Australia has a unique healthcare system. On one side, we have our enshrined right to universal healthcare. No one in need can be turned away and everyone will be cared for—to an extent.
On the other side of this coin, we have a user-pays private system. Many choose to pay a private insurance company, or private-pay healthcare providers directly, to receive benefits like a choice of doctor or a private room or to jump over long waiting lists that can often exist in the public system.
Both systems have merit in their current state, as well as significant flaws. They also have the shared privilege of not being very patient-centric, both offering and compounding poor patient experiences.
Public and private healthcare systems are facing a crunch point. Due to some poor choices in implemented government legislation over several decades, both public and private systems need to look at ways to improve the patient experience before they head towards complete collapse.
Back in the year 2000, the government implemented a lifetime health cover loading (LHC) on private health insurance rates. This was done to encourage younger Australians to sign up for private health insurance early and to keep it longer. This is how the government explains loading on its website:
“If you have not taken out and maintained private patient hospital cover from the year you turn 31, you will pay a 2% LHC loading on top of your premium for every year you are aged over 30, if you decide to take out hospital cover later in life.”
In a practical example, someone born in 1979 who has not taken out private health insurance in their life might be up for an additional 20% loading in 2020, on top of a standard private health insurance quote.
This makes the barrier for entry into the private health insurance astronomical!
In addition, private health insurance companies have been increasing their fees at absurd rates for the past 20 years—an average rate of 5.35% each year. Compounding the numbers, this means that a family cover plan costing $180 per month in 2000 would cost over $530 per month in 2020.
And this cost is also before any LHC loading, which could possibly drive up the total to $636 per month for that person born in 1979.
This has caused a significant number of Australians to shun the private system, simply because they cannot afford to continue to pay any longer or the barrier to entry is too steep in the first place.
This makes the public health system the obvious and universal option. After all, the need for healthcare is only increasing with an ever-growing population.
With such a large influx of patients into the public healthcare system in Australia, general practitioners (GPs) and hospitals are feeling significant pressure. Waiting times for emergency rooms around the country are blowing out, bed availability in wards is at a significant low, and specialist procedure wait-lists are severely strained.
For example, a total knee replacement wait time in 2018 was, on average,193 days in length—even more for indigenous Australians at 251 days.
Imagine the patient’s experience—needing to have your knees replaced and then being told that you’ll have to wait over 6 months before something can be done to help you!
And this is before the surgery and necessary recovery and rehabilitation time. In all, these patients are looking at an entire year between first seeing their doctor to being put on the wait list to having a full recovery.
A terrifying experience, indeed, because it doesn’t count the significant trauma of the procedure itself!
And this is only one part of the problem. …There are plenty of issues with money.
Many doctors and public health providers have been crying for years about increases to their payments for providing health services. There is a significant gap between what doctors and public health providers get paid and what they bill.
This gap is picked up by the patients, leaving more and more Australians out-of-pocket at larger and larger rates, sometimes for services as simple as a regular GP visit.
Consecutive governments have resisted calls, time and time again, to increase public health expenditure, despite what they say in their own public sound bites. A small “playing with the margins” increase here and there has not addressed the increasing gaps in out-of-pocket costs for most Australians seeking health care services.