states were affected by the war. Therefore, the commonwealth government started funding several healthcare endeavors. This has influenced the role of commonwealth in the current system as well where it controls the funds. (Healy & Sharman et al., 2006)

A national health act was passed in 1953 in which laid the basic design of the current Australian healthcare system. The Pharmaceutical Benefits Scheme was enacted which is still operational. In addition to that, the subsidized healthcare services, that are still offered, were also started following the act. The World War 2 has significantly affected the design of the Australian healthcare system. (Healy & Sharman et al., 2006)

The introduction of Medibank in 1975 is an important event that has altered the design of the Australian healthcare system significantly. Medibank was a fund through which, the patients could get 85% of their medical bills back. This service was made optional but then the labors government converted it into Medicare, which is still an important component of the Australian healthcare system. (Healy & Sharman et al., 2006)

In addition, the demographic factors also affect the design of the system. As the healthcare system covers all the citizens, the demographic factors have a significant influence on the system. The population of Australia is increasing significantly with the estimates of population increasing each year. Therefore, the system has to introduce extensive services and subsidies. In order to cope up with the increasing population, the healthcare system faces a need to expand itself. (Commonwealth of Australia-Department of Ageing, 2009)

Moreover, there would be a need for more hospitals, doctors and medical institutions. The system incorporates all these bodies and therefore it may have to amend its design in order to adjust the ever-increasing demand of healthcare. The federal, state and local government introduces new and improved policies in order to maintain equality in the system of provision of healthcare. (Commonwealth of Australia-Department of Ageing, 2009)

Apart from the demographic factors, the economic factors also play a vital role in determining the design of the healthcare system of Australia. As mentioned earlier, the healthcare system gives direct healthcare services and reimbursements. In order to determine the amount of services and reimbursements, the government has to keep in mind the economical factors. The amount of funds allocated to the healthcare system determines whether any new bodies are introduced into its design and whether the old ones are going to get more funds or not. (Commonwealth of Australia-Department of Ageing, 2009)

If the government allocates a greater amount of funds for the system, then some new bodies may be introduced and the previous ones might also get more funds as well. A strong economic condition means that the system will be able to provide more services to the people and will improve the quality of the current services as well. The design of Australian healthcare system shows that it has sufficient amount of funds which, it uses to develop and introduce services. (Commonwealth of Australia-Department of Ageing, 2009)

Apart from that, the performance and design of the healthcare system is also dependent on the burden and amount of diseases on the system. A healthy community reflects the good performance of the healthcare system but a community that does not fare well on health, also creates problems for the system. The design of the system may include more services if the diseases prevailing the community are lesser in number as the system will save more funds to spend on diversified services. (Commonwealth of Australia-Department of Ageing, 2009)

On the other hand, the disease burden is high, then the system will have to channel more funds into tacking those diseases and therefore it will not be able to provide a wide range of services. The Australian healthcare system provides a fair range of services which shows that the burden of disease on the system is low. This, however, is changing and the WHO indicates that the burden of chronic diseases is increasing worldwide and Australia will be affected by it. (Commonwealth of Australia-Department of Ageing, 2009)

The healthcare workforce of Australia also affects the design of Australian healthcare system. The availability of workers, nurses and doctors has a direct impact on the policies and the design of the system. As mentioned earlier, majority of doctors are engaged in providing private healthcare services and only some of them are indulged in public sector. This influences the design of the system as workers and staff are needed to start a new project or enact a new policy. (Commonwealth of Australia-Department of Ageing, 2009)

The healthcare workforce of Australia has increased since 1996 and therefore, the government can take on new projects and enact new designs as well. The current system also shows that the workforce has increased as the government now also offers new services such as dental care. (Commonwealth of Australia-Department of Ageing, 2009)

The aforementioned factors influence the design of the Australian healthcare system. The system itself works smoothly but there are a few discrepancies that are discussed later in the paper.

Current Issues Faced by the System

The Australian healthcare system is faced with many issues that should be tackled in order to ensure the smooth working of the system. The first issue is the human rights and ethics issue. The human rights declaration after the world war 2 has specified a set of rules which should be followed universally. There are a few services offered by the health care system that contradict the basic human rights. These services are abortion, cloning, euthanasia and etcetera. In addition to that, the Australian healthcare system should also pay attention to the problem of discrimination and tackle it. (Leeder, 1999)

Secondly, medical technology is another important issue that the Australian healthcare system should take care of. Although the medical technology has made vast improvements in the field and many diseases can now be diagnosed and cured efficiently but there is a drawback to this feature. The medical technology used in Australia consists of X-RAY, MRI, PET and CAT. (Leeder, 1999)

These technological equipment make the cost of medical process very high. As these machines are very expensive to buy and operate, they incur high costs that then increase the overall cost of medication. In addition, some of the new technology has given birth to the ethical issues that are faced by the system. Moreover, the availability of these services is not necessary in all medical institutions. This irregular availability eventually leads to discrimination and exacerbates the issue of human rights. (Leeder, 1999)

Moreover, the effectiveness of the new technology is also considered. The evaluation of the benefits that these pieces of technology bestow upon us against the costs they incur can be performed in order to develop a straight thought of continuing or stopping the use of technology. The Australian government set up a Medical Services Advisory Committee. The duty of this committee is to advise the government, after careful evaluation, about the use of this new technology. (Leeder, 1999)