NCPA - National Center for Policy Analysis

Health Care Rationing Is Increasing In Australia

May 5, 1999

Health care rationing through hospital waiting lists is increasing in Australia, says Steven Schwartz. And public patients can't get many of the drugs available in the U.S. and Europe.

According to a January 1999 report by the Perth Metropolitan Health Services Board:

  • The majority of seriously ill patients in West Australian public hospitals were not operated on within accepted benchmark times.
  • More than half the patients wait two months or longer for their operations, while some wait a year or more -- and there are similar waits across the nation.
  • Many of those kept waiting for months are Category 1 patients whose surgeons say it is necessary for the operation to be performed within 30 days.

Today, government pays about 70 percent of all health care costs and private insurance pays another 13 percent.

  • When Medicare, Australia's publicly funded health system, was introduced in 1985, about half the population had private health insurance.
  • By 1997, the privately insured rate had fallen to only 32 percent; by the end of 1998 it had fallen to around 30 percent.
  • Insurers are required to charge all policyholders the same "community-rated" premium -- which attracts sicker policyholders and raises costs, encouraging the healthy to drop coverage.

Australia spends 8.5 percent of gross domestic product on health care -- exactly the average for countries in the Organization for Economic Cooperation and Development, omitting the United States -- but costs are likely to rise, says Schwartz. For example, expenditures under the public drug benefit plan have doubled in the past six years, from AUS$1.5 billion to $3 billion.

Source: Steven Schwartz (Murdoch University), "Saving Australia's Health Care System: Nostrums or Cures?" Policy, Autumn 1999, Center for Independent Studies, 38 Oxley Street, St. Leonards, NSW 2065 Australia, (02) 94384377.


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