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1041 Words
Introduction : MBA621 Healthcare Systems
Note: In current times, the private healthcare sector of Australia is facing several challenges starting from low growth in private hospital admission to stagnant scenarios on GP and Specialist consultation, and rising costs in the healthcare system. In this presentation, the focus will be given on the current overview of the Australian healthcare system, benefits of the private insurance and the challenges faced by private healthcare hospitals and insurance providers in the country.
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Overview of Australian healthcare system
The Australian private healthcare system comprises private health insurance, which is a voluntary system and provides all coverage of treatment costs, as well as ‘extras related to non-medical services like dental care and physiotherapy (Department of Health and Aged Care, 2019). In Australia, private health insurance policies are of two types: one is hospital cover, which provides coverage of all things like accommodation and theatre fees; and another one is general treatment cover, which covers services like dental care and physiotherapies.
Private hospitals are owned and run by the private sectors including for-profit, and not-for-profit organisations and these hospitals receive income from private health insurers, patients, the Australian Government, and state/territory governments when they contract private hospitals to deliver public hospital services (Ludlow et al., 2024). The private healthcare system of Australia used to be funded by Medicare and private health insurance.
Benefits of private healthcare offer the Australian Government and consumers
Benefits of the Private Healthcare System of Australia to Consumers:
Note: The Australian private healthcare system offers several benefits to its consumers. For example, private health insurance used to offer more choice and flexibility allowing the consumers to be treated as private patients in private hospitals by the doctors of their choice. It can help them to pay for health services that are not covered by Medicare such as dental care and physiotherapy. The private health insurance rebate makes premiums more affordable with the government contributing up to 30 per cent of the premium for those covered by Medicare (Aron-Dine, 2019).
The benefits of the private healthcare system offer the Australian Government:
Note: the private health insurance rebate is subsidized by the government which includes all health insurance coverage, including hospital and ancillary (extras) by a different percentage depending on income tire, and age. It can help the Government to maintain equal accessibility of healthcare services within the countrys population. Medicare levy surcharge is another benefit of the private healthcare system of Australia, where consumers can avoid paying a Medicare levy surcharge of up to 1.5 per cent of taxable income if one can earn income above a certain level (Australian Taxation Office, 2024).
Critical analysis and diagnosis of the challenges faced by both the private healthcare sector and private healthcare insurance providers
Note: From 2018 to 2023, the private hospitals in Australia are experiencing lower admission growth than expected, which is less than 1 per cent (Keneally, Hosie and McArthur, 2024). The financial pressure of low admission growth has been compounded by limited growth in Private Health Insurance rebates (increasing by 2 per cent each year since 2019) and rising operating costs, primarily driven by higher nursing salaries and increased reliance on agency staff. The GP consultations in Australia have also stalled at around 135 million per year since the onset of the COVID-19 pandemic, which accounted for 9 per cent lower than the pre-pandemic growth trajectory (Royal Australian College for General Practitioners, 2023). Medicare-funded specialist consultation has also declined significantly. The proportion of the premiums returned by the patient as benefits has declined from 88.02 per cent in 2018-19 to 81.6 per cent in 2022-23, which indicates the current challenges faced by private insurance providers (Australian Medical Association, 2023). The workforce shortage is another challenge evident in the current private healthcare system of Australia. The shortage of registered nurses has impacted the ability of many hospitals to run at capacity resulting in care delays. The AHPRA registration data of Australia has demonstrated that specialists in surgery, ophthalmology, and surgery have reduced their average hours in private hospitals since the pandemic, which signifies a decrease in government investment in private hospitals for which private insurance providers face financial challenges. Finally, it can be stated that higher out-of-pocket costs for privately provided health care and the increased cost-of-living crisis have impacted consumer demand, which not only affects the private admission rate directly but also private healthcare insurance providers.
One recommendation to justify the identified challenges
Based on the identified challenges that the Private healthcare system of Australia is currently facing, the recommendation that can be suggested is:
Note: As per the identified challenges, increased governmental investment should prioritise increasing the funding for private hospitals and increasing the private health insurance rebate to offset the rising operational costs and ensure financial viability. This investment should also focus on increasing the insurance coverage value by increasing the proportion of premiums returned to ensure the benefit of the patient in the private healthcare system (Braithwaite et al., 2024). Additionally, incentivizing private hospitals to improve operational efficiency and workforce recruitment may help to address the staff shortage and enhance service delivery which can ultimately restore consumer confidence and decrease the rate for private healthcare services.
References
- Aron-Dine, A., 2019, Making health insurance more affordable for middle-income individual market consumers. Center on Budget and Policy Priorities.. <https://www.jstor.org/stable/pdf/resrep23796.pdf>
- Australian Medical Association, 2023, Patients missing out on private health benefits, new report card shows. [online] Australian Medical Association. <>https://www.ama.com.au/media/patients-missing-out-private-health-benefits-new-report-card-shows.
- Australian Taxation Office, 2024, Medicare levy surcharge income, thresholds and rates. [online] www.ato.gov.au. <https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy-surcharge/medicare-levy-surcharge-income-thresholds-and-rates>.
- Braithwaite, J., Churruca, K., Clay-Williams, R., Cutler, H., Ellis, L.A., Long, J.C., Mitchell, R., Mumford, V., Rapport, F., Simons, M. and Zurynski, Y., 2024, Health policy in Australia. InResearch Handbook on Health Care Policy(pp. 347-373). Edward Elgar Publishing. <https://www.elgaronline.com/edcollchap/book/9781800887565/book-part-9781800887565-24.xml>
- Department of Health and Aged Care, 2019, About private health insurance. [online] Australian Government Department of Health and Aged Care. <https://www.health.gov.au/topics/private-health-insurance/about-private-health-insurance>[Accessed 5 Aug. 2024].
- Keneally, B., Hosie, S. & McArthur, M. 2024, Delayed Recovery: Why Times Are Tough for Australias Private Hospitals and What They Can Do About It. [online] BCG Global. <https://www.bcg.com/publications/2024/why-times-are-tough-for-australias-private-hospitals>.
- Ludlow, T., Fooken, J., Rose, C. & Tang, K.K., 2024, Out-of-pocket expenditure, need, utilisation, and private health insurance in the Australian healthcare system.International journal of health economics and management,24(1), pp.33-56.
- Parliament of Australia, 2024, Private health insurance rebate. [online] <https://www.aph.gov.au/~/media/wopapub/senate/committee/medicare_ctte/fairer_medicare/report/c11_pdf.ashx> [Accessed 5 Aug. 2024].
- Royal Australian College for General Practitioners, 2023, newsGP - Is the number of GP consultations going down? [online] NewsGP. <https://www1.racgp.org.au/newsgp/professional/is-the-number-of-gp-consultations-going-down>[Accessed 5 Aug. 2024].
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