Beruflich Dokumente
Kultur Dokumente
PUBH1382 Australian Health Care System
Week 3 (Section A): Public & Private health care
INSTRUCTORS: Mervyn Jackson & Amy Loughman
Learning Objectives
1. Describe the public hospital system in terms of:
a. Types of patients and geographic distribution
b. Measure of hospital workload (i.e., separations)
c. Acute, continuing and emergency care
2. What is the role of public hospitals?
a. Current “free” medical and surgical care
b. Choice of doctor, multidisciplinary care and patient-centred care
c. Health professional education and research
d. Contribution to community well-being
3. Explain how public hospitals are funded (including case-mix) and describe current
innovations in health reforms (including Local Hospital Networks – LHNs)
a. Outline the various sources of funds from public and private health funding
schemes
4. Explain how private health insurance operates in Australia in terms of its
relationship with Medicare
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Notes
Australia's Health Care System is a mixed system of private and public health care. Health
care in Australia is rapidly evolving and currently there is much debate and discussion on
the issues of how health care will be provided to meet changing demographics and
population needs in the future.
1. The public hospital system
The Australian Healthcare system is well-funded, well-resourced and provides free
healthcare for all Australian citizens. While it covers the whole Australian continent, there is
inequality in access (and some services) in terms of rural-remote locations.
Australia’s health care system is based on universal coverage with equal access to all
citizens. In 2014-15, 698 public hospitals were in operation in Australia (and 624 private
hospitals). In these public hospitals, 60,300 beds were available which equates to
approximately 2.5 hospital beds per 1000 people. If private beds are included, then the
ratio increases to 3.93 beds per 1000 of the population. This ratio [of 3.93] compares
favourably to the world average [2.9 beds per 1000 in 20051, the most recent data] and is
significantly better than both the UK and USA whose 2010 average bed ratio was 3.2 per
1000 people.
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It’s not ideal to compare across years like this but unfortunately we need to work with the
data that is available!
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Australia is a large continent with many remote communities. Public hospitals are
geographically dispersed with approximately 58% of public hospitals located in regional
areas. In terms of equity, one of the critical measures is accessibility – people can obtain
health care at the right place and right time irrespective of type of hospital, indigenous
status, remoteness of residence and socio-economic status
Patient types
There are two types of patients: inpatients and outpatients. Inpatients are patients that are
assigned a bed. This can be for same-day care or overnight stays of one or more nights.
Outpatients are those that are given care but are not assigned a bed and are not admitted
to the hospital. Outpatient services include physical examination, consultation or treatment
where the patient is not admitted and the condition is non-urgent. Out-patients make up
around half of the patients [50.9%] presenting at a public hospitals and around two-thirds
of private hospital patients [68.7% of all presentations].
Hospital Workload
In Australia, hospital productivity is typically measured by episodes of care or number of
separations. An ‘episode of care’ is a patient’s journey from admission to discharge. A
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‘separation’ is a term used in hospitals for patients that have ended their episode of care,
and this is commonly how workload is measured. A separation is due to one of four
reasons: death, change of type of care being received, transfer to another hospital and
discharge to home or a care facility such as an aged care facility. In 2011, there were 5.379
million hospital separations with this number growing at around 3% per year. Australia’s
productivity is 162 patient separations per 1000 population per year which is considerably
higher than both UK and USA [both at 126 patients per 1000 citizens]. To reduce the
increasing numbers of admissions and discharges, Australia is focusing on preventative
health care and health promotion.
Public hospitals were primarily established to provide acute/emergency care. However,
over time they have developed a continuum of care. Hence, there are two types of care in
public hospitals: acute/ emergency care and continuing care.
Acute/emergency care is where patients are admitted through the emergency department
and normally involve life threatening illnesses or ailments that need to be seen quickly.
There are five categories for emergency department patients:
1. Immediately life threatening conditions that require resuscitation
2. Emergency conditions that need to be seen swiftly
3. Urgent conditions that need to be seen as quickly as possible
4. Semi-urgent conditions that can wait but still need to be seen as quickly as possible,
but not before the first three conditions
5. Non urgent conditions that can wait to be seen.
Continuing care is care continued over longer periods of time
Around 25% of patients that are seen through the emergency room are then admitted to a
bed for further care or observation. Further, hospitals have been forced to create a
sub-acute care provision to accommodate patients that require palliative care, inpatient
rehabilitation services, respite services and geriatric evaluation and management (GEM)
services. These patients are not ready to be discharged from their episode of care, however
they need further non- acute services.
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2. The role of public hospitals
The modern role of public hospitals has shifted from treating emergencies to the active
treatment of all types of patients. Through Medicare, patients receiving acute care
including surgery are not required to pay. This free service also includes treatment by
medications when the condition is severe but does not require surgery. Currently, patients
requiring on-going medical care comprise two thirds [67%] of all patient separations and
has inadvertently shifted hospital focus from acute out-patient primary health care (such as
prevention and community based options) to primary care (treatment of chronic
conditions).
Historically, medical treatments in hospitals were conducted one on one with a patient by
their medical practitioner - creating a therapeutic bond between doctor and patient. With
the introduction of Medicare, hospital care shifted to multidisciplinary healthcare teams
that included but not limited to medical specialists, nurses with different specialities,
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physiotherapists, occupational therapists, dieticians, speech pathologists, social workers
and psychologists. Traditionally, these multidisciplinary teams operated within their
professional disciplines and often provided fragmented care to the patient
[profession-centred health care]. These days, hospitals offer patient-centred care – that is
care that suits individual patient/client needs and is respectful of their individual
differences (including culture, religion, age, gender), their values, specific needs and
treatment requirements. While patient-centred care is the ideal approach and is strongly
recommended, more often than not, public health care systems remain organised and
managed to benefit the health professionals rather than the patients.
“Accreditation is an independent review process aimed at identifying the level of
congruence between practices within a hospital and defined quality standards” (Australian
Council on Healthcare Standards, 2011
http://www.achs.org.au/about-us/what-we-do/what-is-accreditation/ )
Quality of care (including safety for staff and patients) in public hospitals is maintained in
many different ways. One of the main methods is accreditation and is the way hospitals are
held accountable for the care they provide. Accreditation is completed by an independent
assessor who inspects processes {see below] to ensure that the set standards are met and
are being upheld. This ensures patient safety and wellbeing. There are independent
professional standards that doctors and the other health professionals must uphold to
retain their employment within a public hospital [see Australian Health Practitioner
Regulation Agency - http://www.ahpra.gov.au/ ].
One of the major advances (and costs) in modern hospital care is medical technology. As
more research is put into medical technology, advances are made to improve patient care.
Medical technology includes medications, equipment, medical devices and instruments
that are used during patient care. These advances in technology have shaped practice to
improve outcomes for patients. For example, surgeries that once required open incisions
can now be done arthroscopically (minimal wounds) or via lasers (no wound). The use of
modern technology means patients are receiving the best care available and the length of
stay in hospital can be reduced from multi day stays to same day care. Hence, the average
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length of stay (the mean number of days an admitted inpatient will remain in hospital) has
been reduced to 4.6 days in 2005. This is partly due to advances in improved medical
training and introduction of medical technology.
However, the efficiencies gained by same-day admissions and early discharge have been
masked by rapidly increasing demand from an ageing population and the increase in
chronic and complex conditions experienced by todays’ patients. This increase in demand
by patients with chronic conditions is not only increasing health care costs but is placing
extra demands on hospital services.
The term ‘access block’ (also referred to as ‘bed block’) describes when a patient presents at
the emergency department and requires a bed, but there are none available. This bed
shortage is caused primarily by three factors:
1. Reduction in hospital funding
2. Increase in chronic illness in the Australian population
3. Increase in ageing population (with an increase in their care needs)
This access block causes challenges for hospital staff and resources with estimates that this
problem may increase mortality rates among emergency patients by up to 30%. While a
complete solution is complex, one finding is that most of the older patients occupying
acute public hospital beds are waiting to be discharged to aged care facilities.
Health professional education and research
One of the major roles of public hospitals that is not appreciated by the general Australian
public is on-going research and provision of education/training for future health care
professionals. For instance, the Australian public hospital system is responsible for the
provision of placements for undergraduate students studying medicine, nursing and the
allied health professions (including physiotherapists, occupational therapists, dieticians,
social workers and psychologists). Such placements come at a considerable cost to
hospitals that are already under financial strain. While funding of hospitals is primarily a
State-Territory Government responsibility, tertiary education of undergraduate health
professionals is a Commonwealth government obligation. Over the last decade,
cost-shifting has occurred whereby hospitals are now charging Universities significant fees
for health care placements. So far, the Commonwealth Government has required
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Universities to absorb these extra costs. However, it has begun to threaten the number of
medical and health sciences students Universities will be able to effectively place within the
public hospital system.
Contribution to community wellbeing
Public hospitals make significant positive contributions to the local community.
1. Hospitals employ a large number of people from local communities – and
employment is one of the main social determinants of positive health
2. Hospitals make a large economic contribution to local communities – both direct
(salaries) and indirect (hospital employees spending money in the local community
3. While hospitals are funded on performance/activity (see casemix funding), many
hospital services are not directly associated with income – for example, prevention
of chronic illness and overall health promotion in the local community
4. Hospitals attract people, with many young families and elderly people looking for
homes that are close to hospitals and health services.
When hospitals close down in small rural communities, this can have a significant
detrimental effect in terms of reduced local employment, reduced money in local
community, increase in behaviours that lead to chronic illness, and, a domino effect with
less local infrastructure/small businesses – resulting in less population.
One innovation in the Australian Health Care system is the introduction of Local Hospital
Networks. This has allowed all the hospitals in a local region to be linked in terms of
organizations and provision of services. Smaller rural hospitals are linked with large
regional hospitals and patients can be admitted and transferred between hospitals
depending upon their needs. For instance, surgery can be performed at larger hospitals but
patients can be sent to their smaller regional hospital to recuperate.
3. Funding and innovations in health reform
Australian citizens are entitled to receive free health care. Funding for public hospital
services comes from the Commonwealth Government (39%), State-Territory Governments
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(54%) and from private health care services provided by public hospitals (7%). The average
cost per patient separation is increasing more than one percent over inflation and is
currently about $5,300 per patient admission.
Funding for public hospital care is based on Australian Health Care Agreements which are
based on three principles:
1. Public hospital services must be free of charges
2. Access to public hospital services must be provided on clinical need and in a timely
manner
3. Access to these services must be equitable regardless of geographical location
Funding of public hospital services is based on an activity-based casemix scheme. Casemix
funding is based on the estimated cost of providing care for each separate medical
condition. That is, hospitals are provided a (casemix) budget allocation to cover the costs of
treating a group of patients with similar clinical conditions that require similar hospital
services. The case mix funding does not consider the outcome of patient separations but is
designed to encourage high quality efficient care (treating more patients in a shorter time)
A current innovative reform in the Australian healthcare system is the development of
Local Hospital Networks (LHNs). Up until recent times, each hospital was autonomous and
was funding separately and was required to submit a budget and maintain its own staff
and equipment. LHNs allowed hospitals within defined geographically regions to
organizationally unite. This reform aimed to allow local communities to work with local
hospital networks to provide more local community responsive health care services.
However, with the increased centralization of decision making, clinicians at each hospital
are raising concerns that economic decisions are over-riding good clinical patient-centred
practice.
While there continues to be free medical and surgical care for acute, emergency patients in
a timely manner, the treatment for non-life threatening conditions [eg, hip replacements]
comes under elective surgery which continues to have significantly long waiting lists. This
situation has “forced” citizens to opt for private health insurance which allows both public
and private hospitals to treat these patients immediately.
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To ensure efficiency and quality of care in public hospitals, the Government has
established:
● A case-mix funding formula – where all hospitals receive set amounts of money to
treat differing presenting problems, and
● Accreditation procedures – where hospitals must evaluate their procedures and
performance against measures of quality of care and safety of patients
4. Private health insurance and Medicare
The Australian Health Care System relies on multiple sources to provide funding.
Ultimately, these all rely on money paid by individuals who contribute these funds through
the tax system by paying doctors and other health care professionals directly, or by
contributing to private health insurance schemes. Additionally, funding for the Health Care
System also comes from special purpose funds such as state-based motor vehicle accident
or workplace injury compensation schemes, or through payments made for medical and
hospital expenses of former defence force personnel (usually known as veterans)
There are many funding sources for the Australian Health Care System and there are
different proportions of funds from each source for the various health care systems. There
are two main schemes: public scheme and private scheme
● Public schemes – administered by governments and use taxation as raise funds –
for example, Medicare
Total health expenditure: 2014 – 2015 (most recent report)
Total health expenditure in 2014015 was $161.1 billion ($4.4 billion higher than the
previous year). The majority of funding for Australian health care comes from the federal
and state governments (66.9% of total health expenditure). Non-government sources
(individuals, private health insurance and other non-government sources) spent $53.4
billion on health in 2014-15. Estimated per person expenditure on health averaged $6,468.
Health expenditure as a proportion of GDP ratio is shown in the figure below. Australia is
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close to the
OECD median.
In public
hospitals,
Governments
fund
approximately
89% with private
funding covering
around 10% of
the costs. For
private hospitals,
the opposite is
true with
Government
funding
[including
Department of
Veteran Affairs]
covering
approximately
10% of the costs.
The private
(enterprise)
sector operates
in parallel to the
public hospital system. Public hospitals are primarily focussed on acute, emergency cases,
while private hospitals focus on longer term specialist care and elective surgeries. Medicare
pays for all public hospital acute and emergency services and provides part payments for
the staff providing specialist long term care and elective surgeries (in both public and
private hospitals). The remaining costs are paid either directly by the patient or via their
private health insurance.
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Health Insurance
Health insurance in Australia is provided both by the Government (via Medicare and other
schemes [Work-cover, TAC and DVA) and by private health insurers (Government-owned
Medibank and other companies). Medicare is a universal system, operated via the
Government, based on taxable income and covers all Australian citizens – this means the
risk of paying for health services is shared equally by all citizens. Australians can choose to
take out private health insurance – for those who do, the premiums are all the same and
therefore the cost of payments for services is again equally shared. The only variation on
this is called “lifetime health cover”, where health funds charge higher premiums for people
become members of health funds after the age of 30 years.
Medicare provides universal coverage for all essential health services within Australia.
Medicare’s objective is to provide access to health care free of charge and minimise ‘gap’
payments by providing safety nets for families that reach the threshold of these “out of
pocket” gap payments.
Private health insurance allows people who join these funds to obtain assistance in paying
for extra services (such as dental or chiropractic, depending on your provider and choice of
premium), private hospital charges including the 25% of the ‘schedule fee’ that is not
covered by Medicare and some specified services and procedures. The benefit of private
health insurance is access to immediate service (avoid public hospital waiting lists) and
choice of doctor and hospital.
Note, there is an approximate 30% government rebate (depending on tax bracket) for
private health insurance. If you select to have your private health insurer cover extra
services, your premium will increase. The most expensive premium available (for hospital
cover only) in Australia in 2016 cost more than $7618 per year for family cover2.
2
https://www.finder.com.au/press-release-june-2016-cost-of-health-insurance
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