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Health Care Systems Reform in Insurance vs Tax based System Australia

Health Care Systems Reform in Insurance vs Tax based System Australia

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Health Care Systems Reform in Insurance vs Tax based System Australia

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  1. Health Care Systems Reform in Insurance vs Tax based SystemAustralia Florence Kwan Janice Yim Nora Kwok Molin Lin Rita Mak

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

  3. Hospital Funding Model

  4. INITIATIVE Casemix funding

  5. 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.

  6. 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

  7. Hospital funding • Inefficient and inequitable • output based funding system

  8. 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

  9. 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

  10. 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

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

  12. 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

  13. 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

  14. 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

  15. Casemix Funding Model State: Victoria • Hospital Funding = fixed + variable grant

  16. Victoria Casemix funding model • Fixed grant: to cover hospital overhead costs • Variable: • based on the payment units of the DRG system

  17. Private Health Insurance - Background Coverage : Provides choice of doctor, hospital, timing of procedure Scope of coverage > Medicare eg. Dental, optical, physiotherapy and podiatry Premium : Community rate – everyone the same, regardless of health status, claims history, age

  18. Private Health Insurance - initiatives Lifetime Health Cover : Replaced community rate in 2000.Join the PHI < 30 years of age and stay in PHI : pay a lower premium throughout their lives. People > 30 pay 2% more every year delay. Discourage “hit and run” behavior. Overall claim rate ↓

  19. Private Health Insurance - initiatives 30% rebate : • Subsidy of 30% for all PHI fund members by Government in 1999

  20. 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

  21. 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

  22. 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)

  23. Increase co-payment : Pharmaceutical Benefits Scheme (PBS) - Initiatives

  24. Threshold Adjustment : Pharmaceutical Benefits Scheme (PBS) - Initiatives

  25. 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

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

  27. 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

  28. Medicare: Initiatives (Bulk Billing) What is so good about bulk billing? • No co-payment for patients -> no cost-shifting to patients • Minimize govt. administration fee • No costs shifting to the state

  29. Medicare: Initiatives (Bulk billing)

  30. 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

  31. 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

  32. 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

  33. 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)

  34. What major problems they are facing ? • Shortage of healthcare workforce - Growth of demand for medical services - Ageing workforce (31% of the workforce is aged <35 yrs ; 12% is aged >55 or above) - Changes in participation (as measured by hours worked per week) (~34% of workforce is part-time, with 38.6% working < 35 hours/week)

  35. 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 -> Substitution • Workforce PlanningAlign education and training supply Australia and New Zealand Health Policy 2005, 2:14

  36. 27June2005 (www.healthworkforce.health.nsw.gov.au)

  37. 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 Services:GP are on call much more GP providing hospital-based services and emergency medicine

  38. 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

  39. 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. 169:S17-S21 • Casemix Funding for Acute Hospital Care in Victoria, Australia in http://www.health.vic.gov.au/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