Principles of Health Financial Management (Australia)

Introduction

Australia has one of the best health care systems in the world. This is mainly attributed to the arrangements that have been put in place with regard to the delivery of quality health care services and the funding from the government (Helen, 2008). In most developed countries, the cost of health care is rising drastically which is the same case in Australia. This has prompted the Department of Health and Ageing in Australia to try and come up with measures that are going to cushion the low income earning citizens from the rising costs of health care services. At the same time, the Department of Health and Ageing is making sure that the health care services that the low income earning citizens get are of the best quality. The main reason why the Australian government has been able to control the quality of health care services offered to the citizens is that the national health policies are determined by the Department of Health and Ageing which is controlled by the government. This has helped to improve the quality of health care services in both the private the public sectors (Willcox, 2011).

The author of this paper will research to understand the financial structure of the Australian health care system. In addition to that, the author of this paper will explain the role that is played by the various state and federal organizations that are involved in the funding process. On the other hand, the author of this paper will research the new health care funding system that is being introduced in the Australian health care system.

Financial Structure

The Australian health care system is mainly funded by the government which is estimated to be more than 82% of the total funds that are directed towards the health care system (Short, 2010). In the health care financial structure, public hospitals receive 60% of the total funds while residential aged, home and community care facilities receive the rest of the funds (Hurley, 2009). This is in a bid to improve the quality of health care services offered to patients in public health care facilities. This has made the Australian health care system to become one of the best and most expensive health care systems in the world in that the government is able to cushion the low income earning citizens from the rising cost of the health care services. At the same time, the government can regulate the quality of health care services that are offered in both the private and the public health care sectors.

In addition to that, the Australian government funds other universal health care facilities and pharmaceuticals that offer quality health care to Australian citizens. A very good example of a universal health care facility is Medicare which is funded through the state and offers affordable but quality health care services to the low income earning citizens (Ovseiko, 2009). Research institutions are also funded by the government through the health care system to help in the development of new medications that may be used in the prevention and treatment of diseases. It is very important for medical research to be conducted in any given country and as such the Australian government through the Department of Health and Ageing funds universities and other research institutions that are used in the conduction of these researches (National Library of Australia, 2012).

The Australian government through the state and territory governments offers quality health care services to people who may not be able to afford quality health care services in private hospitals (Stoskopf, 2010). The affordable health care services are offered in public acute hospitals and public psychiatric hospitals where the hospitals are funded by the government so as to enable them to provide quality but affordable health care services to the people (Beach, 2011). Some of the health care services that are offered in these hospitals include child health, dental health among others. In addition to that, the government also funds for the provision of medicine in the hospitals in that patients do not have to be charged highly to be able to access medicine (Finkler, 2007). This has made the Australian health care system to be one of the best health care systems in the world today (Department of Human Services, 2011).

The funding towards the health care system is mainly from the taxes that are collected from the state and territory governments. The government charges a taxation levy that is known as the Medicare levy that is used in the funding of the health care system which makes the health care system fully tax-funded. Through the funding from the Medicare levy, patients are able to receive treatment in hospitals from doctors and specialists at affordable charges (Healy, 2011). The funding of the health care system is also extended to the private sector where some of the private hospitals are fully funded by the government to provide quality health care services to the low income earning citizens at affordable charges. Medicare levy pays for approximately 75% of the total health care cost which means that a patient will only have to pay for the 25% which makes it very affordable (National Hospitals and Health Care Reform Commission, 2009).

New Health Care Funding System

The Australian government introduced a new health care funding system that is known as Activity Based Funding (ABF) that is going to be used in the funding of the public hospitals that offer health care services to the people. The government made completely sure that the new health care funding system is in line with the rules that have been set by the National Health Reform Agreement (NHRA) in that the funding must be able to improve the quality of health care services offered to the low income earning citizen. The new health care funding system offers more advantages than the previous health care funding system (Food and Health Bureau, 2011).

Some of the advantages that the new health care funding system has over the previous funding system include; transparency in that the public will be able to monitor and compare the funds that are being directed to the public hospitals. The new health care funding system will also improve the quality and efficiency of the health care services in that the public hospitals will be able to make better use of the resources offered to them to improve on the quality of health care services that are offered to the patients. In addition to that, the funding to the public hospitals will increase drastically which will enable the public hospitals to hire more qualified staff to be used in the delivery of quality health care services to the patients (NSW Health, 2011).

On the other hand, the funding towards the process of research will increase in that research facilities will get more funding that will allow them to conduct conclusive research on the diseases that affect the patients in the hospitals. Funding towards the training of medical personnel will also increase in the new health care funding system in that the hospitals will be able to get more qualified health care personnel that will allow them to deliver the best quality of health care services to the patients. In the new health care funding system, patients will be able to put forward complaints with regard to the quality and efficiency of the health care services offered in the public hospitals in that the government will fund a website that will be used by any patient who may have any kind of issue with regard to the quality of health care services offered in the public hospitals. This will make sure that the patients receive the best quality of health care services at all times (Verrinder, 2009).

Hospitals will also be funded to increase in terms of the facilities that offer health care services. Some of the major improvements that are expected to be made include; the building of car parks in the hospitals while other hospitals will be expected to build more wards that will be used in the delivery of quality health care services to the patients (Harris, 2009). The government will also build more hospitals so as to make health care services more accessible to the patient especially in the rural areas where patients are not able to easily access hospitals or other health care facilities. This will make sure that the patients can receive the best quality of health care services no matter where they are located in the country (Wall, 2009).

Conclusion

In conclusion, Australia has one of the best and most expensive health care systems in the world. The Australian government has been able to put in place measures that are able to cushion the low income earning citizen from the high rising costs of health care services. This has mainly been attributed to the funding of the health care system which is mainly from the Medicare levy that is collected by the government from the state and territory governments. This has made sure that every citizen is able to have access to quality health care services. The Australian government has also introduced a new health care funding system that is known as Activity Based Funding (ABF) which is aimed at making sure that every patient is able to have access to quality, efficient and affordable health care services from any public hospital. Through the new health care funding system, the government has increased the funds that are directed towards public hospitals and those that are directed towards research institutions that are responsible for the conduct of research with regard to the diseases suffered by the patients in the hospitals. The increase in funding is all in an aim of making sure that the quality of health care services offered to the patients is improved and that every patient is able to have access to a hospital no matter where they are based in the country.

References

Beach, C. (2011). Health Services Restructuring in Australia. London, UK: John Wiley and Sons.

Department of Human Services. (2011). Medicare Australia Annual Report 2010-2011. Web.

Finkler, S. (2007). Financial Management for Nurse Managers and Executives. New York, NY: Sage.

Food and Health Bureau. (2011). Australia’s Domestic Health Accounts (DHA). Web.

Harris, M. (2009). Managing Health Services: Concepts and Practice. Sidney, SD: Thompson Learning.

Healy, J. (2011). Improving Health Care Safety and Quality. Sidney, SD: Thompson Learning.

Helen, K. (2008). Understanding the Australian Health Care System. Oklahoma, OK: Cengage Learning.

Hurley, E. (2009). The Australian Health Care System: The Potential for Efficiency. New York, NY: Sage.

National Hospitals and Health Care Reform Commission. (2009). The Australian Health Care System: The Potential for Efficiency Gains. Web.

National Library of Australia (2012). Australian Public Affairs Information Service. Sidney, SD: National Press.

NSW Health. (2011). Annual Report. Web.

Ovseiko, P. (2009). Health Care Systems: Financing and Delivering Health Care. London, UK: Oxford University Press.

Short, S. (2010). Health Care and Public Policy: An Australian Analysis. London, UK: Oxford University Press.

Stoskopf, H. (2010). Comparative Health Systems. London, UK: Harvard University Press.

Verrinder, G. (2009). Promoting Health: The Primary Health Care Approach. Sidney, SD: Thompson Learning.

Wall, A. (2009). Health Care Systems in Liberal Democracies. New York, NY: Sage.

Willcox, S. (2011). The Australian Health Care System. London, UK: Harvard University Press.

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