Health care in Australia: range and types of health facilities and services, responsibility for health facilities and services, equity of access to health facilities and services, health care expenditure versus expenditure on early intervention and prevention, impact of emerging new treatments and technologies on health care, health insurance: Medicare and private

Australia spends roughly $240 billion a year on health, or roughly 10% of GDP. The Australian health system is a mixed public-private system, with Medicare as the universal scaffolding and private health insurance as an optional layer on top. This dot point covers how it is funded, who runs what, and where the equity gaps still sit.

Responsibility for the system

Responsibility is split across federal, state and territory, and local government, which is part of why the system feels fragmented from the patient's perspective.

Federal government runs Medicare (the Medicare Benefits Schedule for GP and specialist visits, the Pharmaceutical Benefits Scheme for medicines), private health insurance regulation and rebates, and national policy frameworks. Funded primarily through the Medicare Levy (currently 2% of taxable income for most earners) and general tax revenue.

State and territory governments run public hospitals, ambulance services, community health centres, mental health services, and public health programs. Funded through a mix of state revenue and federal health grants (the National Health Reform Agreement).

Local government runs immunisation programs, food safety inspections, environmental health (sewage, drinking water locally), and many community-level health promotion programs.

Range and types of facilities

The syllabus expects you to know the main categories.

• Public hospitals. Free for Medicare-eligible patients. State-run. Roughly 700 across Australia (AIHW).
• Private hospitals. Charged at private rates, claimable through private health insurance. Often used for elective surgery to avoid public waiting lists.
• GPs and primary care. Most are private businesses; bulk-billed visits cost the patient nothing. Roughly 1.7 GP visits per Australian per year on average, more for chronic disease patients.
• Community health centres. State-funded multidisciplinary services (allied health, mental health, drug and alcohol).
• Aboriginal Community Controlled Health Organisations (ACCHOs). Community-owned primary care for Aboriginal and Torres Strait Islander Australians.
• Aged care facilities. Mixed public, private and not-for-profit. Federal funding under the Aged Care Act.
• Allied health (physiotherapy, dietetics, psychology, etc). Private businesses; Medicare partially covers some via Chronic Disease Management Plans, the Better Access mental health initiative, and other targeted programs.

How it is funded: Medicare

Medicare is the universal public health insurance scheme, introduced in its current form in 1984. It guarantees access to a public hospital and subsidises a list of GP, specialist, and allied health services through the Medicare Benefits Schedule (MBS).

Funding for Medicare comes from:

1. The Medicare Levy - 2% of taxable income for most earners (lower for low-income earners, exempt below a threshold).
2. The Medicare Levy Surcharge - an additional 1-1.5% for higher earners who do not have appropriate private hospital cover.
3. General tax revenue - the bulk of total Medicare funding.

What Medicare does NOT cover. Dental for adults (mostly), most allied health beyond the limited Chronic Disease Management items, optical, hearing aids, ambulance in most states (Queensland and Tasmania have free ambulance; others charge unless you have private insurance).

These gaps are where equity of access concerns concentrate.

Private health insurance

Private health insurance lets you claim costs for treatment in a private hospital (hospital cover) and for ancillaries (extras cover: dental, optical, physio, etc).

The federal government supports private health insurance through:

• The Private Health Insurance Rebate - a subsidy on premiums, means-tested by income.
• Lifetime Health Cover loading - extra premiums for people who take out private hospital cover after age 31.
• The Medicare Levy Surcharge - effectively an incentive to take out private cover for higher earners.

Approximately 45% of Australians hold private hospital cover and 54% hold extras cover (APRA 2024). The proportion has been slowly declining among younger Australians, who increasingly judge the rebate-adjusted premium not worth it.

Equity of access

Equity of access is where the system shows its largest cracks. The syllabus expects you to recognise the inequities and link them to priority groups.

• Geographic equity. Australians in major cities have 4-5 times the number of GPs per capita compared to very remote areas (AIHW). Specialist access is even more skewed. Telehealth (expanded permanently after the 2020 COVID emergency) has partly closed the gap but not for procedures.
• Socioeconomic equity. Bulk-billing rates have fallen in recent years, with many GPs charging a gap fee. Lower-income Australians defer or skip GP visits because of cost. The 2023 federal budget tripled the bulk-billing incentive for children and concession card holders to push back on this.
• Cultural equity. Mainstream services are often not culturally safe for Aboriginal and Torres Strait Islander or CALD Australians. ACCHOs partly address this for Indigenous patients. Translator services and bilingual health workers fill some gaps for CALD Australians.
• Dental equity. Roughly one in three Australians on a low income avoids the dentist because of cost (ABS Patient Experience Survey). Adult dental is the largest gap in Medicare coverage.

Prevention versus treatment spending

Australia spends roughly 1.5-2% of total health expenditure on prevention (AIHW Health Expenditure Australia), well below the OECD average. The remainder goes to acute treatment, primary care, pharmaceuticals, and residential aged care.

The National Preventive Health Strategy 2021-2030 set a target of 5% prevention spending. Progress has been slow. Reformers argue that the current acute-treatment skew is a structural problem driven by political incentives (acute care wins elections, prevention does not).

Emerging treatments and technologies

The syllabus also expects you to mention the impact of new treatments and technologies. Relevant 2024-2026 examples:

• GLP-1 receptor agonists (Ozempic, Mounjaro). Originally diabetes medications, now widely used for weight loss. Have caused a real shift in the obesity treatment landscape but have also driven debate about access (cost, who qualifies under PBS).
• mRNA vaccines. COVID-19 mRNA vaccines were the first large-scale rollout of mRNA technology and have accelerated other vaccine pipelines.
• AI in radiology and pathology. Machine learning tools now read mammograms, retinal scans, and skin lesion images. TGA approval processes are catching up.
• Telehealth. Expanded permanently into Medicare after COVID-19.

Each new technology raises a question about who has access: cost, geographic distribution, and integration with existing care all matter.

How this dot point connects to the rest of Core 1

This dot point sits between "identifying priority health issues" (the system funded to address them) and "the Ottawa Charter" (the framework for action). Strong extended responses link the funding structure to the equity outcomes - the dental gap and the GP gap fee are not accidental, they are structural consequences of how Medicare was designed.