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What makes for a high performing health care system: an Australian perspective

Speech by Professor John Horvath, Chief Medical Officer, to the 7th International Meeting to Improve the Quality of Health Care, England, 14 July 2005.

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14 July 2005

Slide 1: What makes for a high performing health care system?

• Each country has its own unique approach to the development of its health care system.
• A country’s health care system is a reflection of its identity and its values. Governments determine how they will fund and organise their health care systems based on national values.

Slide 2

• A high performing health care system is one that is:
  • able to adapt to external pressures and societal changes—be they shifts in demographics, technological developments or changes in patterns of disease.
  • able to deliver safe and effective health services – through tools, protocols and strategies to support both providers and consumers in improving the safety and quality of health care.

Slide 3: Australia’s health care system

• Australia’s health care system has remained relatively stable over the last 30 years.
• The seeds of Australia’s universal health system date back to June 1948 when the Pharmaceutical Benefits Scheme began operating. This laid the groundwork to make essential medicines available to the entire population. In 1969, the Gorton Coalition government introduced a new Health Benefits Scheme. This included a co-payment by patients (a maximum of $5 for any one service).

Slide 4

• These led to the establishment of Medicare, a universal national health insurance scheme whose key elements include access to GP and specialist medical services and subsidised pharmaceuticals. The third pillar of Medicare -- access to free public hospital care for all Australians – is the main change to previous arrangements under Gorton.
• Medicare provides affordable health care to all Australians, regardless of age, income levels or geographic location.

Slide 5

• Complementing our strong public health care system, Australia has a robust private health care sector. Ensuring a balance of public and private sectors helps secure the long-term sustainability of our system, by sharing the costs between individuals and governments.

Slide 6

• Through Medicare, Australia provides heavily subsidised access to medical services and pharmaceuticals. It is important to maintain a balance between subsidy and patient contribution to ensure long term sustainability of access schemes.
• While the PBS has been one of the fastest growing components of Australia’s health spending, patient contributions have remained fairly stable and as a result, co-payments have decreased as a percentage of overall spending.

Slide 7

• The Government is committed to strengthening the private health care sector and has policies in place to encourage this:
  • the introduction of a 30% rebate on private health insurance premiums and incentives for consumers to take out private insurance at an earlier age
  • the maintenance of community rating so that the elderly or sick do not attract higher fees
  • from 1 April 2005, the introduction of increased rebates to 35% for people aged 65 to 69, and 40% for people aged 70 and over.


• Over 8.6 million Australians (or around 43% of the population) now have private health coverage. Coverage has increased significantly in recent years (up from 32.2% in March 2000)
• The whole health sector benefits from a strong private system. It takes pressure off public services, provides choice for consumers and facilitates increased investment in health care without increasing taxes.

Slide 8

• We have been reaping the benefits of a world class health system.
  • Australia ranks fifth in the world for life expectancy (80.4 years) and eighth in the world for healthy life expectancy (72.6 years).

Slide 9

• Childhood immunisation coverage rates have increased to an all-time high, with 91.2% of children aged 12-15 months fully immunised at the end of 2004. This is up from 53% recorded in 1989-90.

Slide 10

• There has been a significant reduction in infant mortality rates from 9.6 deaths per 1,000 live births in 1983 to 4.8 per 1,000 live births in 2003.

Slide 11

• According to the Australian Institute of Health and Welfare 2004, National Drug Strategy Household Survey, the number of Australians who smoke daily has fallen from 19.5% of the population in 2001 to 17.4% in 2004.

Slide 12

• In 2003, there were 2,213 suicides registered, representing an age standardised death rate of 11.1 per 100,000. This is 6% lower than in 2002, and 24% below the figures of 1997.

Slide 13

• Cancer mortality rates continue to fall due to early detection and better treatment.
  • The age-standardised mortality rate from breast cancer for women in the screening target age group (50-69 years) has fallen from 68 per 100,000 in 1993, shortly after national screening started, to 57 per 100,000 women in 2002. (AIHW, BreastScreen Australia Monitoring Report 2001-2002)

Slide 14

• The age standardised mortality rate from cervical cancer declined between 1982 and 2002. For all women aged 20 years and over there was a decline from 5.1 deaths per 100,000 women in 1982 to 2.1 per 100,000 in 2002. During the same period, for women in the target age group of 20–69 years, the rate declined from 5.4 per 100,000 to 2.1 per 100,000. (AIHW, Cervical Screening in Australia 2001-02).

Slide 15: The challenges

• But we should not rest on these positive outcomes. Our health care system needs to continually evolve and adapt to the challenges that we face.
• After 30 years of a relatively stable health care system, pressures for change have been mounting because of the changing patterns of disease.
• In Australia, chronic diseases are estimated to be responsible for 80 per cent of the total burden of disease. It is particularly regrettable that most of these diseases are largely preventable.
• Because of the rise in chronic diseases, we need to shift our focus from acute/hospital interventions to ambulatory management of chronic diseases and from a focus on illness to prevention.
• Consequently, our health care system’s structures and financing that were based largely on acute intervention models need adjustment. There are pressures from various stakeholders to review the Commonwealth-State divide in health funding.

Slide 16

• Improving the delivery of health and community services to Australians living in rural and remote regions continues to be a major concern and focus of action.

Slide 17

• The health of populations living in rural and remote areas of Australia is worse than those living in capital cities and other metropolitan areas. Mortality and illness levels increase as one travels away from metropolitan centres to rural areas and remote locations.

Slide 18: Our response

• It is important for us to ensure that patients with chronic or complex conditions are able to access the right services at the right time and that their conditions are managed effectively.

Slide 19

• We have expanded Medicare items from payments to GPs for face-to-face consultations to payments for ‘disease management’ items. Because patients with chronic diseases require other elements of care, we have introduced allied health and practice nurse items.


• We are continuing to explore how health expenditure can continue to reflect the changing patterns of disease.
  • We have also moved to ensure that all sectors of society are able to access affordable quality health care, no matter where they live or how much they earn.

Slide 20

No notes

Slide 21

• To address concerns about the Commonwealth/State divide in health, a recent meeting of Council of Australian Governments (CoAG) members recognised that there are problems at the interfaces of different parts of the health system.
• They recognised that the health system can be improved by clarifying roles and responsibilities and by reducing duplication and gaps in services.

Slide 22

• Ways in which the health system could be improved include:
  • simplifying access to care services for the elderly, people with disabilities and people leaving hospital
  • helping public patients in hospital waiting for nursing home places
  • helping younger people with disabilities in nursing homes
  • improving the supply, flexibility and responsiveness of the health workforce
  • increasing the health system’s focus on prevention and health promotion
  • accelerating work on a national electronic health records system
  • improving the integration of the health care system
  • continuing work on a National Health Call Centre Network
  • addressing specific challenges of service delivery in rural and remote Australia


• COAG agreed that Senior Officials would consider these ways to improve Australia’s health system and report back to it in December 2005 on a plan of action to progress these reforms.


• Another major challenge is the international shortage of health professionals. COAG has also endorsed a Productivity Commission research study which will help governments to improve their understanding of the workforce-related pressures facing the health system. The study will inform policies for continued delivery of quality health care into the future.

Slide 23

• We also need to be aware of consumer expectations.

Slide 24

• We have just started a Consumer Perspectives Survey to collect information on consumers’ experiences, expectations and perceptions of the health and ageing system to assist us in developing policies and programs responsive to people’s needs.

Slide 25

• Going beyond our borders, we are continuing to support the strengthening of health systems in the Asia Pacific Region. Australia has recently taken on a greater leadership role in the Asia Pacific Region, in response to significant events such as the spread of HIV/AIDS and the emergence of new pandemics and old diseases such as polio. We would like to play a role in ensuring that our neighbour’s health systems are effectively managed and delivered. Each individual country’s health system is strengthened by collective effort.

Slide 26: Conclusion

• Australians have overwhelmingly supported the three pillars of Medicare. Therefore our challenge is to ensure that it is relevant to the future.


• We need to be able to manage changing consumer demands and expectations.
  • In the future, we can expect further advances and innovations in health care, accompanied by increasingly well-informed patients with increasing incomes and greater demand for services.


• We need to bear in mind regional challenges and fulfil our obligations to the international community.


• We look forward to working alongside other nations and learning from them in confronting and addressing these challenges.


• Our goal is to ensure that consumers continue to have access to the very best health care available, both now and into the future.