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Let us begin with a background on the basic structure of the health care system

February 25, 2019 0 Comment

Let us begin with a background on the basic structure of the health care system. WHO (World Health Organization) defines universal health coverage as a system where everyone has access to quality health services and is protected against financial risk incurred while accessing care. By this definition alone it is come down to 32 out of 35 OECD member countries have Universal Healthcare Coverage and while this does include Australia, the USA unfortunately is not one of them. While doing my research, I have come across that Australia has a 2-tier system which is public or private. All citizens, permanent resident and visa holders are eligible to receive high quality free public inpatient and outpatient hospital care, which includes services from the emergency department through Medicare. But just like any American, Australians also do have to pay an out of pocket fee to see a doctor in the community setting. Approximately 57% of Australians also choose to have private coverage, which can supplement allied health services, such as dental, optometry which can then enable access to private hospitals with your choice of healthcare provider and reduced waiting times for elective procedures. So how does Australia manage to provide basic public services for all Australians? Even though they are being funded through general taxation, all Australians pay a 2% Medicare income tax. An additional 1% is applied to high-income earners who choose not to take out private cover.
By doing some research, comparing the Australians healthcare system to the US, in the 1960s Medicare and Medicaid were introduced in America which was funded by US payroll taxes. It provided coverage to very low income earners and the elderly. However, the majority of Americans are not included in this small cohort and are therefore responsible for almost their entire healthcare cost. What possibly are the reasons for the comparatively high cost of healthcare in the US? Four main reasons, in comparison to other OECD countries include: higher costs of services. This is defined as higher costs for laboratory tests, radiology, doctor’s fees, hospital beds, and private health insurance premiums. Secondly, a greater number of tests are ordered (such as MRI and CT scans) and more surgeries (e.g. CABG, hip and knee replacements) are being performed. Thirdly, a lack of controls in place to limit the rising costs of private insurance. Lastly, greater administrative costs. This is probably due to insurance complexity. Most clinics will not allow you to book an appointment until the office staff personally double check your coverage and this is 100% factual due to the fact that I can attest to this last statement.