President Trump's tweet on US healthcare stated that “Of course the Australians have better healthcare than we do- everybody does” (Picchi, 2017). President Trump tweeted on May 5, 2017, to seek support for the American Health Care Act (ACHA). The U.S. has the lowest life expectancy in comparison to other developed nations, and it also has the highest disease burden. According to the Peterson-Kaiser Health System Tracker, U.S. spends $8,745 per capita on health care in comparison to $3,997 per person in Australia. The US has the highest disease burden in contrast to Australia and Americans also have short life spans. The disparities in the healthcare system in America and U.S. are many, and they are responsible for the poor state of healthcare in the U.S. America has a responsibility to ensure coverage for all American citizens as most of the health challenges emanate from the lack of universal coverage.
Why Australia?
The comparative study compares the U.S. health care system with Australia’s because the Australian system has been ranked as one of the best in the world. Australia has universal health coverage (UHC) where everyone has access to quality health service. Australia has a two-tier health system where all citizens, permanent residents, and visa holders have access to high-quality free inpatient and outpatient care through Medicare. Australians still pay out of pocket to see specialists, and almost 60% of Australians choose to get a private cover to supplement the services offered by Medicare. Australia’s universal cover provides basic public health service for all Australians, something the U.S. government has failed to deliver. Obamacare was supposed to transform the U.S. healthcare by providing subsidies for health insurance for people in the low-income and middle-income bracket. Affordable Healthcare Act (ACA) remains controversial due to the lack of consensus between democrats and republicans. The US has to come up with universal health coverage to meet the health needs of its citizens and reduce costs. Thus, this comparative study explores the similarities and differences between the US and Australian healthcare system to identify lessons and recommendations to improve the US healthcare system.
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Similarities
Australian healthcare system has a component of a mixed market structure similar to the health care system in the US. Both the public and private sector providers fund the healthcare industries (Jones et al., 2011). About 60% of Australians rely on private insurance to meet the services that are not met by the government-funded universal coverage. Additionally, Australians also incur out of pocket expenses for certain health services.
The US healthcare system combines private and public insurance. According to the CDC (2017), 65% of Americans under the age of 65 have private insurance, while 53.8% of children under age 18 have insurances. 69.2% of adults between the age of 18 and 64 have insurance. 26.3% of Americans under the age of 65 rely on public insurance, in comparison to 43.0% of children under 18 relying on government insurance. Even with the availability of government-sponsored and private insurance, approximately 28 million Americans lack health insurance.
Both healthcare systems are funded through taxation. Nicholson et al. (2012) state that Australian government charges a 2% of the income of all Australian residents called the ‘Medicare levy’ used to fund the public health system. The US also relies on taxation to support the healthcare system. A bigger percentage of the US budget, approximately 17% is dedicated to healthcare in the U.S., which is higher than the OECD average of 11%.
In both the US and Australian healthcare systems, people have been complaining about the out-of-pocket costs. The costs in the private sector are escalating even in Australia due to the government Medicare rebate freeze. Health insurance premium keeps increasing, whereas government funding keeps declining. Australians are increasingly dissatisfied with the increased waiting time, fewer beds and the growing out of pocket expenses; these are also some of the problems experienced in the American health care system.
Lastly, another similarity is the inequities in the healthcare system. Australians from the upper socio-economic group are more likely to have better health care in comparison to the lower and middle-income groups. A study found out that the difference between the highest and lowest social classes is four years, with the rich having a lifespan of four years longer than the poor. The income-based disparities in healthcare are also very visible in the US with 38.2% of the poorest group reporting fair or poor health in comparison to 12.3% of the richest third group. The health disparity between the lower and upper-income groups is bigger in the US in contrast to Australia. Two-thirds of Americans report that ‘many’ of them cannot access healthcare. The number was 10% points higher in the US in comparison to other countries.
Differences
The main difference between US and Australian health system is the lack of universal coverage. The US health system does not provide universal public healthcare whereas Australian residents have access to Medicare, which is a state health cover paid through taxation. With Medicare, Australians do not have to worry about high monthly premiums and lack of cover. On the other hand, the US healthcare lacks universal coverage. Medicare and Medicaid cover low-income families and the elderly, and a majority of Americans who cannot afford health insurance are left out by the two programs. Approximately 60% of Americans rely solely on private insurance, in comparison to Australians who take out private insurance to supplement the government-sponsored insurance.
While the Australian government pays for free public health through Medicare, the government is actively trying to persuade citizens to take out private insurance policies to relive the pressure on the public system. High earners are taxed more for relying on Medicare, and they prefer to take out private insurance to avoid taxation. The cost of healthcare has been steadily rising, and the government is doing all it can to curb the costs.
According to Davey (2017), healthcare expenditure exceeded 10% of Australia’s GDP for the first time in 2015-2016 fiscal year. In 2016, the Australian government spends $170.4 billion on healthcare. States and territory governments contribute more than 70% of health expenditure. The government is trying to improve the efficiency of the system to prevent a spending and funding crisis. The US government is spending a lot on healthcare. According to the CDC (2017), the US spending on healthcare increased by 4.3% in 2016 to reach a record of $3.3 trillion or 17.9% of its GDP. The US has the highest healthcare spending of $10,348 per person in 2016.
Squires (2015) attempts to explain why the US healthcare system is expensive in comparison to other developed nations even when the US lacks universal coverage. The US healthcare system invests in inexpensive technologies such as magnetic resonance imaging (MRI) machines and CT scans. The US healthcare has also invested heavily in information technology such as electronic health records, in comparison to the low investment in technology in Australian health sector.
There are disparities on several key health outcome measures including life expectancy, mortality rates, and prevalence of chronic conditions. In 2014, the average Australian lifespan for women was 84.5 years and 80.4 for men in Australia. The leading cause of mortality in coronary heart disease and 2 out of 3 of the mortality rates occurred in the 75 and above age group. In the US, the leading cause of mortality in heart disease, followed by cancer and chronic respiratory diseases (Mokdad et al., 2015). Americans and Australians are struggling with specific risk factors such as poor diets, alcohol and drug abuse, tobacco use and high BMI that, and they are all risk factors for most serious conditions responsible for high mortality rates. Both Australia and America have experienced a decline in mortality rate since the mid-1990s.
Personal Opinion
Australian health system is impressive; it is universal, government-financed, and Medicare. The health system has important strengths and weaknesses discussed below:
1. More than 80% of GP visits in Australia do not incur out-of-pocket costs as Medicare covers the bill. Physicians have the freedom to charge whatever they like as there is no real cap on their fees, therefore Australians can visit the doctor without any fear of hefty out-of-pocket expenses. The Independent Hospital Pricing sets the national price for each type of care in public and private hospitals to enhance uniformity.
2. Australians qualify to be treated in public hospitals without charge, and major medical centers are public hospitals managed by the government. State governments play an active role in planning, regulation, funding, and governance; therefore all Australians can access the needed care in public hospitals without having to pay expensive rates to see the best doctors in private hospitals.
3. Australia also has a national Pharmaceutical Benefits Scheme providing subsidies to enable Australians to buy drugs they need regardless of the price (Duckett, 2017). There are co-payments for each prescription and lower copayments for individuals who are prescribed a lot of drugs.
Despite the many positive aspects of Australia’s healthcare system, the system has some shortcomings that need to be addressed. The weaknesses are discussed below:
1. The state of health for some groups in Australia is lamentable, particularly the Aboriginal and Torres Strait Islander people. The groups have a shorter life expectancy by a decade, and they do not have access to equal health services in comparison to non-indigenous Australians. The low-economic class also experience disparities in accessing health services in comparison to the middle and high-income groups.
2. The cost of copayment is too high for a significant number of Australians, and some of them opt out of getting the necessary health care because they cannot afford copayment. According to Duckett (2017), approximately 8% of Australians cannot get their prescriptions because they cannot afford copayment. With the increasing cases of chronic diseases, some Australians prefer not to visit the doctor because some aspects of chronic disease management are not subsidized.
3. The waiting lines for elective procedures in public hospitals are too long, with some patients waiting for more than a year to be called in for their elective procedures.
Propose a US Healthcare System
It is undeniable that the US healthcare system is a model of inefficiency in comparison to Australia’s system. American healthcare system is the most expensive in the world, and yet America performs poorly on quality measures such as life expectancy and mortality rates in comparison to other developed nations. The US healthcare system needs to change. Below are recommendations for improving the healthcare system:
1. Elimination of the fee-for-service system: The fee-for-service system reimburses physicians and hospitals on the services they perform rather than the quality of outcomes or appropriateness of services. Consequently, this has led to increased cost of healthcare, particularly for specialty services whereby the physicians are in high demand.
2. Address the underlying fragmentation in health care system. In Australia, state and commonwealth government manages health institutions to enhance uniformity in the form of service delivery, quality, and payment support (Russell & Dawda, 2014). In the US, the private sector insurance and private hospitals are not well regulated.
3. Enhance equity through the creation of an insurance program to meet the needs of the 46 million uninsured Americans. The biggest lesson from Australia’s health system is the importance of a universal plan; the plan ensures that everyone has access to healthcare services.
4. Lastly, the US healthcare system should attempt to reduce disparities. Disparities across racial and ethnic groups, social classes and geographic locations are rampant. Certain groups have access to the best health services, while others cannot access essential services.
Summary
In conclusion, the US healthcare is in desperate need of an overhaul. The analysis of the Australian healthcare system shows the benefits of universal coverage; and how nations with the best healthcare systems are managing their universal coverage. Managing a universal health system is challenging, but Australia has come up with policies and frameworks to support the system. The positive outcomes of the system continue to motivate the Australian government to improve efficiency and services provided under its Medicare program. The US must address some of the fundamental issues in the healthcare system such as fee-for-service, a high cost of care and fragmentation in the healthcare system before working towards creating a universal health program.
References
Davey, M. (2017, Oct. 5). Australia's healthcare spending rises above 10% of GDP for first time. The Guardian . Retrieved from: https://www.theguardian.com/australia- news/2017/oct/06/australias-healthcare-spending-rises-above-10-of-gdp-for-first-time
Duckett, S. (2017, Sept. 15). Australia’s health system is enviable, but there’s room for improvement. The Conversation. Retrieved from: https://theconversation.com/australias- health-system-is-enviable-but-theres-room-for-improvement-81332
Jones, P. D., Seoane, L., Deichmann Jr, R., & Kantrow, C. (2011). Differences and similarities in the practice of medicine between Australia and the United States of America: challenges and opportunities for The University of Queensland and the Ochsner Clinical School. The Ochsner Journal , 11 (3), 253-258.
Mokdad, A. H., Ballestros, K., Echko, M., Glenn, S., Olsen, H. E., Mullany, E., & Kasaeian, A. (2018). The state of US health, 1990-2016: burden of diseases, injuries, and risk factors among US states. Jama , 319 (14), 1444-1472.
Nicholson, C., Jackson, C. L., Marley, J. E., & Wells, R. (2012). The Australian experiment: how primary health care organizations supported the evolution of a primary health care system. The Journal of the American Board of Family Medicine , 25 (Suppl 1), S18-S26.
Picchi, A. (2017, May 6). Trump says Australia's health care beats the U.S.'s: He's right. CBS News. Retrieved from: https://www.cbsnews.com/news/trump-says-australias-health- care-beats-the-us-hes-right/
Russell, L., & Dawda, P. (2014). Lessons for the Australian healthcare system from the Berwick report. Australian Health Review , 38 (1), 106-108.
Squires, D., & Anderson, C. (2015). US health care from a global perspective: spending, use of services, prices, and health in 13 countries. The Commonwealth Fund , 15 , 1-16.
