You probably don’t think you shell out your hard-earned dollars for something you don’t use. Think again. As consumers, Australians contribute almost one in every five dollars spent on healthcare.
Furthermore, we are spending $21 billion each year on health insurance premiums. Personal spending on out-of-pocket health expenses is costing us about $28.6 billion per year. This includes $3 billion on hospitals, $5.5 billion on dental care and an additional $11 billion on medication.
Data shows that, increasingly, we are funding much of our own healthcare using out-of-pocket payments. Data from the Australian Institute of Health and Welfare shows that out-of-pocket payments increased four-and-a-half times faster than government funding in 2014–15. Among wealthy countries, Australians have the third-highest reliance on out-of-pocket payments.
The rising out-of-pocket costs mean that many Australians simply can’t afford to get the healthcare they need, or they must choose to forgo it altogether.
Estimates suggest that in 2014–2015, the cost associated with seeing a GP meant that one in every 20 people skipped or delayed a visit, despite requiring medical attention. Research undertaken by James Cook University and the NSW Bureau of Health Information in 2016, found that almost half of Australians living with depression, anxiety and other mental illnesses skipped therapy or medication due to cost.
The US healthcare system is notorious for its affordability flaws. Yet, out of 11 countries, only the US surpasses Australia when it comes to people skipping healthcare due to cost.
“In terms of skipping care we perform much worse than Canada and New Zealand, certainly the UK and Sweden,” said health economist from the Australian Institute of Tropical Health and Medicine, Emily Callander.
Compounding the issue, in what Dr Callander calls a “vicious cycle”, in Australia and internationally, the people who struggle most to pay for health services are also most likely to have chronic diseases.
“Those with chronic conditions are more likely to have lower incomes and less wealth because of the exacerbating effect of their condition and their ability to participate in the labour force,” she said.
What do Australians do when they can’t afford essential healthcare services? They turn to discretionary health options. Australians spend more on vitamins and supplements than on prescription drugs. Roughly one-third ($9.3 billion) of what individuals spend on health, goes on over-the-counter vitamins, supplements, painkillers and other unsubsidised drugs. This adds up to more than the combined amount we spend on hospitals and dental care.
Yet, a CHOICE study has recently thrown doubt on the efficacy of complementary medicines and supplements. Around seven out of 10 Australians take some form of supplement, but health experts say there is very little evidence to show that they work.
While Australia has one of the most efficient healthcare systems in the world, the year-to-year financial stress of paying for healthcare is an unavoidable reality. Another reality, is that we are, in fact, willing to pay for discretionary health items that may or may not provide any benefit.
With health insurance premiums set to rise yet again on 1 April, the debate about healthcare equality has never been more important.
Families will soon pay up to $200 more per year, and singles up to $100 more each year, further contributing to household financial stress.
Despite the Government insisting that the 4.8 per cent premium hike is the lowest seen in 10 years, it ignores the fact that this equates to a cumulative increase of 28 per cent since 2012. In other words, if you were paying $2000 for your premium in 2010, you’d now be paying $3000.
Considering how much you’ll probably spend on out-of-pocket expenses and over-the-counter health items, does this sound justified to you? Where precisely is your value for money?
Australians are paying more than ever for private health insurance but we seem to be receiving less and less. Health funds also need to be held accountable, since many customers aren’t completely aware of what they are paying for. Lack of transparency about what is covered, waiting periods and exclusions only exacerbates the problem.
What do you think? Is health care a cost you’re increasingly unable to afford? Are you considering switching health insurers before 1 April? Do you feel you make the most of the services offered by your current fund?