Regional Areas Disadvantaged By Government Subsidies for Private Health Insurance
People living in regional Australia receive a smaller slice of the Governments private health funding pie per person than their city counterparts, despite the lower health status and higher costs associated with delivering services in the bush, according to an article in the latest issue of the Medical Journal of Australia.
The authors, Dr Buddhima Lokuge and Dr Thomas Faunce, of the Australian National University, and Dr Richard Denniss, of the Australia Institute, analysed previously unpublished data from the Australian Bureau of Statistics.
Since 1996, an increasing proportion of federal government expenditure has been directed into Australia's healthcare system via private health insurance (PHI) subsidies, in preference to Medicare and the direct funding of public health services. A further 8 % increase in PHI premiums and PHI tax subsidies was granted this month.
A central rationale for this policy shift has been to increase the use of private hospital services and thereby reduce pressure on public inpatient facilities. However, the authors believe that the federal government has failed to address the impact of this policy change on regional Australia.
The authors postulate that the uptake of PHI is lower in regional areas because of lower incomes and limited access to private inpatient facilities, making PHI less attractive to rural Australians. Private health providers prefer to concentrate facilities in areas of high population and service demand, often neglecting less profitable rural and remote areas with equal healthcare needs.
Although successive Australian governments have offered targeted programs to act as short-term boosters to regional health services, the authors believe it is far more important to ensure that mainstream policies and programs do not institutionally discriminate against disadvantaged groups.
"PHI subsidies are a non-universal and indirect means of channelling public expenditures into the healthcare system. This approach gives governments only limited control over the regional demographic distribution of funds, disadvantaging groups who are less likely to use or benefit from PHI, including those on low incomes and regional and Indigenous Australians", the authors conclude.
"While Medicare has limitations, its universality and the direct nature of hospital funding allow greater flexibility to promote equitable and needs-based distribution of funds."
The Medical Journal of Australia is a publication of the Australian Medical Association.
CONTACT Dr Buddhima LOKUGE 0422 988 659
Judith TOKLEY, AMA Public Affairs, 0408 824 306 / 02 6270 5471