HolleyUSvsAUS (1)

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Oct 30, 2023

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Healthcare Systems in the United States and Australia: A Comparison Stephanie Holley American Public University HCAD500: Healthcare and Healthcare Systems Dr. Barbara Cliff October 17, 2023

Healthcare in the United States and Australia: A Comparison Living a healthy lifestyle is important. Individuals who prioritize their physical and mental health tend to have fewer medical issues feeling fit, relaxed, and able to cope better with the stresses of life. The United States and Australia both offer health services that include superior levels of medical care and advanced technology to treat communicable as well as non- communicable diseases. While both countries offer great medical care, the delivery of that care is quite different. The United States and Australia could both benefit from each other’s healthcare systems providing all its citizens with the highest level of care. Background This paper will discuss the United States Healthcare system and how it is delivered to the American people as well as The Healthcare system Australia delivers to its citizen. A comparison of pros and cons of both will be included. Information provided will show where both countries could learn and benefit from each other’s Healthcare systems. The research for this discussion was obtained from online sources from the United States healthcare websites and Australia’s healthcare websites. Discussion Healthcare coverage is vital to an individual’s quality of life. Enrollment in healthcare coverage supports the health and well-being of individuals and their communities. Studies show that healthcare coverage improves an individual's access to health care, level of care and how they view their overall health. Having healthcare coverage helps reduce the level of financial stress that often accompanies medical bills. Those with medical coverage are more likely to seek medical attention more regularly knowing they will not be burdened with high medical debt.

Healthcare systems vary greatly by country and its economic wealth, and population. “In 2021, the Commonwealth Institute examined the healthcare systems in 11 high income countries” (Cronin, 2023). The United States and Australia were 2 of the countries included in the top 11. There were 4 measurements examined: ease of access to healthcare, the administrative processes and procedures required, the equity around the healthcare offered and the quality of healthcare outcomes (Cronin, 2023). Making the top of the list was Norway, the Netherlands and Australia while the United States came in at 11. According to the Commonwealth Fund, the United States consistently comes in last when compared to other high-income countries. Research has shown that the United States despite spending far more of its GDP on healthcare, ranks last on access to care, has poor administrative efficiencies, coverage is not equitable among its citizens and has lower healthcare outcomes (Schneider, et al., 2021). How does the Healthcare System in the United States compare to that of Australia? The United States delivers healthcare 2 ways: Public and Private. Many US citizens use a combination of both. Public healthcare programs provided are called Medicare, Medicaid, and the Children’s Health Insurance Program. Funding for Medicare comes directly from working Americans and legal resident’s payroll taxes. The remaining premiums are paid by the individual. Medicaid is funded by the federal government and each state (medicare.gov,2023). An important factor to point out is that the US does not provide health insurance for all its citizens and is no longer mandatory. While some states such as California do require its residents to have health coverage with a tax penalty if not covered, most US states do not. The Medicare program in the US is a federal health insurance program that provides health coverage for those 65 and older. Some with certain disabilities and medical conditions can qualify for Medicare also. Medicaid is a federal and state program that provides healthcare to those with limited income. Medicaid

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benefits include skilled nursing facility care (nursing home care) personal care services as well as assistance paying for Medicare premiums (medicare.gov, 2023). Medicare is broken down into several parts. Part A Medicare covers hospital insurance. This helps cover the costs of an inpatient hospital stay, a stay at a skilled nursing facility (SNF), hospital and in-home hospice care. Part B Medicare covers: Dr visits, Outpatient care, preventative services such as wellness visits, vaccines, and screening. Medical equipment such as walkers, wheelchairs, hospital beds, and oxygen tanks. A Medicare Part D covers a person’s cost of prescription medications. It is important to know that Part D coverage is separate, and one can join the Medicare drug plan in addition to their original Medicare plan. Medicare offers the Medicare Advantage Plan (also called Part C) which includes the Part D drug coverage. These drug plans are run by private insurance companies that are required to follow the rules set by Medicare (medicare.gov, 2023). With Medicare covered individuals can choose any doctor or hospital that takes Medicare in the US. Medigap is supplemental additional insurance coverage program offered by private companies. Medigap can be used to cover any out-of-pocket expenses. Medicare Advantage is a “Bundled” Medicare approved plan from private companies that offer Part A, Part B, Part D. As with Medicare, covered individuals will need to use doctors and healthcare facilities that are in the plan’s network. Medicare Advantage plans can also come with vision, dental and hearing services (medicare.gov, 2023). The Children’s Health Insurance Program (CHIP)federal and state funded program that insures approximately 12% of children in the US. CHIP was created in 1997 because of too many moderate to low-income families not qualifying for Medicaid. In Fiscal Year ending in 2021 the CHIP funding was $21.2 Billon dollars. The federal government funded 75% and states funded 25%. CHIP does help lower the costs of insurance for parents keeping insurance

premiums affordable. Families that are below the 150 percent poverty level and are enrolled in the CHIP plan via their states Medicaid program are exempt from paying any premiums. Studies show that qualified families enrolled in the CHIP program spent on average $158 per child annually compared to private or employer-based plans cost $891 annually. CHIP plans often cover higher costs than private marketplace plans and are required to provide children with dental care. Marketplace insurance plans do not require dental coverage for children (pgpf.org, 2023). Private insurance is available in the United States also. Under the Affordable Care Act, employers who have greater that 50 full-time employees must provide health insurance to their employees or be subject to an IRS penalty. Three types of private insurance include: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Traditional fee-for-services health insurance. These programs are often expensive and unaffordable for those with lower incomes. Those who can afford them whether it is through their employer or cash paid, are often restricted to certain healthcare organizations and its’ affiliated doctors. As with Medicare plans, those that have private marketplace insurance coverage are required to pay a copayment and have deductibles. To see a specialist a referral is required causing long waiting periods between care for a medical issue. Healthcare organizations can choose to only see those associated with certain insurance programs forcing patients to stay within a medical network. If a patient goes outside of their preferred network, they are required to pay full price for services rather than the “negotiated” lower rate that is given to the in-network providers. This limits an persons’ choice and forces them to accept the coverage that comes with their policy. These insurance premiums paid to private companies are in addition to the payroll taxes a working

individual is required to pay to fund the federal government’s Medicare programs. The bi-weekly or monthly premiums for private insurance are not tax deductible. Australia has a combination of healthcare. Similar to the United States, Australia offers a combination of public and private health insurance coverage. Australia’s Medicare system differs from the US in that it is a single-payer universal healthcare program available to every Australian citizen or permanent resident regardless of age. The Medicare plan provides medical visits, medications, and hospital stays for low or no cost. Australia’s Medicare also covers some of the costs associated with physical rehabilitation, nursing home care, and provided dental care for children. Medicare is funded through taxes. Residents pay 2% tax of their income to fund Medicare. This results in zero costs when visiting a a provider or facility. If there are any outside costs for coverage, patients can file claims to be reimbursed. Prescription medications are subsidized allowing for more affordability and access to needed medications (Internationalinsurance.com, 2023). Half of the the Australian population also have private insurance. Australians who earn over $90,000 per person or $180,000 per household are encouraged to have private insurance coverage. This reduces the pressure on its public Medicare system. Those earning over the above amounts are subject to an additional Medicare Levy of 1- 1.5% amount of their income. Medicare does not cover vision, ambulance and dental care (for adults) while private insurance policies do. Also, when needing to see a specialist (depending on the issue and type of specialist) it is required to get on a waiting list that can sometimes take anywhere from 3 months to a few years. Private insurance does not take this long. The Australian government offers subsidies of up to 30% of private insurance coverage costs to encourage those who can afford private insurance to enroll.

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Conclusion Looking at both the United States and the Australian Healthcare systems, we must take into mind a few things. The United States has a population of approximately 331 million people while Australia has 25.5 million. With a much higher population, healthcare coverage in the US would obviously cost more. The US healthcare coverage lacks in that Medicare and Medicaid do not cover everyone. Everyone is required to pay into these programs, yet they cannot participate because they are not old enough or poor enough. Instead, they are required to pay taxes to fund these programs they may never get to use in addition to paying a social security tax that could be unavailable to them at retirement age. Employed individuals who want healthcare coverage must pay additional payments either through employer sponsored plans or 100% out of their own pockets. Unemployed individuals and those below the poverty level can only access the government programs. The remaining population at an additional cost, has access to a broader set of programs with a large choice in healthcare providers. There are no regulations that cap the cost of medical care in the US. One hospital could charge a patient with one insurance policy $1000 per IV bag of Normal Saline while another patient in the same hospital with a different insurance plan is charged $5.00. No state or federal regulations or monitoring give the medical and insurance companies the ability to charge patients any price. Australia does not provide dental and vision coverage in its Medicare program. The US is provided but is often expensive with fair coverage of benefits. Prescription medications in Australia have price caps offering medications at a more affordable price. Medications in the US are not price capped and can have high cost often preventing people from getting lifesaving medications.

Australia has the Outback with many unable to access medical facilities. The Australian government has doctors visit the Outback and the Aboriginals to provide wellness checks and medical care. After comparing the healthcare systems of the United States with the healthcare systems in Australia, it seems both countries could learn to use both sets if ideas. The United States would benefit from an Australian type of Medicare where everyone regardless of age receives healthcare coverage. A slightly higher tax to cover 331 million people or a government encouraged subsidy to purchase privately could be proposed. Australia should find ways to build and provide healthcare coverage for those living in the vast part of the country or the Outback instead of sending help every 3 months. Dental and vision should be an included part of their Medicare program. The United States should find ways to cap the cost of medications as well as monitor the costs of medical coverage. The driving force causing so many problems in their healthcare systems is costs. The medical, pharmaceutical, and insurance industries have far too many freedoms in deciding the cost of healthcare. At the end of every doctor visit, hospital stay, emergency room, pharmacy pick-up is one thing: a patient. This should be the most important deciding factor for all medical costs. When a patient has affordable access for themselves and their families, everyone is healthier and happier. While both countries offer high often superior levels of healthcare, the cost of that healthcare and the tax burdens along with it shouldn’t keep so many unable to access it.

References Children’s Health Insurance Program (CHIP) eligibility requirements. Children’s Health Insurance Program (CHIP) Eligibility Requirements | HealthCare.gov. (n.d.). https://www.healthcare.gov/medicaid-chip/childrens-health-insurance-program/ Cronin, J. (2023, July 12). Ranking the best healthcare in the world by country. International Citizens Insurance. https://www.internationalinsurance.com/health/systems/ Parts of Medicare. Medicare. (n.d.). https://www.medicare.gov/basics/get-started-with- medicare/medicare-basics/parts-of-medicare#:~:text=Medicare%?20is%20federal%20health %?20insurance,with%?20limited%20income%?20and%?20resources. Schneider, E. ¢, Shah, A., Doty, M. m, Tikkanen, R., Fields, K., & Williams, R. D. (2021, August 4). Mirror, mirror 2021: Reflecting poorly. Commonwealth Fund. https://www.commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror- 2021-reflecting-poorly Three key things to know about chip. Peter G. Peterson Foundation. (n.d.). https://www.pgpf.org/blog/2023/08/three-key-things-to-know-about-chip

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