Health care in Australia operates under a shared public-private model underpinned by the Medicare system, the national single-payer funding model. State and territory governments operate public health facilities where eligible patients receive care free of charge. Primary health services, such as GP clinics, are privately owned in most situations, but attract Medicare rebates. Australian citizens, permanent residents, and some visitors and visa holders are eligible for health services under the Medicare system. Individuals are encouraged through tax surcharges to purchase health insurance to cover services offered in the private sector, and further fund health care.
In 1999, the Howard government introduced the private health insurance rebate scheme, under which the government contributed up to 30% of the private health insurance premium of people covered by Medicare. Including these rebates, Medicare is the major component of the total Commonwealth health budget, taking up about 43% of the total. The program was estimated to cost $18.3 billion in 2007–08.General Government Expenses, Budget 2007–08. In 2009 before means testing was introduced, the private health insurance rebate was estimated to cost $4 billion, around 20% of the total budget. The overall figure was projected to rise by almost 4% annually in real terms in 2007. In 2013–14 Medicare expenditure was $19 billion and expected to reach $23.6 billion in 2016/7. In 2017–18, total health spending was $185.4 billion, equating to $7,485 per person, an increase of 1.2%, which was lower than the decade average of 3.9%. The majority of health spending went on hospitals (40%) and primary health care (34%). Health spending accounted for 10% of overall economic activity.
State and territory governments (through agencies such as Queensland Health) regulate and administer the major elements of healthcare such as doctors, public hospitals and ambulance services. The federal Minister for Health sets national health policy and may attach conditions to funding provided to state and territory governments. The funding model for healthcare in Australia has seen political polarisation, with governments being crucial in shaping national healthcare policy.
In 2013, the National Disability Insurance Scheme (NDIS) was commenced. This provides a national platform to individuals with disability to gain access to funding. The NDIS aims to provide resources to support individuals with disabilities in terms of medical management as well as social support to assist them in pursuing their dreams, careers, and hobbies. The NDIS also has supports for family members to aid them in taking care of their loved ones and avoid issues like carer burnout. Unfortunately, the National Disability Insurance Scheme is not without its limitations but overall the system is standardised across Australia and has helped many people with disabilities improve their quality of life.
Statistics
In 2015, Australia had (on average) 3.52 physicians per 1000 population and, in 2022–23, 2.5 hospital bed per 1000 population. At the 2011 Australian Census 70,200 medical practitioners (including doctors and specialist medical practitioners) and 257,200 nurses were recorded as currently working. 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.
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.
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.
Australia's health-expenditure–to–GDP ratio (9.9%) in 2022–23 was slightly above average compared with other OECD countries.
Medicare and the universal health care system
Medicare is the main funding source for health services in Australia and the universal health care system. "Medicare" can be broken down into four distinct programs, each run by Services Australia:
the Medicare Benefits Schedule (MBS), which is the namesake program that subsidises a portion of each 'episode' of a health service the National Health Reform Agreement (NHRA), which covers the cost of treatment in state and territory facilities, such as hospitals, by sharing the cost between the Australian Government and state and territory government the Pharmaceutical Benefits Schedule (PBS) which assists with the costs of some medicines and therapies and My Aged Care (MAC), which provides contributions towards the cost of aged care services.
Medicare contributions to health services are only made for Australian citizens and permanent residents. Some visitors and visa holders are also entitled to Medicare coverage, although cover for international visitors under Reciprocal Health Care Agreements is limited to immediately necessary care only.
To be eligible for on-the-spot Medicare coverage, patients generally have to present their Medicare card at the time. Funding for Medicare is raised by a 2% Medicare levy, as well as a Medicare levy surcharge for people over 35 that don't have private health insurance. Exemptions and reductions are available for low-income earners. Both the MBS and PBS also have "safety nets" which further cover the cost of health care and medicines for people that pay a lot out-of-pocket each year.
Medicare does not cover the cost of ambulance services, most dental care, glasses, contact lenses or hearing aides, and cosmetic surgery. Most of these are covered under private health insurance, or by state and territory governments.
Medicare Benefits Schedule The Medicare Benefits Schedule lists all services that they will contribute towards, how much a standard cost for that service is (called the schedule Fee), and what percentage of that fee that Medicare will cover. Around 90% of general practitioners "bulk bill" consultations, which means they will only charge how much Medicare will cover for eligible patients. The MBS also contributes partially towards hospital admissions, with the rest being covered by either a NHRA payment (for public hospitals) or private health insurance (for either public or private hospitals).
Health care providers may individually decide how much to charge, and may charge more than the scheduled fee. Families or individuals are also subject to the safety net threshold: after a certain amount of out-of-pocket expenses in a calendar year, Medicare will increase the contribution percentage for specialist services. Certain concession holders, such as veterans, those with disabilities, and low-income earners receiving payments from Centrelink, often can claim a higher percentage of the scheduled fee than what the general population can.Thresholds and Concession Calculated Amounts . Medicare Australia.
Other universal health services like the cancer screening programs and the National Disability Insurance Scheme (NDIS) are covered under separate agreements between the different levels of government. There are also other programs within the broad Medicare system that support access to mental health services (Better Access Scheme), care for Aboriginal and Torres Strait Islander Australians, and rural and remote people.
National Health Reform Agreement Public hospitals and community health services are owned and operated by state and territory health departments, and jointly funded by the Australian Government and the state and territory government. These include local public health units, but exclude Primary Health Networks (which are funded directly by the federal government). Additional costs to public health services relating to the COVID-19 pandemic receive additional contributions under the National Partnership Agreement on COVID-19 Response (NPA).
NHRA funding is a mix of two systems: block funding and activity-based funding. Block funding is specific to each hospital, and is used to cover the cost of teaching and research, and for most rural and remote health facilities. Activity-based funding (ABF) is used for larger hospitals, where they receive a certain amount of money for 'episode of care' they provide, depending on what care is provided.
The National Health Funding Pool Administrator (the Administrator), through the National Health Funding Body (NHFB), oversees the National Health Funding Pool (NHFP) which is a lump-sum account of all government spending on health care. The Administrator uses information from the Independent Health and Aged Care Pricing Authority (IHACPA) to distribute those funds to the local health networks that operate public hospitals.
Pharmaceutical Benefits Scheme Under the Pharmaceutical Benefits Scheme, some prescription medications are subsidised by the Australian Government. The PBS does not cover the full cost of medications, and doesn't cover all medications either. People with certain concession cards, or that spend a lot on medicine, can also receive further rebates.
Health insurance 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 subsidises out-of-hospital medical treatment and funds free treatment in a public hospital.
In Australia, health insurance is provided by a number of health insurance organisations, called health funds. Such insurance is optional, and covers the cost of treatment as a private patient in a hospital, and may provide "extras" cover.
Hospital cover. Medicare covers the cost of treatment as a public patient at a public hospital for elective treatments as well as emergency or medically necessary treatments. A public patient is a person whose treatment is covered by Medicare, while a private patient is one whose hospital accommodation is covered entirely by either a health fund or by the patient themselves (self-funding). While Medicare does not make any contribution towards hospital accommodation fees, theatres fees or prostheses for privately admitted patients, it does pay a portion of all medical fees (fees charged by doctors) associated with a private admission. There are a number of community objections to being a public patient in a public hospital, including the lack of choice of doctors or carers, long waiting lists, etc., and many people who take out health insurance do so to be treated as a private patient in either a public hospital or a private hospital. A private patient in a public hospital is entitled to a doctor of their choice, and cover for accommodation in a ward, and theatre fees for surgery. A person without insurance cover must resort to being a public patient at a public hospital or else carry the cost alone. Extras cover. Some non-medical or allied health services are not covered by Medicare or by standard health insurance, such as dentistry, medical devices and alternative medicine. A person may in addition or as an alternative take out "extras" cover for such treatments. What services are covered and how much is reimbursed and caps that apply vary between funds.
Health insurance in Australia is community rated; health funds cannot take age, gender, pre-existing conditions or other underlying risk factors into account in the calculation of premiums.