Health system overview

Every day, millions of Australians come into contact with the health system. It may be through health promotion and disease prevention programs such as school-based vaccinations; an appointment with a general practitioner (GP); a visit to the pharmacist to pick up a prescription; or a more complex interaction, such as being admitted to hospital for surgery. A key role of the health system is to respond to these individual needs by providing safe, effective, accessible and appropriate treatment and other services.

Australia’s health system is a complex mix of service providers and other health professionals from a range of organisations – from Australian and state and territory governments and the non-government sector. Collectively, they work to meet the physical and mental health care needs of Australians.

The complex structure of Australia’s health system is reflected in its funding arrangements. The health system is funded by Australian and state and territory governments as well as non-government funders such as private health insurers and individuals. See Health expenditure for more information.

Who is responsible for the health system?

The Australian and state and territory governments broadly share responsibility for funding, operating, managing and regulating the health system. The private for-profit and not-for-profit sectors also play a role in operating public and private hospitals, pharmacies and medical practices, as well as providing private health insurance products.

Health services are delivered by a range of health professionals working in a variety of settings, from large hospitals (in capital cities and regional centres) to small health clinics (such as those in remote areas). Australia’s health workforce includes GPs, surgeons and other medical specialists, nurses and midwives, dentists, allied health practitioners including Indigenous health workers, paramedics and administrative and other support staff. See Health workforce for more information.

A variety of organisations support health services. Health departments and other agencies are responsible for policy and service planning. Research and statistical organisations collect and publish information on the performance of the health system, health conditions and issues. Universities and health services train health professionals. Consumer and advocacy groups have a role in public debates on policies and regulation. Voluntary and community organisations also provide support directly to individuals as well as through activities like fundraising for research and awareness raising through health advocacy programs.

Role of government

Through the Health Ministers’ Meeting (HMM), Australian state and territory health ministers, together with the Australian Government Minister for Health, work together to shape Australia’s health system with the aim of improving health outcomes and ensuring the sustainability of the health system (Department of Health 2022).

The main roles of each level of government in Australia’s health system are described below (Biggs and Cook 2018; Department of Health 2019; Duckett and Willcox 2015).

The Australian Government:

• develops national health policy
• funds medical services through Medicare and medicines through the Pharmaceutical Benefits Scheme (PBS)
• provides funds to states and territories for public hospital services
• funds population-specific services, including community-controlled Aboriginal and Torres Strait Islander primary health care, health services for veterans, and residential aged care
• funds health and medical research
• regulates medicines and medical devices
• supports access to and regulates private health insurance.

State and territory governments:

• fund and manage public hospitals
• regulate and license private hospitals and other health premises, and regulate products with health impacts such as alcohol and tobacco
• deliver community-based and preventive services (for example, cancer screening and immunisation), ambulance services, and services to address complaints against any of these.

Local governments in some jurisdictions can be involved in:

• delivery of community and home-based health and support services
• environmental health services (for example, waste disposal, water fluoridation)
• public health activities.

Additionally, all levels of government have shared responsibilities, including education and training of health professionals, regulation of the health workforce, food standards and safety, improving the safety and quality of health care and funding of programs and services (Biggs and Cook 2018; Department of Health 2019; Duckett and Willcox 2015).

What services are available?

Many services are required to meet the health needs of Australians and deliver a high-quality health system. These include:

• Health promotion and health protection and disease prevention programs, which focus on improving health and preventing the root causes of ill health. This includes immunisation and vaccination, healthy lifestyle initiatives and cancer screening.
• Primary health care, which is often a person’s first contact with the health system. It comprises frequently accessed services including general practice, allied health, dispensing medicines, and community health.
• Specialist care, which provides services for those with specific or complex conditions or issues. This includes mental health services, cancer treatment, alcohol and other drug treatment services, palliative care, and clinical assessment for surgery, as well as diagnostic services such as pathology and imaging. Specialist care also includes pathology, imaging and other diagnostic services and referred medical specialist services, where the patient’s presentation to the specialist is recommended by another medical practitioner.
• Hospitals, which includes services provided to admitted and non-admitted patients (outpatient clinics and Emergency Department care).

Most people have exposure to preventive health measures across their life, from educational campaigns to free vaccines. People utilise health services as needed, dependent on their health needs and personal circumstances. Some may visit a pharmacy or GP infrequently; some may have regular appointments with a GP, specialists or other health practitioners; others may go to hospital for tests, treatments or emergencies.

Medicare

Australia’s health system is underpinned by Medicare – a universal health insurance scheme. Medicare pays rebates for medical services and procedures provided by private practitioners in the community such as GPs and other medical practitioners, and Medicare ensures Australians have access to free hospital services for public patients in public hospitals and a range of prescription pharmaceuticals subsidised under the PBS (Biggs 2016). Medicare is funded by the Australian Government through taxation revenue, including a Medicare Levy and a Medicare Levy Surcharge (ATO 2021). See Medicines in Australia, Referred medical specialist attendances, Pathology, imaging and other diagnostic services, General practice, allied health and other primary care services and Oral and dental health for more information.

Medicare is currently available to Australian and New Zealand citizens, permanent residents in Australia, and people from countries with reciprocal agreements (Department of Health 2019). Most people outside these categories have to pay full fees for health services or take out private health insurance (Private Health Insurance Ombudsman 2019).

Private health insurance

Some medical and allied health services are not subsidised through Medicare. For example, Medicare does not usually cover costs for ambulance services, most dental services and optical aids (such as glasses and contact lenses). For these services, private health insurance is one option for managing these health care costs (Lewis and Willis 2018). Private health insurance can also give people with cover the option to avoid waiting lists in the public system and the ability to choose their own doctor (Biggs 2018).

The Australian Government offers a means-tested rebate to people who hold private health insurance and imposes the Medicare Levy Surcharge on higher-income earners who do not have a particular form of private health insurance (ATO 2021).

Hospitals

Hospitals are an important part of the health system, providing a range of services to many people. Australians admitted to public hospitals are guaranteed access to fee-free treatment as public patients. Funding of public hospital services is managed through intergovernmental agreements between the Australian Government and state and territory governments (Boxall 2014). These agreements specify the arrangements by which the Australian Government transfers funds to the states and territories to support public hospitals as well as how public hospital funding is managed more broadly. The current National Health Reform Agreement outlines an ‘activity based’ system whereby Australian Government funding is based on the estimated cost of the activities performed in each hospital.

See Hospitals for more information.

Impact of COVID-19

The COVID-19 pandemic impacted all levels of the health system. For example, the national health system governance arrangements have been disbanded and reformed under National Cabinet (which replaced the previous Commonwealth of Australian Government committees). Health care professionals have adjusted to many changes in the daily practices and requirements of their work, including increased risks to their own health, forced isolation following exposure and new mandatory arrangements for such things as protective equipment, vaccination and COVID-19 testing. And, for patients, even the common experience of seeing a GP or mental health professional changed, particularly with the introduction of telehealth options to replace the need for face-to-face contact. Some of these issues are canvassed in more detail (see 'Chapter 2: Changes in the health of Australians during the COVID-19 period' in Australia's health 2022: data insights).

Where do I go for more information?

For more information on the health system, see:

• Australia’s Health Performance Framework
• Department of Health The Australian health system

References

ATO (Australian Taxation Office) (2021) Medicare levy, ATO website, accessed 9 May 2022.

Biggs A (2016) Medicare: a quick guide, Department of Parliamentary Services, Australian Government, accessed 21 October 2019.

Biggs A and Cook L (2018) Health in Australia: a quick guide, Department of Parliamentary Services, Australian Government, accessed 21 October 2019.

Boxall A (2014) ‘Explainer: what is Medicare and how does it work?’, The Conversation, accessed 21 October 2019.

Department of Health (2019) The Australian health system, Department of Health, Australian Government, accessed 5 November 2019.

Department of Health (2022) Health Ministers’ Meeting (HMM), Department of Health, Australian Government, accessed 1 June 2022.

Duckett S and Willcox S (2015) The Australian health care system, 5th edn, Oxford University Press, Melbourne.

Lewis S and Willis K (2018) ‘Do you really need private health insurance? Here’s what you need to know before deciding’, The Conversation, accessed 5 November 2019.

NHIPPC (National Health Information and Performance Principal Committee) (2017) The Australian Health Performance Framework, COAG Health Council website, accessed 18 May 2022,

Private Health Insurance Ombudsman (2019) Overseas visitors and overseas students, Private Health Insurance Ombudsman website, accessed 5 November 2019.