Critical Discussion Medicare - Term Paper Example

MEDICARE Student Name Course Professor’s Name University City (State) Date Medicare Historical Outline Medicare officially began on February 1, 1984 and is now an established policy enjoying strong public support. In spite of its success, Medicare has had a controversial and turbulent history. Medicare is a health care insurance scheme funded by the Commonwealth, which offers subsidized or free services to the population. Apart from offering free services to patients in public hospitals, Medicare subsidizes hospital services for private patients and offers benefits for outpatient medical services, including consultation. Towards the end of World War II, an increasing number of Australians had begun to acquire health insurance coverage. However, the majority of the population, most of whom were low-income earners, lacked coverage. The first step towards the realization of Medicare happened in the 1970s when Medibank was introduced. On July 1, 1975, Medibank commenced after the passage of Medibank on August 7, 1974 by joint sitting of parliament (Boxall & Gillespie 2013). Although there were other accompanying bills, the Health Insurance Bill (1973) was mainly responsible for the establishment of Medibank. The goal behind the establishment of Medibank was to provide universal equitable health care to the population. Based on the enacted bill, Medibank would be funded from general revenue, would provide free treatment in public hospitals, and provide subsidized health care in private hospitals. Agreements between the federal government and state governments would make funding for the program possible. The Fraser government introduced changes to the Medibank program (Boxall & Gillespie 2013). Among others, the changes included tax levies and the establishment of Medibank Private. However, most of the changes introiduced by the Fraser Government were done away with by the Hawke government, which opted for the original Medibank framework. On February 1, 1984, following the 1983 passage of the Health Legislation Amendment Act, the current Medicare was operationalized (Boxall & Gillespie 2013). From 1984 to now, Medicare has undergone several changes. In 1986, the maximum gap was increased to $20 from $10 (Palmer, 2003). Additionally, the Medicare levy was revised to 1.25% from the 1% of taxable income. Further, the hospital rebate was put at 75% with private insurers covering up for the remaining amount. In the 1990s, some changes introduced included an increase in Medicare levy to 1.5% in 1995. In 1999, there was an introduction of a 30% private health insurance rebate to encourage the adoption of private insurance (Palmer, 2003). In July 2000, the lifetime health cover commenced. In April 2003, a Fairer Medicare was introduced. In August the same year, Territories and States agree to the Australian Health Care Agreements 2003-2008 that apportion $42 billion to Territories and States to offer free treatment in hospitals (Howard 2003). Although not implemented until 2004, Medicare Plus, which included changes to incentives for GPs and Safety Net, was introduced in November 2003 (Palmer, 2003). From then until now, Medicare has evolved to address issues regarding funding and the cost of health care. As an overview, currently, Medicare covers three aspects: medical, hospital, and pharmaceutical (Robson, Ergas & Paolucci 2011). Medically, Medicare provides benefits for some surgical procedures, consultation, tests and examinations, and other specific items. In hospital, patients can be treated free as public patients in public hospitals. Based on the Pharmaceutical Benefits Scheme (PBS), Medicare covers part of the cost of prescription medicines. Medicare provides conditions for private health insurance (PHI) rebate as well as the Medicare levy surcharge. Individuals who have private health insurance cover are eligible for a PHI rebate. To claim the rebate, an individual may choose to use it to reduce their premiums. Since rebate is tested on the income, a higher income means a lower rebate. In fact, higher earners are not entitled to the rebate. To qualify for the PHI rebate, an individual must comply with health insurance policy and other criteria. From 2012, access to rebate was means tested and only families with annual incomes of less than $168,000 and individuals with incomes of less than $84,000 receiving the full 30% rebate (Robson, Ergas & Paolucci 2011). The Levy surcharge is paid by individuals who lack a suitable level of private patient cover and if their income is above the threshold. Critical Discussion Several issues and drivers have been behind the need for Medicare and other social programs. Social health insurance is continuously been seen as a solution to attaining universal coverage. An important question that most countries, including Australia, grapple with is whether financing systems can offer adequate financial risk protection to the entire population against the current cost of health care. The objective of universal coverage entails securing access to affordable sufficient health care (Folland, Goodman & Stano 2007). Therefore, universal coverage two essential aspects: health care for everyone and adequate coverage. An important notion in policy is that of society risk pooling, which means that all households and individuals share the cost of funding health care. When a nation attains adequate risk pooling, less people bear the financial effects of their health risks and more people have access to quality health care. One of the most important issues behind Medicare is financing. In fact, as demonstrated in the history of Medicare, financing has been a key political issue that has driven discourse on the policy. However, social insurance systems derive their funding primarily from general tax revenue. Public and private providers then provide health services. Another important issue is compulsory membership. The government, private enterprises, workers, and self-employed people contribute to the insurance fund. To determine the contribution of an individual, policy makers have to consider the worker’s income (Folland, Goodman & Stano 2007). In some situations, it might be necessary to reduce the contributions of self-employed people in order to make them affordable. There are several core values, beliefs and assumptions underpinning programs such as Medicare in societies. To begin with, Medicare aims at reducing health disparities. As incomes change, the society continues to become highly stratified with the rich affording health care and the poor having no means to access it. To enhance equality in society, therefore, policy makers must find a way of improving access to health care for everyone. Essentially, a more healthy population is able to drive the economic and social growth of a country. Therefore, by providing social health insurance, governments aim at reducing inequalities and drive sustained economic growth. Secondly, instituting Medicare is a way of the government showing responsiveness to the expectations of the people. A key role of governments is to ensure that people can access health care and lead lives that are more productive. In particular, vulnerable populations such as the elderly, children from broken families, and the disabled are unable to access health care. Coming up Medicare demonstrates the government’s willingness to protect those in danger of being left out. The last rationale for health care insurance is to ensure fairness in financing. In capitalist societies, individuals only look out for themselves. Although capitalism is good as it enhances productivity by rewarding hard work, individuals from disadvantaged backgrounds face a myriad of challenges in the course of their lives (Shaw 2007). These challenges inhibit their ability to acquire wealth. Therefore, social health insurance is seen as a way of reducing barriers to vertical mobility. However, there is also an issue of whether taxing the rich to finance the poor is just and fair. Medicare does not give high earners a rebate, which may be interpreted as an unjust action. Nevertheless, governments justify taxing the rich because they also benefit from social infrastructures built by public funds. Instituting Medicare, Australia hopes to mobilize domestic resources for health care needs of the population. Additionally, the program enables organizational change for enhanced system efficiency and quality. For example, new provider payment schemes, and purchaser-provider splits help to improve health system quality. More importantly, Australia aims to extend financial risk protection to a majority of the people or, more specifically, offering enhanced protection to people who have coverage (Shaw 2007). For instance, the government does this by replaying out-of-pocket financing with some kind of prepayment scheme. Further, the government hopes to switch patients to social health insurance from private insurance, at least for the most basic packages for health care services. Therefore, the assumption is that enhanced financial protection allows a majority of the population to access services without having to pay a lot of money from their pockets, hence moving the country to universal coverage (Folland, Goodman & Stano 2007). An important issue when devising Medicare policy is whether the social health insurance can raise health funding. Essentially, whether social health insurance increases health funding is based on how the government designs the contribution system. Governments see the need to control spending while still maintaining adequate and affordable health care access to the people (Shaw 2007). In essence, Medicare only changes the timing health care payments by the people. Instead of paying while one is sick, Medicare enables people to pay before they actually get sick. It is designed to help people who fall sick unexpectedly access health care services without the having to cater for the exorbitant costs. Stakeholder involvement is another critical issue that must be considered in creating the Medicare policy. In Australia, employees and employers play an important role in negotiating working conditions and wages, which are vital aspects of Medicare. There is also the need to incorporate health care providers in the discussions of establishing health insurance policies. Involving health care providers can help in ensuring that the quality of health care provided is high and the cost remains affordable (Doherty, McIntyre & Gilson 2000). Apart from seeking consensus, there is need to establish a legal framework that operationalizes Medicare. The legislature must be involved in the design of the legal framework that defines the interaction between the health insurers, contributors, beneficiaries, and health care service providers. The legal framework addresses how Medicare is governed, how it manages the resources at its disposal, how it determines packages, and how it accredits providers. Once Medicare is in place, it is essential to determine benefits that members are entitled to. Apart from ensuring that Medicare is financially viable and technically feasible, it is important that the policy have an adequate height and depth of coverage. Whereas height is the portion of the cost that the insurance covers, depth is the range of services that a member can access. As a norm, countries often come up with an essential package to guarantee members services against major illnesses (Doherty, McIntyre & Gilson 2000). However, all stakeholders (workers, politicians, providers, and patients) must be involved in determining the scope, depth, effectiveness, and the trade-offs to made in establishing cost-effectiveness. Discussion of Key Findings An analysis of Medicare shows that it has had successes but some challenges persist. The obvious strength of Medicare is that more people can now access quality health care. In fact, the term Medicare is sometimes used to refer to the country’s health care system. Since its establishment in 1984, several health indicators have improved. For instance, Australia’s life expectancy is the third highest in the OECD. This means that more people can access quality health care, which has helped to increase their lifetimes. Apart from increasing life expectancy, Medicare has also helped to increase the quality of life, especially for the elderly. Today, citizens benefit from the three aspects of Medicare cover: medical services, public hospitals, and pharmaceuticals. Medicare has also played a role in improving the quality of care. It has opened channels of communication between the medical society and the government, between nurses and extended-care nurses, between government agencies and care providers, and among government agencies themselves. Medicare has also forced hospitals to improve their services and their physical environments. An aspect of quality, which is labor and resource development, has also been improved. By virtue of paying for a wide range of services, Medicare removed the obstacles relating to the availability of practitioners and resources. Furthermore, Medicare has helped the country to make better use of health resources, including extending service to home settings. In spite of the successes, problems persist. One of the problems is that health care spending is considerably high. In the 2011-2012 financial year, the health care spending was about $140 billion, which represents about 9.5% of the nation’s GDP (Australian Institute of Health and Welfare 2014). This is in spite of the fact that population growth has slowed in recent years. Researchers attribute this increase in spending on social factors such as an ageing population, prevalence of diseases and chronic conditions, personal incomes, and the cost of new technological equipment (Boxall 2010). According to the Commonwealth Health Fund, Australia’s health care system is largely financed by general taxation. Perhaps the biggest challenge facing Medicare is the financing structure. Recent debates regarding Medicare have revolved around forcing the wealthy to pay more for health care. Whereas the government needs to contain the rising health care budget, it is concerned on how to do this without hurting the most vulnerable in society. However, requiring the rich to pay more raises controversies. Already, Australians pay considerably higher rates of health care costs directly or through insurance. As a result, increasing out-of-pocket expenses will only make the cost of health care to be higher for the poor. In short, although Medicare has several strengths, some reforms are necessary to improve access and quality of health care. For example, there is need for policy makers to come up with incentives and funding schemes to address chronic illnesses. Further, emphasis needs to be placed on continuity of care. As the cost of health care increase, most patients may be forced to address critical health concerns without considering the long-term health issues. There may also be the need to increase the Medicare levy if the government considers Medicare as becoming unsustainable (Boxall 2010). This policy addition may be used instead of requiring higher-income people to contribute more. Reforms in health care should include addressing wastages while increasing revenue. References Australian Institute of Health and Welfare 2014, Australia’s health system, Available from http://www.aihw.gov.au/australias-health/2014/health-system/ Boxall, AM 2010, Reforming Australia’s health system, again, Medical Journal of Australia, vol. 192, no. 9, pp.528-530. Boxall, AM & Gillespie, J 2013, Making Medicare: the politics of universal health care in Australia, UNSW Press. Commonwealth Health Fund n.d., Health care system and health policy in Australia, Available from http://www.commonwealthfund.org/grants-and-fellowships/fellowships/australian-american-health-policy-fellowship/health-care-system-and-health-policy-in-australia Doherty, J, McIntyre, D & Gilson, L 2000, Social health insurance, South African Health Review, pp.169-181. Folland, S, Goodman, AC & Stano, M 2007, The economics of health and health care (Vol. 6), New Jersey: Pearson Prentice Hall. Howard, J 2003, Australian Health Care Agreements 2003-2008, Media Release, vol. 23. Palmer, G 2003, (Flashback! 1983) Politics, Power and Health: From Medibank to Medicare, New Doctor, vol, 78, p.28 -32. Robson, A, Ergas, H & Paolucci, F 2011, The analytics of the Australian private health insurance rebate and the Medicare levy surcharge, Agenda: A Journal of Policy Analysis and Reform, pp.27-47. Shaw, RP 2007, Social health insurance for developing nations, World Bank Publications. Read More