It’s official: we’re paying more for this vital service 18



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Australians are picking up some of the slack of government belt-tightening by paying more for health, with experts concerned this could reduce the equity in Australia’s health system, a new report has revealed.

The Commonwealth government’s warnings of the health system being unsustainable have been used to justify it stripping A$2 billion from the 2015 health budget over the next five years, raising the sceptre of increasing bills for every Australian.

An Australian Institute for Health and Welfare report released today shows the non-government share of health expenditure grew by more than double that of both commonwealth and state governments in 2013-14.

Commonwealth spending rose to nearly A$64 billion in 2013-14, up 2.4% from the previous year. While state and territory governments spent A$41 billion – up by about 2% from 2012-13.

But non-government spending surged by five percentage points, to nearly A$50 billion in 2013-14, generally in line with the upward trend for the funding source over the last decade.

Professor of Health Economics at the University of Technology Sydney, Rosalie Viney, said the general trend was “concerning”.

“Government expenditure has remained steady compared with private expenditures and if this translates into out-of-pocket expenses for consumers, it’s likely to increase the inequity in our system.”

Spending by individuals accounted for 55%, or $A27.5 billion, of non-government funding. The report showed some of this was made up of payments for medications not subsidised by the Pharmaceutical Benefits Scheme (PBS).

Professor Viney said some of the increase in private spending also related to government changes in means testing of health insurance and tax rebates.

Across all funding sources, that include government, insurers and out-of-pocket expenses, nearly A$155 billion was spent on health in 2013-14. This was up by 3.1% from the previous year. Around A$6,639 was spent on health per person on health in 2013–14, A$94 more than the year before.

Despite this, Senior Research Fellow in Health Economics at Curtin University, Dr Richard Norman, said the growth in health spending was relatively slow in the reporting year.

“The rate of increase in expenditure over the year is a little higher than over the previous year but is below the long term trend. Even if the level of service stays the same for each type of person, you would expect some positive increase in total spending because the population ages and older people on average use more health services,” he said.

“So, I think the figures might reasonably be interpreted as suggesting that the system is achieving a balance between cost containment and delivery of good care.”

But Dr Norman added a focus on expenditure alone showed only half of the overall picture.

“Patient-reported outcomes would be really valuable alongside this kind of data, to identify if the money is being spent in a way that actually benefits individual patients or not,” he said.

The report showed Australia’s health expenditure accounted for 9.8% of GDP in 2013–14, which, despite the slow growth, was up from 9.7% the year before. This was because health spending grew faster than the overall economy.

International comparisons however, showed Australia’s proportion of health spending to GDP was half that of the United States. Professor Viney said this showed universal health care was a more efficient way of running a system.

“The US is spending way more as a proportion of GDP, almost twice as much per person. And it’s not buying better health outcomes, it’s just paying more for them – and more inequitably, I might add,” she said.

“One of the things it shows is that a universal health care system that’s got a high proportion of government funding tends to be a better way of managing health expenditure.”

Do you think it’s fair we pay more for health so the government can repair the budget?

Nicola McCaskill, Editor, The Conversation and Sasha Petrova, Editor, The Conversation

This article was originally published on The Conversation. Read the original article.

Starts at 60 Writers

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  1. Private health funds are a rip off.
    There is still the Gap to pay.
    Once upon a time there was no gap.
    Greedy doctors.
    No government regulations in place.

  2. They are back to this again, this Government is like a dog who has buried a decaying bone and is digging it up again for us to consume, it still won’t wash with the Australia public

  3. Surprise surprise, of course we are paying to much in more ways than one, our PRIVATE HEALTH INSURANCE IS OUT OF CONTROL the fee goes up and the BENEFIT goes down, I have had 3 major surgeries in the last 16 months and my out of pocket costs was $3020.00, that is disgusting and if it continues the Government will find that people will DROP PRIVATE HEALTH AND THERE WILL BE MORE STRESS ON THE SYSTEM.

  4. Most medical specialists want their fees up front.
    By the time you pay the hospital excess, the doctor, the anaethestist, the physiotherapist, take it to medicare, then see how out of pocket you are. What’s the solution.
    Why are they building all these hospitals.
    Pensioners should be allowed to go to any public or private hospital for free.
    Denmark looks after their elderly.

    3 REPLY
    • I totally agree that pensioners should be able to attend both public & private hospitals, this would help shorten the waiting lists. I have been waiting for 3 years just to see a specialist at a public hospital. This is before getting on the waiting list for surgery.

    • We have a new hospital here in Perth called Fiona Stanley. There have been many problems with the hospital. It is a total disgrace.

    • We are on a pension and hubby drives school buses, he needs prostate op, but the specialist only uses the private hospital so not covered. His fee just over$3000,00 the anathesist fee is$2500,00 and the hospital is around$ 2500,00 so all up around $8000,00 so have to save or get money from supa makes it hard.

  5. ago when people were opting out of health insurance the providers increased fee’s because of this. Now when more and more people are taking up health insurance they claim they need to increase fee’s again to cover this. I believe they can’t have it both ways, they are taking us for fools, NOT ON!!!

  6. When my husband has his prostate surgery 3 years ago we had to pay the surgeon 3 weeks before the surgery or he would not operate. After medicare rebate we were out of pocket $7000.00. Our health fund Bupa have been wonderful with all my husbands hospitalisations as we have been fully covered. If we had been with Medibank Private we would not have been covered for the robot to do the surgery. That was $4000.00. I have no complaints with Bupa they have been wonderful. Medicare is the problem. They keep decreasing the rebate.

  7. My PHI is currently costing me just under $4 per day. Most people spend more than that on their daily Lattes.

    About 9 years ago I was thinking of lowering my PHI cover. Then BANG, major op, 7 days in ICU then another week in hospital and I did not see a piece of paper. Everything was covered. Because of an office SNAFU I did get to see the invoice for the Op. Only $38k!!.

    Since then I’ve had 6 more visits to the theatre for various minor ops and stays in hospital and have only had to pay the $250 annual excess.

    Conclusion. I’ll keep paying my PHI. 😉

  8. I recently suffered a stroke, I have private hospital insureance, but not extras. The so called “gap”, Chasmn would be a better description is costing a small fortune. M R I’s CT scans, Ultra soynds, Blood tests every few days, is costing an arm and a leg.
    I am not a pensioner so there is nothing I receive for a lesser price. My partner has chosen to keep working, just as well, we wouldn’t be doing very well if he wasnt.

  9. I already pay $70 per GP visit so I can have the doctor of my choice. Not much back from Medicare and can’t claim the gap from our very expensive private health insurance
    I have chronic and debilitating arthritis ….. Can’t afford specialist consultations
    Of course the govt plan is incredibly unfair to EVERYONE

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