2.3 Australia’s health system including; * local, state and federal governments’ responsibilities for health and health funding * the values that underpin the Australian health system * Medicare, Pharmaceutical Benefits Scheme (PBS) and private health insurance;

Federal, State and Local Government’s responsibility for health, including funding In Australia there are three levels of government with various responsibilities for the health care that is delivered;  Federal or Commonwealth  State  Local There are also public and private health providers, who may operate as individuals or as part of an institution (specialists etc…) Of the health expenditure that is funded in Australia, two-thirds is from Federal government contributions and the other third is from State, Territory and local governments All health expenditure is funded by households through taxation, out of pocket costs or health insurance premiums 70% of the health systems funding comes from the government Federal governments main contribution is through Medicare and the PBS

Federal Government Funds:Responsible for: -Medicare -PBS -State and Territory hospitals -Financial incentives for PHI -National screening programs -Aged care -Funding of health care system -Administration of Medicare -Administration of PBS -Quarantine Regulates: -Safety of Pharmaceuticals -PHI industry -Food safety and regulations -Medical research -War veterans

Federal Government 1. Administration of Medicare. This includes funding the Medicare system, relevant legislation relating to Medicare and the day to day running of the scheme (more detail in coming slides) 2. Administration of the Pharmaceutical Benefits Scheme (PBS) (more detail in coming slides) 3. Quarantine : The federal government is responsible for protecting Australia's borders.  This includes ensuring that no biological or environmental hazards enter the country, such as the malaria or bird flu.  Australia has strict quarantine measures.  These measures include mandatory reporting of sick passengers on commercial airlines and vessels, spraying inside the cabins of some planes before arrival in Australia and communicating with authorities overseas to monitor infection patterns of certain diseases such as tuberculosis. 4. Funding : The federal government oversees the funding of the health system.  provides grants to the states and territories to run hospitals and health services  establishes and funds strategies or initiatives considered to be of national importance and relevance, including: – National Mental Health Strategy – National Palliative Care Strategy – Breastscreen – Immunisation – National Health Priority Areas  Provides a refund on the cost of private health insurance (private health insurance rebates)  establishes grants for the states/territories to provide free hospital treatment in public hospitals for eligible Medicare patients (which includes all Australian citizens)  funds and regulates residential aged care. 5. Regulation : The federal government regulates many aspects of the health system to ensure that it runs effectively.  overseeing regulations with regard to pharmaceutical goods. This includes deciding on which medications will be available in Australia. This is based on scientific analysis of the safety and quality of available medicines.  regulating the private health insurance industry. This involves approving premium (cost) increases and providing incentives for people to take out private health insurance.  monitoring food safety and regulations. This is done mainly through Food Standards Australia New Zealand, sometimes referred to as FSANZ. FSANZ makes relevant legislation regarding food supply and marketing.

State Government Funds:Responsible for: -State and Territory hospitals -Community and public health e.g VicHealth -Delivery of; -Public hospitals -Psychiatric hospitals -School curriculum -Public dental health -Maternal and child health -Implementation at State level of National Mental Health Strategy -Implementation at State level of National Palliative Care Strategy. -Environmental health programs -Ambulance services -Regulation of: -Licensing GP’s- -Licensing private hospitals -Industry regulations such as alcohol and tobacco and food safety guidelines -Legislation of road rules and smoking bans. -Works with organisations such as VicHealth. Focus on the challenges facing the people who live in their state or territory

Local Government Receive Funds from:Responsible for: -Funds received from Federal and State government -Rate Collection -Carrying out of health inspections e.g of restaurants -Removal of waste -Maintaining of parks/sporting facilities -Monitoring environmental health eg noise and pollution -Deliver of immunisations -Delivery of Maternal and Child health centres -Meals of wheels services -Water Quality testing -Developing, implementing and enforcing local bylaws e.g what can be put in the bins. Focus on the needs and challenges faced by the local people

Health expenditure Refer to booklet page 42

MEDICARE, PBS and PHI

Medicare Australia’s universal health care system, designed to provide accessible and affordable health care for all Australians, and to improve the health outcomes for all Australian residents Gives all Australians, permanent residents and people from countries with an agreement access to health care that is subsidized by the government Medicare is the scheme that gives Australian residents access to health care. To help fund the Medicare scheme, most taxpayers pay a Medicare levy of 1.5% of their taxable income.

What does Medicare cover? Out of hospital expenses  Medicare will pay all or some of essential health care services  Eg. Consultation fees for doctors and specialists, tests, x-rays and eye tests performed by optometrists In-hospital expenses  Public patient in a public hospital, treatment by doctors and specialists  If an individual chooses to be admitted to a private hospital or as a private patient in a public hospital, Medicare will pay 75% of the schedule fee for treatment Medicare Safety Net  Is for people who require frequent services covered by Medicare. They will receive additional financial support once a certain level of medical expenses is reached.

What is not covered by Medicare? Any cosmetic or unnecessary procedures are generally not covered  Private hospital (Medicare will pay 75%)  General dental examinations and treatment  Home nursing care  Ambulance services Alternative medicines are generally not covered  Chiropractor, Acupuncture, Massage, Naturopathy Medicare can contribute if these services are carried out or referred by a GP Health related aids  Glasses and contact lenses  Hearing aids  Prostheses  Pharmaceuticals are not covered under Medicare, but may be subsidized under the PBS Medical costs if someone else is responsible (e.g. Compensation insurer, employer etc...)

Medicare terms Schedule fee- the amount Medicare indicates that they will contribute to selected procedures. Bulk billed- if the doctor charges only the schedule fee and you do not have any out of pocket expenses. Patient Co-payment- when the doctor charges more than the Medicate schedule fee and you pay the difference.

The advantages and disadvantages of Medicare AdvantagesDisadvantages - Choice of doctor for out-of- hospital services - Available to all Australian citizens - Reciprocal agreement between Australia and other countries allows Australian citizens to access free health care in selected countries - Covers tests and examinations, doctors and specialists fees (schedule fee only), and some procedures such as x-rays and eye tests - Medicare Safety Net - No choice of doctor for in- hospital treatments - Waiting lists for many treatments - Does not cover alternative therapies - Often does not cover the full amount of a doctor’s visit Refer to booklet pages 48 and 49

How is Medicare funded? Funded through three sources of income;  Medicare levy  An additional 1.5% tax placed on the taxable income of most taxpayers  People may be exempt from the levy or it may be reduced (low income earners etc…)  Medicare levy surcharge  The Medicare Levy Surcharge (MLS) is levied on Australian taxpayers who do not have private health insurance and who earn above a certain amount ($84,000 for individuals and $168,000 for families).  The surcharge increases as income increases  The Medicare Levy Surcharge is calculated at the rate of 1% to 1.5% of annual income.  The Medicare Levy Surcharge is in addition to the Medicare Levy of 1.5%.  The surcharge aims to encourage individuals to take out private hospital cover, and where possible, to use the private system to reduce the demand on the public Medicare system.  General taxation Based on the notion that contributions should be made by individuals and families based on their ability to pay

Base Tier (no change) Tier 1Tier 2Tier 3 Singles$84,000 or less $84,001 - $97,000 $97,001 - $130,000 $130,001 or more Families*$168,000 or less $168,000 - $194,000 $194,001 - $260,000 $260,000 or more Medicare Levy Surcharge Rate0.0%1.0%1.25%1.5% Income test thresholds for Medicare levy surcharge is income tested against the income thresholds in the table below. Table 1: Income thresholds

Medicare costs data

The Pharmaceutical Benefits Scheme The Pharmaceutical Benefits Scheme (PBS) is a Federal Government-funded scheme that subsidises the cost of a wide range of prescription medications, providing Australians with access to necessary and cost-effective medicines at an affordable price. The purpose is to provide essential medicines to people who need them regardless of their ability to pay (by subsidising the cost, where individuals make a co-payment and the government covers the rest of the cost Co-payment; approx cost for most PBS subsidised mediations in 2011 was $34.20 or $5.60 for concession card holders. PSB paid out approx $8billion to make up the difference. Medications are more likely to be listed on the schedule if they are life saving, life enhancing or disease preventing. Medications on the list of regularly reviewed. (2600 medications on the list) PBS Safety Net - If a person needs a lot of medication in any one year, once the threshold is reached, then the co-payments required are further reduced

Private Health Insurance Is an additional insurance that can be purchased on top of Medicare, where members pay a premium (fee) for health-related costs not covered by Medicare Gives Australians choice in the sort of care they wish to have People can also opt for ‘extras’ cover, which can cover services provided by;  Dentists  Physiotherapists  Chiropractors Most private health insurance policies consist of hospital cover, ancillary or extras cover and ambulance cover Cover ranges from basic to comprehensive. Individuals pay a ‘premium’ for their PHI. Rw

Private Health Insurance Incentives Lifetime Cover Is a government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their cover. People who are over 30 and do not have hospital cover but decide to take out hospital cover later in life pay a 2% loading on top of the cost of the health insurance for every year they are aged over 30. For example a person who takes out hospital cover at aged 40 will pay 20% more than someone who first took out hospital cover at age 30. Government Rebate  Most Australians with private health insurance receive a rebate from the Australian Government to help cover the cost of their premiums. The Private Health Insurance Rebate is income tested. This means the Private Health Insurance Rebate is reduced or no rebate is paid if people earn more than a certain amount. Medicare Levy Surcharge Refer to booklet pages 52

Base Tier (no change) Tier 1Tier 2Tier 3 Singles$84,000 or less $84,001 - $97,000 $97,001 - $130,000 $130,001 or more Families*$168,000 or less $168,000 - $194,000 $194,001 - $260,000 $260,000 or more Private Health Insurance rebate entitlement Under 6530%20%10%0% years35%25%15%0% 70 years40%30%20%0% Medicare Levy Surcharge Rate0.0%1.0%1.25%1.5% Income test thresholds for The private health insurance rebate and Medicare levy surcharge are income tested against the income thresholds in the table below. Table 1: Income thresholds

Advantages and Disadvantages AdvantagesDisadvantages - Enables access to private hospital care - Choice of doctor while in public or private hospital - Shorter waiting times for some medical procedures such as elective surgery - Depending on the level of cover purchased, services such as dental, chiropractic, physiotherapy, optometry and dietetics could be paid for - Helps to keep the costs of operating Medicare under control - High income earners with private health insurance do not have to pay the additional 1% Medicare levy - Government rebate - ‘Lifetime Cover’ - Costly in terms of the premiums that have to be paid - Sometimes have a ‘gap’, which means the insurance doesn’t cover the whole fee and the individual must pay the difference - Qualifying periods apply for some conditions (e.g. Pregnancy)

Changes in PHI memberships over time.

TRUE OR FALSE: Medicare and Private Health Insurance Medicare is the responsibility of the Federal Government State governments look after the running of public hospitals Private Health Insurance is an inexpensive health cover option To receive a Medicare Card you must be a resident of Australia Physiotherapy, ambulance, glasses and hearing aids are all covered by Medicare Local governments’ main responsibility for health is the eradication of infectious diseases An advantage of Medicate is the shorter hospital waiting lists The ‘Gap’ is the difference between the Medicare scheduled fee and the cost of the service The Medicare principle ‘universality’ means that health care should be the same throughout Australia Bulk billing is when the fee charged is above the Medicare scheduled fee All tax payers must pay the 1.5% Medicare Levy Lifetime cover means you can go to the doctors free for the rest of your life A disadvantage of private health insurance is that you don't get to choose your own doctor School dental services are run by the federal government The rebate is an incentive to encourage people to take out private health insurance Quarantine services are the responsibility of the Federal government All prescription drugs are subsidised under the PBS Medicare as set up in 1984 High income earners must pay an extra 1-1.5% on top of the 1.5% Levy if they do not have Private Health Insurance Blood tests, xrays, eye tests and treatments in a public hospital are not covered by Medicare. Refer to booklet page 53

PRACTICE EXAM QUESTION Question 8 (Section A), VCAA exam 2013 Outline two examples of how Medicare is different from private health insurance. (2 marks) ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Refer to booklet pages 50,56,57,58

PRACTICE EXAM QUESTION Section A, Question 3, VCAA 2012 The Australian Government is responsible for administering the Pharmaceutical Benefits Scheme (PBS). What is the PBS? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ 2 marks

PRACTICE EXAM QUESTION Explain how the PBS may improve the health status of Australians. ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ 2 mark

PRACTICE EXAM QUESTION Question 7, VCAA 2008 Marco has been advised by his parents to take out private health insurance before his 30 th birthday. What is private health insurance? ______________________________________________________________ ______________________________________________________________ 1 mark Why would Marco be advised to take out private health insurance prior to turning 30? ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ 2 marks

PRACTICE EXAM QUESTION Question 6 (Section B), VCAA exam 2013 List one Federal Government and one State Government responsibility in relation to asthma

PRACTICE EXAM QUESTION Question 8 (Section A), VCAA Exam 2012 In 2011, the Australian Institute of Health and Welfare released a report called ‘The health of Australian’s males.’ It reported that one in six Australian males did not use Medicare services in This number is lower than that for females. Identify the level of government responsible for administering Medicare. 1 mark Explain how Medicare is funded. 2 marks Explain one determinant of health that could account for the behaviour of males with regard to their use of Medicare services. 2 marks List two health services males might use that could be claimed through Medicare. 2 marks

PRACTICE EXAM QUESTION Question 5 (section A), VCAA sample exam 2010 Two ways in which the federal government aims to improve the health of Australians is through the provision of Medicare and the Pharmaceutical Benefits Scheme. Describe how Medicare is funded. ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ 2 marks What is the Pharmaceutical Benefits Scheme. ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ 2 marks

PRACTICE EXAM QUESTION Question 3 (section A), VCAA 2010 Explain how Medicare may influence the health status of Australians. ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ 3 marks

VALUES OF AUSTRALIA’S HEALTH CARE SYSTEM

The Values that underpin the Australian Health System A number of values have been established to ensure we maintain a health care system that adequately services the Australian population, while maintaining high quality care These values aim to guide the direction of future decision making with regards to the health system There are seven values; R esponsive A ccessible C ontinuous E ffective E fficient S afe S ustainable

EffectiveDescription: Relates to achieving desired outcomes (the number of patients treated, rate of improvement in a patient’s condition, number of people screened for certain conditions)  in an appropriate timeframe  in a manner that is tailored to the individual needs of the patient  by ensuring the health care professionals and the facilities in which they work are of the highest possible standard How it is visible in the health care system: Measuring the effectiveness of the health care system can be done by analyzing data (immunization rates, incidence, treatments etc…) Health professionals must be well educated and have appropriate training and qualifications, this is regulated by the state government.

Efficient Description: A health system that can achieve desired outcomes with cost- effective use of resources. Some interventions are ineffective and the outcomes do not reflected the amount of money invested. How it is visible in the health care system Management and information technology departments assessing the cost of diagnosis and treatment methods.

Responsive Description Two aspects of this value;  Treating people with respect (includes confidentiality, privacy and having input with regards to treatment options); and  Ensuring the health system is client-oriented Should be centered on the user’s needs How it is visible in the health care system People should be at the centre of the health care system, including;  Receiving immediate treatment in the case of emergencies  Having a clean environment and adequate food while in hospital  Having access to social support networks

Accessible Description Accessibility encompasses the value of equity, where every person who is eligible to use the healthy system should have the same access regardless of barriers such as distance, discrimination and affordability How it is visible in the health care system  Within a reasonable time from their homes  Home care – doctor and nurses performing house visits  Air ambulances  Emergency care (24 hour services)  Health care facilities open at times that people find convenient

Safe Description Relates to reducing the risks associated with the delivery of health care, including health care management and the environment in which health care is delivered. How it is visible in the health care system Examples of risks could include;  Infection from hospital setting  Poor safety within the physical environment, such as slippery floors and sharp objects  Risks associated with surgery, including a non-sterile environment  Products that could cause negative effects such as bandages, medications and surgical instruments  Hand sanitisers around the hospital to reduce spread of disease

Continuous Description The ability to provide uninterrupted and coordinated care between different health professionals. For example, doctors consulting with surgeons, hospitals and specialists to provide appropriate and more manageable care for the patient. How it is visible in the health care system Doctors writing referrals for patients to see a specialist, but submitting notes to the specialist about the patient’s condition.

Sustainable Description A health care system that can ‘provide infrastructure such as workforce, facilities and equipment, be innovative and respond to emerging needs (research, monitoring)’ is sustainable Largely relates to funding. How it is visible in the health care system Medicare levy, Medicare levy surcharge and general taxation collection to fund health care system.

PRACTICE EXAM QUESTIONS The Men’s Project The Men’s Project is a program developed by a health service attached to a large metropolitan hospital for men who are finding it difficult to deal with their own violence and anger. It is designed to help relationships and improve family life. The program arose as a result of men phoning the local telephone counseling services and requesting help. It focuses on anger- management techniques and improving communication skills. Initially, men attend a one-on-one interview. They are then given the option of attending more one-on one sessions or a group program where they can interact with others in a similar position. Sessions are run by trained facilitators and are confidential The program is located in a lower socioeconomic area in a large city. Costs are charged according to income levels but are kept as low as possible. Sessions are run on two days a week plus after hours and on weekends. Which level of government is likely to fund this program? Discuss which health-system values are evident in this program. Do you think this program would be successful? Why or why not? Refer to booklet page 60

PRACTICE EXAM QUESTIONS Question 9 (section A), VCAA 2011 There are a number of values that underpin Australia’s health care system. List two of these values. 1.__________________________________________________________ 2.__________________________________________________________ 2 marks Refer to booklet page 60

PRACTICE EXAM QUESTIONS Question 1c (section B), VCAA 2011 In November 2008, for the first time in Australian history, Australian Governments agreed to work towards six clear and specific targets to significantly reduce the gap in life expectancy and opportunities between Indigenous and non-Indigenous Australians. This is known as the Closing the Gap Program. As part of this program, the Australian Government has placed 273 health professionals in remote primary health care services on short-term placements. This includes 31 general practitioners, 178 registered nurses, 22 allied health professionals and 42 dental personnel. Explain how the Closing the Gap Program may reflect one of the values that underpin Australia’s health system. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 3 marks Refer to booklet page 61

Refer to booklet page 62. Identify Values of the health care system that are evident/not evident.