Funding of Australian health care services consists of general revenue from tax payers notably the Medicare levy, private health insurers, third party funds and out of pocket payments. In 2009-10 funding was divided up between 43.6 percent from Australian Federal government, 26.3 percent State, Territory and Local governments, 17.5 percent individual out of pocket payments, 7.6 percent from private health insurance and the remaining 5 percent from third party providers such as worker’s compensation and motor vehicle insurance (Australian Institude of Health and Welfare, 2012).
Although the Medicare levy has increased from 1 percent in 1984 to 1.5 percent in 2012, generally the Australian Federal governments funding has decreased from 44.4 percent in 2000-01 to 42 percent in 2006-007. The State, Territory and Local governments have slightly increased from 2001-02 at 23.2 percent to 26.3 percent in 2009-10. However, out of pocket costs to the consumer have risen from 2.4 percent to 2.8 percent over 10 years. This expenditure in 2009 of 17.5 percent was more excessive that the median of 15.8 percent for developed countries (Australian Institute of Health and Welfare, 2011).
To determine the factors that have led to this outcome we must look closely and assess the costs. While Australia has universal health care which is driven by the Federal government to negotiate prices for services, the United States health coverage is broken into many divisions. With countless private and public sources for consumers to weigh between, a majority of these companies are profit driven which allows costs to reach sky high limits.
1. Unlike Australia’s universal health care which is funded from general revenue, the United States has a more complicated funding design. Health care coverage consists of 53 percent of the population privately insured, 32 percent funded by public tax revenue and the other 15 percent have no coverage at all (The Commonwealth Fund, 2012). As a result this 15 percent have to pay the full cost of their medical expenses which they usually cannot afford. Leaving private medical organisations (54 percent) and government (46 percent) left to recoup these deficits. This debt is then left to the rest of the population to cover, meaning they end up paying higher costs to cover the short fall (World Health Organization, 2014).
2. The United States has a highly volatile health care system which includes many privately employed doctors who charge a fee for service. The autonomy of doctors’ fees are not regulated by any government regulations, with an average price of $95 per visit (International Federation of Health Plans, 2014). Although some of the costs are covered by insurance the rest comprises of co-payments for physician visits (The Commonwealth Fund, 2012). This could explain why the OECD outlines a mean of 6.5 visits per year for doctor consultations which is on par with Australia, yet the United States only reports an average...