How easy is it to get proper, timely and effective health care in relation to financial capacity of an individual living in Australia? The Australian healthcare system provides universal population coverage through Medicare reforms which started in 1984 and its aim was to provide a health insurance system which is simple, fair, and affordable. The National Health and Hospitals Reforms, in 2009, discovered an alarming situation where it was found that low income people were facing serious financial difficulty to access health care services as compared to high income groups, leading to fear of a dual health caring system yielding in Australia, under which underprivileged group who could not afford private health insurance were falling behind in getting timely medical services.

Massive amount of out-of-pocket payments are made by citizens to get full heath care. The Australian Institute of Health and Welfare (AIHW) in 2010-11 estimated $24.3 billion in health spending directly comes from the pockets of consumers, which is almost $1,100 per person. Australia’s out-of-pocket spending was about two times higher than the United Kingdom and New Zealand.

Out-of-pocket payments means that low income people do not access needed health care and many experience significant financial difficulties in paying for health services. People with chronic conditions or long-term health care requirements, often hesitate to get medical help believing that it might put financial pressure on low income segment of the society. Due to lack of state benefits offered, particularly for dental treatment and also difficult requirements for cost sharing, people are forced to pay high out of pocket costs.

Although, health care in public hospitals is fully covered by public health fund, users still need co-payments for many other services and for health care services from private hospitals. Other services which have shown alarming increase in gap payments or out of pocket payments over recent years; include GP visits, medical specialist care fee, dental care, and prescription drugs.

Another segment which is contributing hugely to rising out of pocket payments is assistive technology (AT) for disabled individuals. Many countries have failed to give access to assistive technology in the public sector so far. Paradoxically, in high-income countries, AT products are often barred or sometimes even not included within health and welfare schemes, which leads to huge out-of-pocket payments by users. The AT industry is currently highly specialized and hence primarily serving high-income segments of the market. Due to lack of state funding, efficient service delivery systems, and research and development, proper procurement systems, quality standards, product design and safety, assistive technology is still out of reach of lower income groups. In high-income countries disability related services are often stand-alone and segregated. Patients are compelled to attend numerous appointments at different venues, which are costly and increase burden on them as well as caregivers, and on health and welfare budgets.

According to report published by Commonwealth of Australia in 2014, pre-service gap payment for GPs increased from $AUD 11.8 in 2005 to $AUD 29.56 in 2014 which was 2.5 fold increase. Australian Institute of Health and Welfare (AIHW), in its report published in 2019, stated that approximately 6.7 million people visited public hospitals while around 4.5 million visited private hospitals in 2017-2018, which was 3.8% more than the figures in 2013-2014.

Australian government is encouraging people to purchase private health insurance by offering very strong incentives, and almost half of the population is doing so. Private health insurance helps people by covering the higher charges of private hospitals, and hence helping reduce co-payments for other services. Medicare provides about 80% of general practitioner, pathology and imaging services ‘free’ through its bulk-billing system, still people with serious health conditions often need services that are not funded by Medicare, such as medical aids, appliances, and post treatment care services. Similarly, very expensive dental care services which are particularly not affordable for low income people, its exclusion from Medicare is also implementing negative consequences on dental and general health.

While people with private health insurance can go to private hospitals, public patients are facing continuing problems getting significant elective surgeries since specialists are rapidly moving to private hospitals. This is causing dramatic increase in out-of-pocket expenses for public patients.

The Australian Council of Social Service (ACOSS) expressed concern about proposals to allow private health insurance become part of primary healthcare system stating that, while consumers bear the right to access any model of health care, and have choice of selecting any provider and practitioner, it is concerning that this model promotes private health insurance as a way ‘to jump the queue’ and to access timely health care. All Australians should get equal opportunity to access the health care they need, at the time they need, without any discrimination.

Further, ACOSS showed particular concern regarding proposals to allow private health insurance work its way into primary healthcare stating that this will encourage the emergence of a dual health system, where those with good financial status are able to access the care they need without any delays or long waiting queues, leaving those without private health insurance helpless for accessing appropriate care.

Removing out of pocket payments from the health care system may or may not be a good thing to do since it requires a lot of thought before taking any such step. Out of pocket costs for sure are a burden on public but also shares financial load on the state allowing it to manage financial budgeting for other sectors. Australian constitution allows doctors to charge anything directly to the patients if they feel that government rebates are not enough for the services they are providing. Therefore, it requires constitutional change as a first step towards kicking gap/out of pocket payments, out of the system.

Government can address the ever building out of pocket payments issue by bringing a system which could shift direct payments from an individual to distributing it across the users collectively. Such system may not reduce the burden on individuals who are already paying taxes for getting Medicare and paying extra to get private health insurance on top, but it may divide the total cost across the whole society. This could be achieved by bringing reforms in Medicare and PBS (Pharmaceutical Benefit Scheme) and by changing what private health insurers are allowed to contribute. Many healthcare services which are critical for patients with chronic illness are not covered by Medicare. Allied health services are one of the best examples of health care, most of which are not covered by the Medicare. It is now necessary to re-evaluate and extend Medicare subsidies for such services and investigate its impact on demand from users and the cost to the government.

We need to see the process of treatment, from initial visit to GP for diagnosis, specialist consultation, surgery, aids and allied services needed to recover from disease, as a whole process rather than looking at these steps separately and develop funding models which could cover the costs of the whole process collectively. Combining all costs of treatment into single total in relation to an individual’s need and providing funding packages for complete treatment could be another step to mitigate this problem of huge out of pocket payments.

5 ways to cut down your out of pocket expenses for needed health care

  • Awareness: Identify providers that do not charge gap payments. As the first step you will take while seeking medical help is to visit a GP. You can reduce or even avoid out of pocket costs by choosing a GP who offers access to a gap cover scheme. Gap cover schemes can provide access to a list of all participating doctors/specialists and allows you to choose to be treated by someone who has agreed to charge either no gap or a very low gap payment. How much you pay in out of pocket expenses depends largely on where you live. It is a good idea to know about all the health care providers, be it hospitals or private GP clinics, and how much they charge for their services. Driving an extra mile or a couple does not hurt if you want to save big on out of pocket payments.
  • Be informed: there will usually be more than one doctor involved in your treatment if you are going to hospital. Always ask your specialists, and all doctors involved in your treatment, to give you a breakdown of all the costs which may incur during your treatment, preferably in writing. It is important to check what each part of the costs is for, so you know exactly what you’re paying for. This may not be possible in some situations, like medical emergencies. Still you should try to get this information, before jumping into treatment, where you could.
  • It’s not just the doctor’s fee you should be worried about since your medical expenses include various other costs related to you treatment, such as; costs of tests and scans associated with your treatment, fees charged by surgeons or other specialists like anesthetist,  hospital charges, and cost of prescribed drugs. It is important to know all the expected costs you might need to plan for.
  • Look at the treatment options: you can save a trip to the hospital and may be some money if you know your options for the condition you are in. Sometimes going to a hospital is not really required and you pay huge amounts for an unnecessary hospital visit. For example, there are often injuries which are not of serious nature and can be treated through therapies rather than a surgery. Your doctor can guide you about the treatment options only if you ask. Don’t be afraid to discuss you financial position with your GP and ask for all the options you might have.
  • Use different available funding schemes: there are many funding streams that you might look for such as health insurers or non-government health funding organizations. Private health insurers help you manage your healthcare expenses by providing a certain amount of cover and since this is a business in itself there are many cheaper private health insurance options available than the others. Look for the ones which offer more benefits for lower amounts charged to you. And of-course there are many international and local non-profit health funding organizations to help you out if you are eligible under their criteria.

It is hard to fix out of pocket expenses problem since there are many factors contributing to its fast growth. It might turn into crises if immediate actions are not taken.