Critical Analysis: Healthcare Financing Policy in Australia

This report provides a critical evaluation of Australia's healthcare financing policy, examining its formulation and implementation processes. It identifies key stakeholders, their interests, and influence, while also assessing the evidence used in prioritizing healthcare issues. The report analyzes the policy type, instruments, and initiatives adopted, evaluating the implementation planning process against relevant frameworks. Furthermore, it assesses the policy's impact on intended objectives, drawing on evaluation findings and comparative evidence. The analysis identifies policy strengths and weaknesses, providing insights for future policy iterations, and it highlights the roles of Medicare, general taxation, and health insurance plans in funding the Australian healthcare system. The report concludes by discussing the challenges faced and the need for continuous improvement in healthcare financing to ensure equitable access and quality services.

Running head: CRITICAL EVALUATION OF HEALTH POLICY 1
CRITICAL EVALUATION OF A HEALTH CARE FINANCING POLICY
Student’s Name
Professor’s Name
Institution of affiliation
Date

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Introduction
Australia healthcare sector has been recognised for a very long time as being the most
outstanding and offers health care services of high quality. Its organisation, management and
leadership are of high quality which makes it possible to cater to the needs of the people there.
Nevertheless, it has faced some challenges as a result of changes occurring in the health sector
regarding requirements like the proliferation of demand and rise of healthcare expenditures.
Additionally, the pressure to advance the outcomes and inequalities are the major problem today.
This healthcare is also having difficulties in enrolling adequate workforce as well as inefficacies.
The state and territory governments have got the mandate to formulate policies for the
providence of healthcare services in hospitals and also, regulate, inspect, license as well as
monitoring of all health sectors, institution and individuals within their authorities. The main
target of Australia, health care system, is to ensure that all people get equal access to services
and allows people to access even private health services via substantial engagement of private
healthcare system in provision and financing. It is clear that the financing system of Australia is
the tax-oriented system. This means that the health care is financed by the general government
expenditure.
The government of Australia have developed so many policies concerning the health
system to ensure that they solve the problems affecting this sector. This paper will look at the
health care financing policy starting with its formulation process, stakeholders of this policy and
their interest, implementation process up to the evaluation stage(Meurk, Leung, Hall, Head, &
Whiteford, 2016). Furthermore, we shall discuss all sectors that are involved in the funding of
Australia healthcare system that includes public health insurance.
Overview of the health care system in Australia

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Australian constitution is not so strict about the roles that are assigned to the varied
categories of government regarding health care financing(Davis, Stremikis, Squires, & Schoen,
2014). Due to this reason, the government has arranged Australian ministry of health to have
conferences where health ministers representing different levels of government come together to
discuss and come up with health policies as well as programs concerning matters of health care.
Generally, the health department together with the Commonwealth government is accountable to
all the policy made and all matters regarding health(Healy & Sharman, 2006). Specifically, it has
got the mandate to control the issues concerning financing schemes like pharmaceutical benefits
schedule and Medicare benefits schedule nationally.
Stakeholders of health care financing policy
There were many stakeholders consulted during the development of health care financing
policy such as college representatives who were about ten from the specialist sample(Nolte,
Knai, & McKee, 2008). Also, there were several jurisdictions representatives, the Australian
private hospital association, and the medical indemnity insurers association of Australia, the
Australian medical association, the Australian health insurance association, public hospital health
area administrators as well as multiple private hospitals involved in specialist coaching. In
addition, all the matters discussed was also shared with several senior doctors who were so much
involved in factors of medical training. Many of the sessions were supervised by PwC, and the
departmental representative was supposed to be present. The minimal consultation was done by
DoHA for logistical explanations(Weiner, 2005). The medical specialist training directing
committee was in charge of organising the setting where the discussions were to be held. They
also outlined the places that needed to be enlarged, and during consultations, these places were
confirmed and then categorised into four groups which include private hospitals, community

CRITICAL EVALUATION OF HEALTH POLICY 4
setting, rural and regional hospitals and private counselling practice. A common agreement from
the stakeholders was that all the trainees were to take training in the environments that they were
to practice their skills or come across as they work in medical sector(Shigayeva, Atun, McKee,
& Coker, 2010). Nevertheless, so many ideas were brought forward regarding the range of
amending of the training programs to cater for this aim. All who were included in consultations
also displayed the need for maximising financing of the specialist training, and even they were
concerned about the health professional’s supply outside the main capital cities.
Interest and views of the stakeholders
They were much concerned with the matters of the provision of specialist services to
remote and rural areas as well as the overall professional’s conditions like pathology,
rehabilitative medicine and psychiatry were the major areas of concern to them. In addition, most
of the opinions given throughout the consultation period were about the medication of the patient
by trainees and patient consent(Schoen & Doty, 2004). They raised the concerns about the
services that patients get and the insurance cover that is used by so many individuals when
seeking health care both in public and private health sector.
Health care financing policy formulation
The Commonwealth is responsible for financing the following areas like aged care,
pharmaceutical health benefits, the public hospitals, and the medical benefits(Saltman, Rico, &
Boerma, 2006). This policy touches on very broad areas since the financing of Australia
comprises of so many parts that include the tax, insurance, money from the pockets of the
patients as well as donations from the charity organisations or individuals(Mckee & Healy,
2002). In this policy, so many ways were devised on how financing will be carried out, and the

CRITICAL EVALUATION OF HEALTH POLICY 5
method of collecting the funds to cater for the health needs of the people and the facilities need
for the running of the health sectors. Three ways of collecting funds were proposed with different
responsibilities allocated to them(Zikmund, 2003). They include general taxation method,
through Medicare levy and via health insurance plans. Let discuss each one of them.
Medicare tax. This Medicare tax was made a must with the aim of providing support to
the Commonwealth government so that it can be able to meet the duty of provision of universal
health care services to all individuals(Cabral & Mahoney, 2013). This is because there were
additional costs that were increasing each and then that it could not be in a position to cater to all
patient. Australian taxation officers are responsible for collecting the Medicare tax which began
from one per cent of taxable income and went on rising to about one point five later. However,
all the families with low income and the individuals are included in the payment of this tax
through the process of income imposition thresholds. All individuals earning less than
AUS$15,902 are exempted from paying of the Medicare levy(Stavrunova & Yerokhin, 2014).
Families and individuals who get high salaries have got an added Medicare tax of one per cent.
General taxation. This entails a wide range of groups that pay taxes depending on the
kind of business they do. All individuals who participate in the specified areas like industries and
companies and generally all areas that pertain using of the government resources and
grounds(Jackson, 2006). Research shows that about seventy-five per cent of the funds come from
the general taxes collected annually. Hence general revenue comes from all these varied sectors
of taxing.
Health insurance plans. The primary controlling agency of private health insurance is
the private health insurance administrative council which is an independent statutory sector in
Australia (Einav, Finkelstthe in, & Cullen, 2010). Therefore, any institution wishing to use the

CRITICAL EVALUATION OF HEALTH POLICY 6
insurance services in Australia is supposed to consult the requirement of this council and ensure
that it is registered by it. Also, this council also control and monitors all the financial operations
of health insurance money that are given by the health insurance companies to ensure that every
need regarding the funds in the health sector is met and also enough to provide quality
healthcare(Handel & Kolstad, 2015). Recently there are about forty companies that are dealing
with insurance services in the sector of health. The Commonwealth government inspires
individuals to apply for the private health insurances to help them cater to the bills of medical
services.
Three pillars of health financing policy.
We have three pillars which include access to care, cost savings and prevention also
called patient-centered care (Ataguba & McIntyre, 2012). Let look at each one of them in details
beginning with access to care which encompasses health provision to the Patient who needs
treatment. All therapies developed are considered to be of no help if they were not going to help
the patient. The main thing in this pillar is to ensure that there are proper medication and
adherence to the quality health provision. This is one of the major things that was considered
during the formulation of health care financing policy because they aim was to ensure that health
care is accessible and assisting who are in need all the time. The other pillar is the cost saving
pillar which mainly addresses the issue of rendering health services to every whether adult or
child and that everybody should access it even if one has the money for treatment or not. This
pillar considers the patient who has less income and would prefer not to seek medication before
putting food on the table. It will also research on strategies that can be followed to ensure that the
care prices for every family are reduced. The third pillar is prevention also known as patient-
centred care. This pillar aims at devising ways through which frequent patient visits the hospital

CRITICAL EVALUATION OF HEALTH POLICY 7
rooms could be minimised through proper education to the people to practice prevention measure
to infection (Normand & Thomas, 2008). This could reduce the financial the trains to cater for
medication.
Assessment of health care financing policy
The research done concerning the policy process shows that the stakeholders’ decision
and political agreements are the ones that determine the success of the policy implementation.
The government had an authority of controlling this health care financing policy. Some of the
challenges they face were stakeholders’ absenteeism as well as lack of communication plan to
facilitate achievement of the health care financing policy (Busse & Blumel, 2014). In addition,
the management strategy is also the major elements that affected this policy.
Instruments of health care financing policy
Health care financing as got five primary instrument which includes societal health
insurance, community- based health insurance, private out of the pocket instrument, government
financing, as well as private health insurance (Atun, Weil, Eang, & Mwakyusa, 2010). This is the
major instrument that was being involved in the policy of funding the health sectors. Social
insurance and private insurance are the major sources of money in this policy.
Need for the formulation of health care financing policy
This policy was mainly established due to the challenges that are facing the health sector,
and the government struggles to cater to all the needs of people who require health services
(Ataguba & McIntyre, 2012). The budget or funds that were set aside by the government for
health was not adequate to cater to all the areas in health. Some of the major reasons are:

CRITICAL EVALUATION OF HEALTH POLICY 8
Low-quality health services: the health services offered decline because the facilities
required were insufficient and that universal health services that they aim to render could not be
possible to achieve. Medicare is one of the agents that the government uses to finance the health
sector, but challenges increased in the number of individuals in need of health services (Kutzin,
2013). Initially, the Medicare used to offer free medical services, but as time passed, it was
unable to.
High level of use of pocket money to pay health services. Most of the people were used
to paying health services using direct cash especially those who have the ability to go to private
health sectors. This policy objective was to come with strategies that could help people to get
insurance cards whether in the private or public sector. Insurance can help even in times when an
individual has no money or needs emergency health services and not prepared financially.
Need to retain health professional. Most of the health professionals tend to move in
countries that pay them well for the services they make. If they are not given a good salary, they
fly to other countries and the country is left with an inadequate health specialist. This is a
disadvantage because people will be forced to go outside county to seek quality health services
which is even more expensive(Wagstaff & van Doorslaer, 2000). This policy puts into
consideration all these factors to ensure that they prevent a condition like this to happen.
Universal health care. The main focus of Australian health ministry is to offer equal and
quality health services to all citizens despite the social status and ability to pay. This policy
allows even the lower class people to receive health services because it provides incentives to the
health sectors(Knaul et al., 2012). All the money collected using the required means should like
taxation is organised and budgeted to health sector accordingly.

CRITICAL EVALUATION OF HEALTH POLICY 9
To reduce donor dependency. The government had a plan to create a health system that
is self-sustainable. Though donations are not bad for a country, it is better to have a self-
sustaining financing mechanism. Health financing policy aims at ensuring a continuous flow of
money and resources need in the health sector as well as keep on advancing accordingly, with
the change in it,etc., technology(Blaya, Fraser, & Holt, 2010).
Priorities of health care financing policy
The policy has several priorities some options were considered during it establishment:
(Schieber, Gottret, Fleisher, & Leive, 2007).
 Advancing the efficiency and equity of public expenditure through diverse mechanisms,
comprising public-private partnerships and best focusing on beneficiaries of public
financing.
 Conserving more sustainable outside financing for defined purposes.
 Discovering ways to organise domestic resources via taxation and prepayment
mechanism to provide defined health care services to all people.
 Taming risk pooling via health funding schemes that involve social health insurance.
 Enlightening support efficiency and re-aligning of current resources to certify that
allocations equal health priorities and goals.
Components of health care financing policy in Australia
The policy has got about three components that it aims to achieve that is vision, goal or
purpose and its capabilities(Akazili, Garshong, Aikins, Gyapong, & McIntyre, 2012) Let us
analyse each one of them:
Vision. Better health and wellbeing for all Australians, now and for future generations.

CRITICAL EVALUATION OF HEALTH POLICY 10
Goal or purpose. The prompt movement toward universal coverage via rising adequate
finance the and advancing effectiveness and equality. Also, to lead and figure Australia’s
healthcare sector and noticing outcomes via evidence-oriented policy, well-focused programs as
well as outstanding service guideline.
Capabilities the policy. The best management of cost and investing in long time
sustainability, enhance leadership at different levels as well as building strong interactions.
Implementation of the health care financing policy
The policy implementation process involved many strategies that entailed the allocation
of duties to the various department to ensure that all health sector matters are sorted out
effectively. Australia government is divided into different categories, and in each category a duty
to control funding and overall running of a particular branch in health were allocated(Ekman,
2004). The initial focus of the government health care financing policy is to set national health
policies besides providing subsidies in health services offered by the state as well as territory
governments including also private organisations. The federal government is in charge of
financing several sectors such as pharmaceuticals, providing guidance in policy, financing
universal medical services, controlling and funding the public hospitals and helping in paying of
the health services for the elderly(Ataguba & McIntyre, 2012). According to this policy, the
government also has got the mandate to monitor therapeutic goods and services as well as
pharmaceutical operations.
Similarly, controls the supply of funds to those branches to ensure that there is smooth
running of the health services needed. Medicare in this policy aims to advance equity of
accessing health care services in that equality in health services is enhanced. The fund's

CRITICAL EVALUATION OF HEALTH POLICY 11
collection program form taxation in diverse organisations was planned and approved and started
working during that time(Schmid, Cacace, Götze, & Rothgang, 2010). Since out-of-pocket
spending is the major often used the method of making payment for the services of health, this
policy aims at eliminating it at all cost through coming up with insurance services. Taxation is
one of the main sources of funds it is as well supported by insurances benefits. We have several
types of insurance like private insurance, social insurance and many others aided by the general
taxation(Hsiao, 2007). This helps the government to get several sources for health care.
Frameworks of implementation of health care policy
The implementation of diverse roles of health financing policy influences the
performance of the health system to attain the task of providing universal health benefit goals.
The role involves raising of revenue, funds pooling as well as buying of services and benefits
package design(Levac, Colquhoun, & O’Brien, 2010). Reforms and establishment of health care
financing policy targets on the roles mentioned above. This healthcare financing policy links
with other areas of the health sector specifically delivery(Kamuzora & Gilson, 2007). Below is a
framework of how health benefit shall be awarded to the citizens based on social statuses.
Framework
The percentage of groups by
income level
Higher income individuals Well-off
Tax-financed public health
care with beneficiaries’ fee
schemes coverage.

CRITICAL EVALUATION OF HEALTH POLICY 12
Complimentary private
coverage
Social transfer
Official sector
Tax-financed civic health
care with beneficiaries’ SHI
coverage
Informal part (uneven
salary).
Tax-financed civic health
care with user fee schemes
CBHI coverage
Gradual moves to SHI
Lower income individuals Poor.
Tax-funded public health care
with user fee schemes HEF
and other subsidisations.

CRITICAL EVALUATION OF HEALTH POLICY 13
Adherence with the planning process of health care financing policy
One of the aims of this policy was to increase accessibility to civic health
services for all, particularly people who are poor and also to minimise catastrophic spending for
the health. This target was achieved via regulation of usage of fees at public
facilities(Sekabaraga, Diop, & Soucat, 2011). Furthermore, implementing nationwide
identification of poverty, discover other financing mechanisms to eliminate debts about
healthcare like microfinance initiatives and cash transfers transactions. Extension of availability
of community health protection systems to every family countrywide. Another focus for this
policy was to establish social health insurance coverage of all the employed individuals either in
public or private organisations (Moat & Lavis, 2013). The plan followed to achieve this goal are
the development of mandatory health insurance for a public servant and private organisation
employed workers. In addition to ensuring that there is a suitable design for compulsory
insurance schemes in order to attain the goals of health organisation as well as its priorities.
Evaluation of health care financing policy
Inclusive health financing information on every source and utilisation of
financing health as well as details on speeding of health intervention are the preferred results in
the policy. The health ministry monitoring and evaluating the health system focus on this
particular outcome. There is a strengthening of information gathering based on the donor's
contribution reports, reports base on a payment that is made using the out-of-pocket money, the
establishment of accounts for health operation and other types of spending tracking tools(Moore
et al., 2015). Since the development of health care financing policy, mortality that occurs due to
lack of proper health care has reduced, and there is need to give an applause stakeholder of this
policy and the ones supervising it up to this stage.

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Strengths of health care financing policy
From the time when health care financing policy was developed several
areas that were having in accessing quality health care like rural and remote areas have benefited
a lot. This policy ensured that incentive is an offer to every person willing to work in rural and
remote areas like scholarships. Additionally, medical students enrolling to study for practising
their career in those areas are given scholarships. Another benefit if this policy is the provision of
quality and equal health care services to all individuals regardless of their social status. Health
insurance system has been the most convenient way of dealing with issues about costs of health.
Weaknesses of health care the financing policy
The only weakness of this policy is funds mismanagement sometimes and
delay in disbursing the funds needed to cater for specific things in the health sector. Such delays
lead to poor health service delivery to the patient in need of that service. Also, the government
sometimes may tend to over tax individuals too much only for this health system which seem
like a disadvantage mostly to the employed personnel.
Conclusion
Health care financing policy is one among the policies of health
formulated by the government to help the health ministry perform its duties effectively. This
essay has outlined in a more detailed manner the process of formulation of this policy. It has also
highlighted key issues such as the stakeholders of the policy, the need for the policy as well as
the priorities of health care financing policy. Moreover, the components of this policy like a
vision statement, its goals and capabilities statements have been stated in this essay. Three pillars

CRITICAL EVALUATION OF HEALTH POLICY 15
of this policy have been discussed, the implementation process and assessments of the policy as
well as a comprehensive framework of health benefits allocation based on social levels of
people. The last part is the strengths and weaknesses of the policy discussion. I recommend that
the government establish strong groups of people to deal with the financing sector of the health
system as well as ensuring that the health professionals work under stress-free environment. The
salary for the health professionals should be at a proper amount to keep them comfortable and
motivated to work. With all this put into practice, Australia will continue advancing and
providing the best health care in the world. Both private and public healthcare sectors have got
the mandate of ensuring that health goals are attained.
,

CRITICAL EVALUATION OF HEALTH POLICY 16
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