Australian Social Policy: Health Australian Healthcare Policy: Fluctuations between Private and Public Systems

In Australia, one of the most politically divisive and publically discussed social policy domains is that of health. It has been an issue under discussion by political candidates at each Commonwealth election over the past seventy years due to the politically engrained differences in how the political parties have conceptualized managing the Australian healthcare system. These political divisions are in addition to the stakeholder positions that are usual to any healthcare system, with patient, provider, research, and insurance interests often having vastly different goals and motivations. Health policy in Australia is indeed reflective of the plurality of political parties and ideologies core to the Commonwealth's legislature (Gray 2003). The political tensions around health are no small matter, either, with the healthcare industry being the largest industry in the Commonwealth (Duckett 1999).

In light of the political fluctuations and their impact upon policy development and change, a key resource for understanding the priorities and activities of the Australian government's health initiatives is through the Australian Institute of Health and Welfare, which publishes over 100 policy and action briefings each year (Australian Institute of Health and Welfare 2011). Issues of access have remained central to the concerns of the nonpartisan Institute of Health and Welfare which handles public health, medical health, medical economics, bioethics, and health management aspects of the Commonwealth's policy and action plan. One of the main subsections of the Institute's website covers the issues of "Services, workforce, and spending" within the Commonwealth's health plan and policy (Australian Institute of Health and Welfare 2011). In a report published in 2010, the Australian Government reported the following long-term trends with regard to per capita health expenditure (this should be seen as distinct from reporting on public health expenditure):

"Australia has been one of the first countries to adopt a newly developed international standard, the System of National Accounts 2008. The new System has increased the scope of production activities included in the measurement of GDP. The changes have increased the size of Australia's GDP, which has had the effect of reducing Australia's health to GDP ratio, particularly in comparison with other countries that have not yet adopted the new standard. Health expenditure grew from $48.4 billion (7.8% of GDP) in 1998-99 to $112.8 billion (9.0% of GDP) in 2008-09. In 2008-09 prices, this was a change from $66.5 billion in 1998-99 to $112.8 billion in 2008-09. (Australian Government 2010)"

These trends in Australian per capita health expenditure reflect that despite political tensions surrounding how much the Australian government 'should' be spending on per capital healthcare-related costs, the rate of expenditure nearly doubled in the decade between 1999 and 2009. This period of time saw a great deal of change and fluctuation in Australian healthcare policy, starting with a series of revisions to the Medicare policy and culminating in Australia's response to the global recession and rising healthcare costs. The historical context of the political fluctuations within Australia and its impact upon the healthcare infrastructure and the policies of which is comprised is essential to the understanding of how the healthcare industry has become the largest and most controversial industry in the Commonwealth.

The Australian Labour Party has been the face of nationalized social medicine policy in the past several decades, operating from a perspective that healthcare is a protected right, for which the government is obligated to provide basic access. The platform position of the Australian Labour Party has been that publically funded healthcare is central to ensuring equitable access for all Australians. The other end of the political spectrum is represented in the Australian Liberal and National Parties, which function as a coalition with regards to healthcare policy position. The coalition favors a more libertarian stance on health policy development in Australia that minimizes the public sector in favor of privatized care (Palmer and Short 2007). The political pendulum has swung between these political parties and their respective political agendas, often influenced by social, cultural, and particularly economic factors. The resulting pattern of Australian healthcare policy reflects multiple changes in direction from a philosophical perspective, with social benefits related to healthcare coverage having changed multiple times in the past several decades (Gray 2003).

A chief example of the oscillation of Australian healthcare policy development is historically situated in the early postwar era. When a national hospital system was created in 1946, it collapsed with a lack of participation from Australian healthcare providers. By the early 1950s, with a new, more conservative administration...

The new private system was unpopular due to the financial reasons outlined as barriers to access as well as a lack of regulation on costs and premiums (Palmer and Short 2007).
In another swing of the pendulum of public opinion and political policy, a public healthcare and insurance coverage system was introduced in the mid 1970s, called Medibank This, too, proved unpopular and when the National and Liberal party coalition came into power, the system reverted to privatized care and coverage. Another public option was introduced in 1983. While Medicare has not been dismantled as other public healthcare systems in the Commonwealth, such as the 1946 Chifley system or Medibank, political pressures have influenced the degree to which the program has been funded over the past three decades (Gray 2003).

The current Medicare system is financed by the Commonwealth government and is managed by the Health Insurance Commission. It was established such that the Commonwealth and the constituent states Under current policy, Australian citizens are covered for all care pertaining to necessary hospitalization and care and up to eighty-five percent of out patient procedures, although with a bulk billing option, which has been a matter of some controversy, healthcare providers may opt to bill the Heath Insurance Commission directly instead of the patient (Australian Government 2011; Hall 2006).

The health policies since the advent of Medicare in the Commonwealth have impacted Australian health demography, with a steady decline in private insurance subscription rates to under one in three persons in 2005 (Gray 2003). Insurance lobbyists have, for the most part, been unable to sway the Labour Party to favor private insurance over public coverage and costs have held relatively constant, particularly compared to other developed nations. A notable exception to this stabilization of political debate occurred in 1999 when private insurance rebate was created but failed to significantly increase the number of Australians selecting private insurance coverage (Duckett 1999).

A more recent policy initiative that did increase the rate of private insurance coverage was a controversial but well-publicized health campaign, the Lifetime Health Cover, which placed upon Australian citizens over the age of 30 a surcharge for not electing to maintain private insurance coverage in addition to the Medicare coverage as previously outlined. In public discourse, the campaign, which carried a tagline of "Run for Cover," was derided for instilling a sense of fear and financial penalty upon Australians and that these were unsavory incentives for driving people to private insurance coverage (Parliament of Australia 2000).

In response to public and political outcry over this and the bulk billing debate, prior to the 2004 elections, a comprehensive reform policy, "A Fairer Medicare" was introduced, although neither public nor industrial interests supported the final product. A revision, "Medicare Plus" was crafted with bipartisan participation following the creation of a special legislative committee and reformatted the payment structure for physicians using bulk billing as well as providing better coverage for vulnerable populations. This rapid sequence of events, following several years of relative stability following the initial passage of Medicare was widely attributed to the Labour government's concerns in the lead up to the 2004 general elections (Australian Institute for Primary Care; 2003; Hall 2006).

One element of policy development that shifted with the activity surrounding the 2004 Medicare revisions was that there was a greater degree of involvement in the process from academic and public stakeholders. The government commissioned multiple reports from the Australian Institute for Primary Care and also held multiple public hearings in order to determine the successes and failures of the Medicare program on the general population (Essue 2010).

There have been many factors in the past decade in particular which have exerted tremendous influence over the current trajectory of Australian healthcare policy. The global recession affected Australia as well, and with healthcare occupying more than five times the budgeting capacity of even the defense budget in the modern world, the healthcare industry has been hit as well (Haynes 2011). Along with other countries with private health insurance Australia has experienced rising healthcare costs. There have been substantial lobbying efforts from insurance and healthcare provider interests to prevent healthcare reform efforts such as capping copayment consumer premiums. From the social, liberal platform of the Labour Party, the insurance premium policies impose financial hardships on low-income Australian citizens and jeopardize the mandate for universal basic healthcare access (Gray 2003; Haynes 2011).

There are some elements of Australian health policy that are beyond the scope of the political…