Health Care Funding System in Australia

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Health care funding system
Introduction
Research is undertaken by Price Water House Coopers Australia has shown that a
majority of the Australians want a responsive healthcare which is more accessible and offers
an affordable and effective quality of care, (PWC, 2017). Further, they need a health care
system which offers care to all members of the community irrespective of their location.
Moreover, health care that offers preventive care but nor merely illness is of high
significance. However numerous challenges are being faced. Most of the Australian
healthcare is largely federated, having different levels of government control. There are
system stewards which have incremental changes on the healthcare models.
Payment for Performance (P4P) or Safety and Quality pricing
Majority of Australians are covered by universal, tax-financed health insurance
schemes. Approximately 80% of the general practice often incurs out of pocket costs due to
the fact that the bill is usually directed to the government. Out of pockets, costs are usually
high, thus defer. All Australian have the eligibility to be treated in public hospitals without
any charges. Major medical centers are all public, with the state government’s act as system
managers.
States payments are done through activity based funding which allows performance
payment through setting the price of hospital care for each individual patient condition,
medication, and diagnosis, (Colais et al., 2013).
Under this model, the Australian government offers state costs to public hospitals under
this system. About 85% of government funding is channeled to States and Territories under
the system. The funding is done on the basis of prices which are reflected in national
Efficient Price (NEP) and Volume of hospital services.
Since the year 2016, Australian governments have ratified Heads agreement which
commits improvement of Australia healthcare outcomes and decrease public health hospital
services, (IHPA, 2018). Thus this allowed for pricing for safety and quality in a four-year
work program since 2016. Thus this model has largely been implemented across the
Australian health care system.
National efficient Price
Independent Hospital Pricing Authority uses NEP with activity-based funding for
funding public health hospitals. NEP utilizes two key purposes which determine the amount
of funding used in public health services and providing price signal benchmark in providing
efficient public hospitals costs.