Health Care Systems Reform in Insurance vs Tax based System Australia

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Health Care Systems Reform in Insurance vs Tax
based SystemAustralia

• Florence Kwan
• Janice Yim
• Nora Kwok
• Molin Lin
• Rita Mak

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• What are the measures and policies adopted ?
• - Financing
• - Private Insurance
• - PBS
• - Medicare
• - Workforce

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Hospital Funding Model
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INITIATIVE

• Casemix funding

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Hospital funding

• Traditional funding of acute hospital
• Historical budgets
• Hospital budgets may have been approved on an
  input or line-item basis
• Renegotiated when the hospital had a major
  redevelopment or additional services approved.

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Hospital funding

• Negotiated budget
• Contract between state and the hospital
• Include negotiated goals covering a range of
  aspects of hospital administration
• Including broad targets
• Specification of the funds in that year

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Hospital funding

• Inefficient and inequitable
• output based funding system

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Hospital funding

• Casemix funding
• Monies are provided on the basis of services
  actually delivered
• Make more informed decisions on the best and most
  appropriate use of hospital resources
• Provides incentive such that hospital can treat
  additional patients up to the point at which
  marginal treatment cost equals marginal revenue

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Casemix funding

• National casemix development program introduced
  as part of 1988-92 Commonwealth State Health
  Financing Agreement
• Aims
• encourage more efficient patient treatment
• Recognizes the costs associated with different
  procedures

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Casemix funding

• The budget for a hospital is based on the number
  and patients treated in the hospital
• AN-DRGs Australian National Diagnostic Related
  Groups were developed as clinical and resource
  homogeneous categories for inpatients grouping
  for payment purposes

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Casemix Funding

• Casemix development program
• Substantial funding for establishing the first
  Australian DRG classification

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Casemix Funding

• Funding of each hospital are based on relative
  weights (cost weight) estimated using cost
  modelling approach
• Cost modelling approach
• Specific prices of each DRG is calculated uses
  general ledger data and patient activity data

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Casemix Funding

• The Casemix Development Program, funded the
  development of Australian service weights to be
  used in calculating DRG relative weights for
  hospital as state and national level.
• Annual update by the National Hospital data
  collection

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Casemix Funding

• Casemix funding
• Victoria 1993-1994
• South Australia 1994-1995
• Western Australian and Tasmania 1996-97
• Using casemix to inform the budget setting
  process
• New South Wales 2000
• Queensland
• Northern Territory
• Australian Capital Territory

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Casemix Funding Model

• State Victoria
• Hospital Funding
• fixed variable grant

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Victoria Casemix funding model

• Fixed grant to cover hospital overhead costs
• Variable
• based on the payment units of the DRG system

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Private Health Insurance - Background

• Coverage
• Provides choice of doctor, hospital, timing of
  procedure
• Scope of coverage gt Medicare
• eg. Dental, optical, physiotherapy and podiatry
• Premium
• Community rate everyone the same, regardless of
  health status, claims history, age

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Private Health Insurance - initiatives

• Lifetime Health Cover
• Replaced community rate in 2000.Join the PHI lt 30
  years of age
• and stay in PHI pay a lower premium
  throughout their lives.
• People gt 30 pay 2 more every year delay.
• Discourage hit and run behavior.
• Overall claim rate ?

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Private Health Insurance - initiatives

• 30 rebate
• Subsidy of 30 for all PHI fund members by
  Government in 1999

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Private Health Insurance - initiatives

• Positive effect in a short run
• Membership increased from 30.5 to 42.9 of
  Australian from 1998-2004
• 27 increase in PHI fund reserves in 12 months
• Minimal or no increases in PHI premiums
• Decrease in overall claim rate

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Pharmaceutical Benefits Scheme (PBS) Background

• One of the major national subsidy
• Cover all Australians on the purchase of medicine
• Nearly 2/3 of prescriptions are subsidized
• Pay more if want patented / branded drug
• Two groups of consumers general concessional
• Safety net on annual expenses

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Pharmaceutical Benefits Scheme (PBS) - Initiatives

• 12.5 price reduction for new brands after 1
  August 2005
• Generic drug already listed on PBS
• Price of medicines are linked in generic drugs
• Reduction flow on to all brands of that medicine
• Applied to combination medicines on a pro-rata
  basis
• Applied to the first new brand after 1 August
  2005 only
• (Once a patent medicine expires, other
  manufacturers can produce equivalent products)

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Pharmaceutical Benefits Scheme (PBS) - Initiatives

• Increase co-payment

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Pharmaceutical Benefits Scheme (PBS) - Initiatives

• Threshold Adjustment

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Pharmaceutical Benefits Scheme (PBS) - Initiatives

• Positive effect in a short run
• Reduce the cost of PBS. Maintain its
  affordability
• Decrease contribution from Government
• Increase contribution from customers

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Medicare Initiatives

• Universal access to medical services
• What is Medicare?
• Social insurance scheme by Government
• Tax funded
• 85 of schedule fee for outpatient services

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Medicare Initiatives (Bulk Billing)

• What is bulk billing?
• GPs bill Medicare directly, accepting the
  Medicare rebate as full payment
• No out of pocket cost to patient
• No bulk billing----?GPs charge more

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Medicare Initiatives (Bulk Billing)

• What is so good about bulk billing?
• No co-payment for patients -gt no cost-shifting to
  patients
• Minimize govt. administration fee
• No costs shifting to the state

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Medicare Initiatives (Bulk billing)
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Medicare

• In April, 2003, Fairer Medicare was proposed
  introduce a participating practice scheme
• Concessional patients
• GPs bulk bill ? increased Medicare rebates
• 1 for metropolitan city
• 2.95 for non-metropolitan city
• 5.3 in rural centre
• 6.3 in outer rural and remote area

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Medicare

• Non-concessional patients
• if GPs chose not to bulk billing these patients,
  still able to charge the patient the co-payment
  and claim Medicare rebate via HIC online
• Avoiding the transaction costs

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Medicare

• In November 2003, another policy MedicarePlus was
  passed no participating practice scheme
• Concessional patients
• 5 in metropolitan areas
• 7.5 in remote, rural and regional areas
• Children under 16
• Extended the increase rebate to children under 16
• Safety net
• 80 rebate above 300 thresholds

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Overall of Healthcare Workforce

• 798,201 people are employed in health and
  community services industries
• (9.7 of total workforce 17.1 of total female
  workforce)

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What major problems they are facing ?

• Shortage of healthcare workforce
• - Growth of demand for medical services
• - Ageing workforce
• (31 of the workforce is aged lt35 yrs
• 12 is aged gt55 or above)
• - Changes in participation (as measured by hours
  
• worked per week)
• (34 of workforce is part-time, with
• 38.6 working lt 35 hours/week)

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Initiatives to address workforce shortage

• Australian Health Workforce Advisory Committee
  (AHWAC)
• Australian Medical Workforce Advisory Committee
  (AMWAC)
• National Nursing and Nursing Education Taskforce
• Major Initiatives
• Workforce Supply
• Adjust the training intake number
• Maximise the working life of the current health
  workforce
• Workforce Flexibility
• Avoid Overspecialization -gt Substitution
• Workforce PlanningAlign education and training
  supply

Australia and New Zealand Health Policy 2005, 214
36
27June2005 (www.healthworkforce.health.nsw.gov.a
u)
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Rural Health Practice

• 1996 Census
• 17.9 million Australian
• 27 live in regional rural area
• 3 live in remote area
• Work related injury is common e.g. Mining
  Forestry
• Lack of funding and infrastructure
• Rural Health ServicesGP are on call much more
  GP providing hospital-based services and
  emergency medicine

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Initiatives for Rural Health Services

• Short-term solution overseas trained doctors
  (30.6 of doctors in remote practice)
• Nurse-led Strategy e.g. nurse anesthestist
• Promotion of e-health (telecommunication)
• Financial support (scholarships), personal
  support and mentoring and student clubs, for
  rural student

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Reference and Bibliography

• Duckett, S.J. (2004) The Australian Health Care
  System. 2nd edition. South Melbourne, Vic., New
  York Oxford University Press
• Duckett, S.J. (1998) Casemix funding for acute
  hospital inpatient services in Australia. MJA.
  169S17-S21
• Casemix Funding for Acute Hospital Care in
  Victoria, Australia in http//www.health.vic.gov.a
  u/casemix/about.htm
• Duckett, S.J (2000) The development of
  australian refined diagnosis related groups The
  Australian inpatient casemix classification
  CASEMIX, volume 2, no 4 115 to 120
• www.medicareaustralia.gov.au 
• New challenges, new solution. Australian
  Consumers Association, July 2002 
• Health Care System in eight countries, trends and
  challenges, European Observatory on Health Care
  System, April 2002