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A new Perspective article in The Medical Journal of Australia says rising out-of-pocket costs are creating barriers to health care, putting Australia’s most vulnerable at risk.
There are concerns Australia’s most vulnerable, including people from socio-economically disadvantaged backgrounds and older Australians, are spending significant proportions of their incomes on out-of-pocket costs for health care.
In a Perspective article published today in The Medical Journal of Australia, University of Technology Sydney (UTS) Professor Emily Callander writes that half of Australians with certain health conditions avoid seeking health care due to the cost.
Professor Callander, who is the Head of Discipline, Health Services Management at the UTS School of Public Health, told InSight+ that one-third of low income households spend more than 10% of their income on health care.
Professor Callander also said there were significant issues regarding the market price of health care that results in higher out-of-pocket costs for low income Australians.
“Although privately provided care does create an important access opportunity, it only creates access for those that can afford it, leaving poor access opportunities to those that cannot afford it,” Professor Callander said.
How much is spent out of pocket?
Individuals spent an estimated $33.2 billion in out-of-pocket for health care in 2020–21.
This was 9.3% more than in 2019–20 in real terms.
However, the actual health spending by individuals was still below the ten-year trend before the coronavirus disease 2019 (COVID-19) pandemic (2008–09 to 2018–19).
In 2020–21, individuals spent an estimate of $11.4 billion on medications not subsidised through the Pharmaceutical Benefits Scheme, including over-the-counter medications, vitamins and health-related products.
Another $6.5 billion on both referred and unreferred medical services.
In the Perspective article, Professor Callander writes that Australia’s health care system relies on a mixture of privately and publicly funded health care.
She said while this is similar to countries such as New Zealand, France, Ireland, Germany, The Netherlands and the United Kingdom, the out-of-pocket cost of treatment is higher in Australia.
“In Australia, out-of-pocket fees make up a larger proportion of overall health expenditure than in these other countries,” said Professor Callander.
Professor Callander highlights the United States health care system, in which a reliance on private or market-based care has led to health care being the leading cause of bankruptcy, is a cause for concern.
“Horrible situation”
The Australian Council of Social Service recently surveyed people receiving JobSeeker and related income support payments and found that 99% said their inability to cover the cost of living affected their mental health.
“It’s quite a horrible situation for people to be in,” says Ms Crowe.
“There’s a high incidence of people having chronic ill health and receiving income support payments for unemployment,” said Ms Crowe. “We know that Australia’s JobSeeker payment is the lowest amongst wealthy countries. When you factor in housing support, [Australia is] right at the bottom,” says Ms Crowe.
Ms Crowe says that just over 40% of people on JobSeeker have a chronic illness or a disability that prevents them from working full time.
“Around half are aged 45 and over. That’s a substantial number of people receiving that payment who have a high likelihood of having poor health compared with other people in the community,” said Ms Crowe.
“To add to that, the fact that many don’t have enough money to eat results in a lot of people’s health spiralling,” said Ms Crowe.
Professor Callander says that solutions to the issue of providing affordable health care in Australia comes down to, among other issues, the conflict between the provision of universal health care and the ability of health care companies to make a profit from their services.
The article reports that profits for private specialists increased by 11% in the 2019–2020 period, and for general practitioners by a lesser 2%.
Professor Callander posits that solutions need to be investigated to improve the situation for all Australians. She believes that to allow local GPs to make a living, when appointment costs keep rising, the system is in need of reform.
“Doctors are providing care in a system with set funding rules and incentives. I think doctors play a crucial role in calling out the inequalities of the system they are operating in,” Professor Callander said.
“There is only so much a single private provider can do to keep fees low – if costs of operation are above income being generated, this means that fees have to increase. Which leads to the question, does it make sense that our primary care sector is subject to fee-for-service?” Professor Callander said.
“These are large-scale systems level issues that need to be addressed to ensure service viability and patient affordability.”
Ms Crowe says that an increase in income support payment would help.
“We’re continuing to call for the [federal] government to lift these payments to at least $76 a day, which would take it above the relative poverty line 50% of median income.
“This would help ensure people could cover basic costs, including health care.”
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