Australia Yearbook - 2001

Chapter 9—Health 359
before they go into hospital. Patients benefit
by receiving only one or two bills, rather than
many from various doctors, and claims from
health funds and Medicare are made on the
patient’s behalf.
Lifetime Health Cover—this allows health
funds to charge different premiums based on
a person’s age when they first take out hospital
cover. People taking out hospital cover early in
their lives will pay lower premiums than those
taking it out later in life. This rewards
membership loyalty and early joining while
deterring people who join health funds
knowing they will need to claim for health
services in the near future, but drop their
membership soon afterwards. Under Lifetime
Health Cover, the premium paid by people
entering private health insurance will be based
on the age at which they first join and, once
set, remains at that rate relative to premiums
for people entering at different ages. In other
respects the principle of community rating is
maintained.
Other reforms addressing affordability, product
innovation and industry efficiency include:
a reduction of in-hospital pharmaceutical
gap fees;
discounted premiums for group members,
when the discount reflects administrative
savings;
loyalty bonus schemes, that will allow health
funds to develop rewards for members
based on length of membership;
private sector trials of coordinated care and
early discharge programs;
a private health insurance consumer
information service; and
regulation of the private health insurance
industry, which will put private health
insurance on a more commercial footing.
Household expenditure on health
and medical care
Average household expenditure on health and
medical care has increased steadily between
1984 and 1998–99. As a proportion of total
household expenditure on goods and services,
health and medical care increased from 3.9%
in 1984 to 4.7% in 1998–99 (table 9.37).
The Household Expenditure Survey (HES)
provides estimates of expenditure on medical
care and health by households across Australia.
Expenditure is net of any refunds and rebates
received from Medicare, private health insurance
companies and employers. The ABS has
undertaken the HES at five-yearly intervals since
1984. Average expenditure in this survey is
calculated across all households, not just those
households that spent money on specific goods
or services.
Expenditure on accident and health insurance
has accounted for the largest percentage of total
expenditure on health and medical care in each
of the survey periods. However, this percentage
has declined markedly between 1993–94 and
1998–99 (from 50% to 41%) reflecting the
decrease in hospital, medical and dental
insurance from 44% of total health expenditure
in 1993–94 to 35% in 1998–99. This decrease is
largely due to the falling health insurance
coverage, and has occurred despite increases
in private health insurance costs between the
surveys.
While the proportion of household health
expenditure spent on health practitioner’s fees
has remained relatively constant since 1984,
expenditure on individual items have fluctuated.
In particular, general practitioner doctor’s fees
have decreased from 3.8% of total health
expenditure in 1984 to 2.4% in 1998–99, while
specialist doctor’s fees have increased from
3.9% to 7.8%.
The proportion of total health expenditure spent
on medicines, pharmaceutical products and
therapeutic appliances has increased from
20% in 1984 to 25% in 1998–99.
Table 9.38 shows that in 1998–99 average
expenditure on health and medical care per
household increased in each quintile of gross
household income. Households reporting the
highest 20% of gross income spent around three
times the amount spent by the lowest 20% of
households on health and medical expenses
($53 compared to $17). This differential increases
when comparing the household expenditure of
the highest and lowest gross income quintiles on
accident and health insurance ($24 to $6),
reflecting that people in the top quintile are more
likely to have health insurance. The largest
difference in average expenditure between
the highest and lowest income quintiles is
expenditure on health practitioner’s fees
($17 compared to $4).