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Australia has a mixed public-private health system built on the basic tenet of providing universal access to needed health care (Doorsaler et al 2008). Through Medicare, a publicly financed universal health insurance scheme, every resident Australian is entitled to free of charge basic hospital, medical and pharmaceutical services in public hospitals as public patients. However, most medical services are provided by private practitioners at a paid fee-for-service schedule set by the commonwealth government (Hall 1999). The major strength of the Australian healthcare system as constituted is that Medicare has been able to provide free universal access to health care for the Australian public. Furthermore, the Australian healthcare system is characterized comprehensive national policies which address a wide range of health sectors such as mental health, people with disabilities, preventive health and aged care (Hall 1999). This has been the outcome of a politicized policy process where health policies have been high on the priorities of successive federal governments. (Kidd 2009). According to Southby (2008) and Richardson (2009), this is characterized by episodic and incremental reforms in successive regimes.

However, while Medicare does appear to provide equitable distribution of healthcare access, the system is hamstrung by social inequalities in the quality of healthcare (Dwyer 2008). According to Dwyer and Eagar (2008), the quality of healthcare is shaped by factors such as place and levels of income with higher income levels and urban location correlated with higher quality and timelier health care. This is captured in the life expectancies of women, urban residents which are higher than those of men and rural dwellers (Armstrong et al 2007). Indigenous Australians- Aborigines and Torres Strait Islanders- also have a lower life expectancy than for most Australians (Kidd 2009). The social inequalities in the Australian health care system are reflected in the problems that plague the hospital system. As a result of a complex and “bewildering” funding system which introduces funding gaps and poor urban planning, many hospitals (especially rural) are faced by overwhelming demand and are not adequately staffed skill wise to meet the needs of their patients (Dwyer 2008: Dwyer and Eagar 2008). The funding structure is based on historical budgets and rarely meets current demands for health services (Dwyer 2008). Inadequate funding has also contributed to the failure of national health policies such as the mental health policy of deinstitutionalization which sought to relocate medical services for the disabled from hospitals to community based care (Hall 2009).

Current Debate

The inequalities in the health care system are the subject of current debate in Australian health care reform. Particularly, the public subsidy of private health insurance has been the dominant national issue in health care reform (Hall 2010). It is argued that the private health insurance rebates (from 30%) introduced as a means of encouraging more Australians to take up private health insurance and reduce demand on public hospitals have not been effective (Ford 2002). The 30% rebate has shifted tax subsidies for private health insurance in favor of high income earners compounding the inequality problem (Smith 2001). The cost of private health insurance has been rising steadily increasing the cost pressure of public subsidy for private insurance for Australian taxpayers (Richardson 2009). It is argued that the inequitable redistribution deflects spending away from or de-prioritizes investment in the quality of care at public hospitals (Hall 2010). There are also more effective ways to reduce demand on public hospitals than rebates. More attention should be paid to primary health care (Kidd et al 2008) and preventive health initiatives to reduce the demand on public hospitals due to preventable diseases and conditions such as obesity, cholera and smoking-related complications (Ham 1997).


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