Australia ranks third in terms of healthcare quality — as measured by affordability, administrative efficiency, equity, and outcomes — among high-income countries, behind Norway and the Netherlands. At 8.8 percent of GDP, Australia’s total expenditure on health (including government and private sources) remains close to the OECD average of 8.9 percent. For comparison, the U.S. is last place on the list of 11 high-income countries compiled by the Commonwealth Fund, despite spending the most relative to its GDP.

Although healthcare in Australia is, on average, much better than in the U.S., it’s not perfect either. Australia ranks eighth when it comes to providing affordable and timely access to health care, for instance.

In a new study, researchers have identified several challenges but also opportunities for Medicare and universal healthcare in Australia following a system review of developments since the year 2000. The report highlights the urgent need for policy reforms to improve the financing and delivery of healthcare services in the country.

Australia’s Medicare: reforms needed

At the heart of Australia’s healthcare system is Medicare, a government-funded scheme established in 1984 that provides essential medical services to all Australians. Funded through general taxation, Medicare covers a broad range of healthcare services, including doctor visits, hospital care, and prescription medications. This coverage ensures that citizens have access to basic healthcare needs, regardless of their socio-economic status.

The private healthcare sector in Australia operates alongside the public system, offering individuals the choice to opt for private health insurance. Private health insurance grants patients more control over their healthcare experience, such as choosing their preferred doctor or avoiding waiting lists for elective surgeries. The government incentivizes private insurance by imposing a Medicare Levy Surcharge on high-income earners who don’t have private coverage and a Lifetime Health Cover loading on those who delay taking out private insurance until later in life. The average monthly cost for private health insurance can vary from as little as AUD$80 to as much as AUD$250.

But how does Medicare really fare in the real world?

Researchers at Deakin University in Melbourne, the University of Sydney, and the University of Tasmania conducted a review of articles on the Australian healthcare system published since 2000. This included scientific articles that reported quantitative or qualitative research or data analyses, as well as opinion articles, debates, commentaries, editorials, perspectives, and news reports.

The authors identified seven major themes of critique for Australia’s Medicare, such as:

• the division of roles and responsibilities between levels of government
• the fragmentation of the financing structure
• the lack of investment in public health infrastructure
• the shortage of healthcare workers
• the lack of investment in primary healthcare
• the need for more investment in mental health care
• not enough funding in preventive health care.

Perhaps the greatest problem identified in the report is the division of roles and responsibilities between levels of government. The Australian healthcare system is complex comprising multiple financial schemes at the federal and state levels and subsidies to the private sector. This cumbersome finance structure leads to gaps in services and budget silos that undermine efficiency. Patients also experience a lack of integration, coordination, and continuity of care between sectors.

The authors call for policy reforms to address these challenges and improve the delivery of healthcare services in Australia. The researchers propose a national health reform agenda that would address the division of roles and responsibilities between levels of government, as well as other challenges identified in the report.

Another major challenge identified in the report is the lack of investment in public health infrastructure. The COVID-19 pandemic has exposed weaknesses in the Australian healthcare system, including the lack of preparedness for a public health emergency. The report cites a policy paper that suggests that the pandemic can be an opportunity to reshape the Australian health system.

In conclusion, the report states, “A number of challenges threaten the sustainability and equity of the universal health care system in Australia. As the piecemeal reforms of the past twenty years have been inadequate for meeting these challenges, more effective, coordinated approaches are needed to improve and secure the universality of public health care in Australia.”

The findings appeared in The Medical Journal of Australia.