Transcript Document

HEALTHCARE FINANCING REFORM IN
AUSTRALIA
International Hospital Federation Congress 2001
Pre Congress Health Summit , Hong Kong
14 May 2001
Presented by
Mark Cormack, National Director
Australian Healthcare Association
Healthcare Financing Reform in Australia
• Overview of Government Responsibilities for Healthcare
• Finance
• Sources, Growth, Expenditure
• Profile of Hospital Services
• Health Financing Reform
• Health Insurance
• Pharmaceutical Benefits
• Casemix Funding of Acute Hospital Care
• Medical Services Payments
Government Responsibilities for Healthcare
• Population
• 18.7 Million
• Settlement concentrated in coastal cities & regions
• Government
• Federal system since 1901
• 3 tiers
• Commonwealth,
• 6 States & 2 Territories
• Local, Municipal
Government Responsibilities for Healthcare
The National Healthcare Package
Medicare
• Hospital care – emergency, elective and continuing care from
a public hospital.
• National, compulsory health insurance scheme, tax funded.
• Medical & optometric care – ambulatory and in-hospital
Other programs
• Pharmaceutical Benefits Scheme
• Aged Care
• Community & Allied Healthcare
• Private Health Insurance Subsidy – 30%
Government Responsibilities for Healthcare
Commonwealth (National) Responsibilities
•
Leadership in health policy – national initiatives
•
Funding medical services – Medical Benefits Schedule (MBS)
and pharmaceuticals - Pharmaceutical Benefits Scheme
(PBS)
•
Joint funding of public hospital and related healthcare
services with States / Territories
•
Funding of residential and community based aged care
services.
•
Private Health Insurance – regulation, subsidy program
•
Special Health Programs – indigenous health, veterans
services
•
Research funding
Government Responsibilities for Healthcare
State / Territory Responsibilities
• Joint funding of public hospital and related services with
Commonwealth
• Purchasing and delivery of public hospital, community, allied
health and related services.
• Provision of care services for older people
• Public & environmental health
• Regulation of health professionals and health facilities
• Research
Private & Non-Government Sector Role in
Health Care
1.
Private Health Insurance
2.
Private Hospitals
3.
Aged & Community Care
4.
Medical Practitioners
5.
Dental and Allied Healthcare
6.
Diagnostic & Laboratory Services
7.
Pharmaceutical Dispensing
Financing Healthcare – Sources
1998/99 Total Expenditure A$ 50.3 BN
23%
30%
47%
Commonwealth
Non Government
State, Territory, Local
Financing Healthcare
% of GDP
Year
9
/9
98
8
/9
97
7
/9
96
6
95
/9
5
/9
94
4
/9
93
3
/9
92
2
/9
91
1
/9
90
89
/9
0
8.6
8.4
8.2
8
7.8
7.6
7.4
7.2
7
Financing Healthcare - Growth
Average Annual Growth in GDP &
Health Expenditure
7
6
5
4
%
3
2
1
0
GDP
Health $
90-93
93-98
Period
90-99
Healthcare Expenditure - Type
Distribution of Healthcare Expenditure
% of Total
Expenditure
35
30
25
20
15
10
5
0
1989-90
1997-98
Hosp-Pub
Hosp-Priv
Medical
Type of Care
Pharmacy
Healthcare Expenditure - Type
Institutional v Community Care
% of Total Health
Expenditure
100%
80%
49.5
52.6
60%
Community
Institutional
40%
20%
50.5
47.4
1989-90
1997-98
0%
Period
Healthcare Expenditure - Type
Annual Growth Rates in expenditure by
Type - Constant Prices
10
Hosp-Pub
%
8
Hosp-Priv
6
4
Medical
2
Pharmacy
0
1992
1994
1996
Year
1998
Total Health
Expenditure
Profile of Hospital Services
From 1994-95 – 1998-99
• Private Hospital proportion of total activity increased from
29.9% to 32%
• Overall utilisation per 1000 persons increased by 9.7%
• Day only admissions increased from 40.2% - 47.9% of total
• Average stay decreased from 4.3 to 3.9 days
• Beds per 1000 decreased from 3.3 to 2.9
Structure
• Networks of public hospitals and community based services
under integrated area / regional management.
• Private and not for profit hospitals merging and vertical
integration.
• Private Hospitals have more restricted range of services and
lower overall complexity (Cost weight=0.91 v 0.99 public)
Health Financing Reforms - Key Drivers
1.
2.
3.
Management of financial risk associated with uncapped
national programs – Commonwealth
a.
Pharmaceutical Benefits
b.
Medical Benefits
Management of political and social risk associated with capped,
jointly funded hospital programs – State & Territory.
a.
Technical Efficiency
b.
Rationing services
Differing views on the role of the private sector.
a.
Complementary
b.
Duplicate System
Health Financing Reforms –
Pharmaceutical Benefits Scheme
Key Features of PBS
1.
Co-payments
•
2.
Access to a comprehensive range of drugs with
affordable co-payment dispensed by private sector
pharmacies
Control of Drugs on the Schedule
•
Clinical and cost effectiveness
•
Generic substitution
3.
Monopsony purchasing arrangements
4.
Reductions in dispensing overheads
5.
Low overall cost to government; affordable access to
consumers
Health Financing Reforms –
Casemix / episode funding of acute hospital care
Key Features
• National casemix development program introduced as part of
1988-1992 Commonwealth: State Health Financing Agreement
•
AN – DRGs developed and progressively revised and updated
• Implemented for the funding of acute hospitals progressively from
1993; now in place in all States/Territories for most hospitals
Functions
• National – monitor utilisation and performance in Commonwealth
State hospital funding agreements
• State / Territory – Allocation and purchasing of hospital services
• Private Insurers – Purchasing and Payment
• Providers – planning, benchmarking and quality improvement
Health Financing Reforms –
Casemix / episode funding of acute hospital care
Developments
• National Hospital Cost Data Collection
• Sub acute, non acute and rehabilitation classification system
• Ambulatory classification system
• Technical efficiency gains in a capped funding environment
Health Financing Reforms –
Private Health Insurance
PHI Coverage
• Private hospital care
• Choice of medical practitioner
• Medical co-payment
• Ancillary / extras cover
Recent problems and Issues
• High premium cost and annual increases
• High co-payments for medical components
• Competition with a free, good quality public system
• Community rating
Health Financing Reforms –
Private Health Insurance
Consequences
• Decline in membership – 50% (1984) to 30.5%(1998)
• Selective use of public and private systems due to co-payments
• Pressure on the public system
• Financial viability of the PHI funds
Government Initiatives
• 1% income tax levy for high income earners (1998)
• Subsidy of 30% for all PHI fund members (1999)
• Legislation
• Co-payments; price control; prudential arrangements;
consumer information
• Abolition of community rating; replaced by Lifetime Healthcover
(2000)
Health Financing Reforms –
Private Health Insurance
Results so far
• PHI coverage up from 30.5% (1998) to 45.4% (2000)
• Increase in proportion % of claims with no co-payment from
50% to 65%
• 27% increase in the PHI fund reserves in 12 months
• Minimal or no increases in PHI premiums
• $A 2.0 BN cost to government or 5.7% of total government
sourced health expenditure (0% in 1996)
Health Financing Reforms –
Private Health Insurance
Criticism
1.
Impact on public hospital activity
2.
New PHI fund members are young, low risk
3.
High cost
4.
Opportunity Cost
5.
Range of causal factors
•
6.
Subsidy, tax impost, Lifetime Healthcover
Durability & cost effectiveness
Health Financing Reforms
Medical Services Payments
Medicare (MBS)
•
Patient billing versus Bulk Billing (71.2%)
Cost Containment
1.
Supply of medical practitioners
2.
Restrictions on new technology
3.
Primary care gateways
4.
Restrictions on level of benefits paid
5.
Blended payment methods
6.
Capping agreements
Results
•
4.9 % p.a. average growth since 1989/90
Health Financing Reforms
Next Steps & Conclusion
1.
Gradual, not revolutionary reform
2.
No change to Medicare as the central policy setting
3.
Trial / pilots to reform Commonwealth: State issues
4.
Political dynamics
For more about Australia’s Health Care
system ………………..
AHA National Congress 2001
Fremantle, Western Australia
13 – 14 September 2001
Mark Cormack
National Director
Australian Healthcare Association
Email: [email protected]
Web: www.aushealthcare.com.au
m.