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what roles do health care facilities

and services play in achieving
better health for all australians?

In this chapter you will evaluate health care in Australia by investigating issues in relation to social
justice principles. You will examine the advantages and disadvantages of Medicare and private health
insurance as well as critically analyse complementary and alternative health care approaches.

Health care in Australia

Health care, for a long time, was seen simply as the curative processes adopted by medical
professionals in response to illness or injury. It revolved around the doctorpatient relationship and
focused on treating the individual. Very little thought was given to the overall health of the population
and the social factors contributing to poor health. With a clearer understanding of the wide-ranging
factors that influence individual and community health there has been a shift in emphasis. Health care
in Australia now involves a strong partnership between public health initiatives and medical care.
Because the major causes of sickness and death relate to lifestyle, the aim is to improve quality
of life through health promotion initiatives that establish environments that enhance positive health
behaviour. The role of health care is to achieve a delicate balance between resources for prevention
and resources for treatment. This changing emphasis towards prevention has been seen in numerous
national health campaigns. Examples include HIV/AIDS, breast cancer and mental health.
PDHPE Application and Inquiry


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Health care is now the responsibility of many
organisations; predominantly the different levels
of government in collaboration with the private
sector. With scarce resources available, these
organisations must work closely with each other to
provide the best possible health service.
In summary, the role of health care is no longer
simply curative. Instead, it is concerned with
ensuring an improvement in the health of the
population as a whole through a combination of
preventative strategies and clinical medical care.

Range and types of health

facilities and services
A mix of public and private sector providers deliver
health services. These services are provided by
the following professionals:
Figure 3.1 Most people visit their GP when they are not feeling well
a range of medical practitioners
other health professionals Some people choose to be admitted to a private hospital. Private
hospitals patients treated in a private hospital can choose their treating
clinics medical specialist. However, fees for all the hospitals services
government and non-government agencies. (such as accommodation and surgical supplies) will be charged.
People may also choose to visit dentists and other private sector
When they do not feel well, most people will
health professionals, such as physiotherapists, chiropractors and
visit their general medical practitioner (GP). People
natural therapists.
can choose their own GP. For specialised care,
however, a GP may refer them to specialist medical Several state and territory governments and the Australian
practitioners, other health professionals, hospitals Government have established free 24-hour telephone-based health
or community-based health care organisations. advice services. These services are staffed by health professionals
Community-based services provide care and who answer queries from callers about health problems. Other public
treatment for mental health issues, alcohol and health preventative services include:
drug use, and family planning. Individuals can immunisation services and other communicable disease control
access these services directly without being public health education campaigns (including health promotion in
referred by their GP. the areas of nutrition and physical activity)
Public hospitals can be used by visiting an activities to ensure food quality
emergency department, through the ambulance
injury prevention activities
services or after referral from a medical
practitioner. Public hospital emergency and programs to reduce the use and harmful effects of tobacco,
outpatient services are provided free of charge, alcohol and illicit drugs
as is inpatient treatment for public patients. environmental monitoring and control
People admitted to a public hospital can choose screening programs for diseases such as breast cancer and
to be treated there as public or private patients. cervical cancer.


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Public health Primary care Hospitals Specialised
services and community health services
health care services
Cancer screening Primary health care Admitted patient Specialised medical
for Aboriginal and care practitioner
Torres Strait
Islander peoples Emergency department Specialised mental health

Dental Outpatient care and other Sexual and

non-admitted care reproductive health
Allied health
Alcohol and other
Community health drug treatment

Ambulance and Royal National Diabetes

Flying Doctor Service Service Scheme

Complementary and Hearing

alternative health Palliative care
Health services in the
Australian Defence Force

Source: AIHW, Australias Health, 2008

Figure 3.2 Categories of health services

Health services are categorised into public health services, primary care and community
health services, hospitals and specialised health services, as illustrated in Figure 3.2.

Public health services

Public health in Australia is the organised response by society to protect and promote
Public health focuses on
health, and to prevent illness, injury and disability; the starting point for identifying prevention, promotion and
public health issues, problems and priorities, and for designing and implementing protection rather than on
interventions, is the population as a whole, or population subgroups (Australias
treatment; on populations
Health, 2008). The term public health is also called population health and
rather than on individuals;
preventative health.
and on the factors and
Public health focuses on prevention, promotion and protection rather than on
behaviours that cause illness.
treatment; on populations rather than on individuals; and on the factors and behaviours
that cause illness. Public health activities include programs, campaigns or events. They
use a variety of methods (such as health education, lifestyle advice, infection control,
risk factor monitoring and tax loadings) to discourage unhealthy lifestyle choices. They also
focus on particular settings to target particular population groups through schools, homes,
workplaces, the media and GP consultations.

Cancer screening
Screening programs for breast, cervical and bowel cancers aim to reduce morbidity and
mortality as early as possible. BreastScreen Australia uses mammography for screening, the
National Cervical Screening Program uses Pap tests and the National Bowel Cancer Screening
Program uses faecal occult blood tests. Breast cancer screening services are free to females in
the target age group. Bowel cancer screening is free to those males and females who have been
invited to participate in the screening. Screening for cervical cancer is covered by a Medicare

PDHPE Application and Inquiry

Vaccinations covered by funding for children include diphtheria, tetanus, pertussis (whooping
cough), polio, measles, mumps, rubella, Haemophilus influenzae type b (Hib), meningococcal
type C disease, varicella (chickenpox), pneumococcal disease, hepatitis B, rotavirus and, for
females aged 12 years and over, human papillomavirus (HPV). Aboriginal and Torres Strait
Islander children living in high-risk areas are covered for hepatitis A. For adults, influenza
and pneumococcal vaccines are available free to all Australians aged 65 years and over, to
Indigenous Australians aged 50 years and over, and to those younger Indigenous Australians
who are deemed to be medically at risk.


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Primary care and community Table 3.1 GP consultations: 20 most common patient
reasons for frequent encounters (RFEs), 200607
health services
Patient reason for Percentage Per 100
General practitioner and other non-specialist services encounter of total RFEs encounters
Approximately 85 per cent of Australians see a doctor at
Check-up 9.7 14.6
least once a year. The workloads of GPs are changing in
terms of the patients with whom they spend most time. The Prescription 7.8 11.8
number of people aged 4564 years and 75 years choosing Test results 4.6 6.9
to visit their GP increased. There was a decrease in the
Cough 3.8 5.8
proportion of younger patients aged less than 14 years.
There was also a decrease in the number of patients aged Immunisation/vaccination 2.9 4.3
2544 years. There has been a slight but significant trend Throat complaint 2.2 3.3
towards an increase in the proportion of encounters that
were with males, although females still accounted for 56 Back complaint 2.1 3.2
per cent of all GP visits. People visit a GP because they have Rash 1.9 2.8
symptoms, complaints or a known diagnosis; for example,
Upper respiratory tract 1.6 2.4
asthma. About half the visits to a GP are related to the
respiratory, musculoskeletal, skin, circulatory or digestive
systems. Patients ask GPs for partial or full check-ups, Hypertension/high blood 1.4 2.1
new or repeat prescriptions and test results. pressure
Depression 1.3 1.9
Primary health-care services for Aboriginal
and Torres Strait Islander peoples Fever 1.2 1.8

Indigenous Australians tend to use mainstream services Abdominal pain 1.2 1.8
differently from the rest of the Australian population. Administrative procedure 1.1 1.6
For geographic, social and cultural reasons, mainstream
Headache 1.0 1.6
services are not always accessible to, or the most
appropriate provider of health care for, Indigenous Skin complaint 0.9 1.4
Australians. Australian governments recognise this and,
Ear pain 0.9 1.4
given the relatively poor health status of Aboriginal and
Torres Strait Islander peoples, provide specific health care Weakness/tiredness 0.9 1.4
services to meet their needs. Indigenous-specific health Diarrhoea 0.9 1.3
services are important providers of comprehensive primary
Knee complaint 0.8 1.3
health care. The state and territory governments provide
community-based Indigenous primary health care services. AIHW, Australias Health, 2008
These include management of acute and chronic health
conditions, preventative health measures (such as immunisation and screening), health promotion
activities, transport services and assistance in accessing other appropriate community and health
services. A small number provide specific programs only, such as health promotion and counselling.

Community health services

Community health services usually consist of multi-disciplinary teams of paid health professionals
who aim to improve the health of particular communities. Community services are delivered in a variety
of settings, including specially built community health centres, local council buildings, schools and
clients homes. The Australian Government funds community health services that include:
the regional health services program
rural primary health projects.
State and territory governments also provide a variety of community health services. These include:
maternal and child community health services, such as antenatal and postnatal parenting support
services, early childhood nursing programs, disease prevention programs and treatment programs
relating to child development and health
womens health services, encompassing health promotion programs and services for females across
a range of health-related areas
mens health programs, including promotional and educational programs
community rehabilitation programs, including case management, prosthetics services, equipment
schemes and home modification.


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Dental services
Most dental services are provided by private dental
practitioners. Services include endodontic (root canal) and
crown and bridge services, orthodontic and prosthodontic
(denture) services, tooth extraction services, periodontal
(gum) services, and cleft lip and cleft palate services.
State and territory governments provide public dental
services to primary and secondary school children.
Disadvantaged adults are also provided general dental
services and some specialist services are provided to
adult holders of concession cards.

Ambulance services
The role of ambulance services generally includes providing Figure 3.3 Public dental services are provided to primary
emergency pre-hospital patient care and transport in and secondary school children
response to sudden illness and injury. It also involves
retrieving emergency patients, transporting patients between hospitals,
conducting road accident rescues and coordinating patient services in multi-
casualty events.

The Royal Flying Doctor Service

The Royal Flying Doctor Service (RFDS) provides aeromedical emergency
health services, and primary and community health care clinics at remote
sites. These services and clinics include routine health checks and advice;
immunisation; child health care; and dental, eye and ear clinics. The RFDS also
provides telehealth consultations via radio, telephone or videoconference;
pharmaceutical supplies at remote sites; and transfers of patients between

Complementary and alternative health services #

Private health insurance
Australians have access to a range of services that either complement or are
policies have begun to cover
alternative to mainstream health care services. Of those who used complementary
complementary and alternative
or alternative therapies in the previous 12 months, 40 per cent had seen a
therapies, which is one reason for
chiropractor, 32 per cent a naturopath, 23 per cent had remedial massage and
20 per cent had acupuncture. their growing in acceptance.
PDHPE Application and Inquiry

Figure 3.4 The Royal Flying Doctor Service provides health Figure 3.5 Acupuncture is classed as an
services for remote communities alternative health service


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On a typical day, around 20000 Australians are admitted to a hospital, with about the same number
leaving. There are about 124000 non-admitted services.

Admitted patient care

The reasons people are admitted to hospital are of interest to health service managers, planners,
funders and researchers. The conditions dealt with and treatments carried out in hospitals include
renal dialysis, chemotherapy, gastrointestinal endoscopies (viewing the inside of the stomach, bowel
and so on), replacement of the eye lens (usually because of cataracts) and childbirth (including
caesarean sections).
Institutional health care refers to the facilities and services offered by general hospitals (also called
acute-care hospitals), psychiatric hospitals, nursing homes and hostels, and ambulance services.

Public and private acute-care hospitals

Acute-care hospitals include public and private hospitals that provide medical, surgical and obstetrical
(pregnancy and childbirth) care for inpatient treatment, with 24-hour nursing services. State and
territory governments retain the major responsibility for the operation of the public hospital system.
Private hospitals are conducted by religious and charitable organisations as well as by proprietors
operating for profit.

Psychiatric hospitals
Psychiatric hospitals are devoted mainly to the treatment and care of admitted patients with
psychiatric, mental or behavioural disorders. Reforms under the National Mental Health Strategy
introduced in 1992 meant that their role declined in the early to mid-1990s. This change reflects the
moves made to take mental health services out of institutions, and to integrate hospital services with
care in the community setting. There is still a small need for some people with mental illnesses to have
access to full-time care, and there are also short-stay specialised psychiatric units available.

Nursing homes and hostels

Nursing homes provide long-term nursing care for
chronically ill, frail or disabled persons. Many elderly
people require the services provided within a nursing-
home setting. Despite this, current government policy
is aimed at redirecting the elderly into hostel settings,
and to providing more community-based care through
services such as home nursing, meals and transport.

Emergency departments
Public and private hospitals also provide emergency
department services. The types of services provided
in each hospital may reflect a number of factors,
including the availability of other health care services,
patterns of disease and injury, and the generally
poorer health of Aboriginal and Torres Strait Islander
peoples, who have higher population concentrations
in remote areas.

Outpatient care and other non-admitted care

Individuals may receive services through specialised
public hospital outpatient clinics, which provide
allied health, obstetrics, oncology, dental,
orthopaedic and other medical services. Additional
non-admitted care provided by public hospitals
includes pathology, pharmacy, community health
Figure 3.6 Nursing homes provide long-term nursing care for
and radiology and organ imaging.
chronically ill, frail or disabled persons


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Specialised health services
Specialised health services are provided by specialists in private practice, as well as medical services
for private patients in public and private hospitals. These services included pathology (such as the
collection of specimens), specialist attendances and diagnostic imaging items.

Specialist medical practitioners

Specialist medical practitioners provide specialist services in private practice as well as medical
services for private patients in public and private hospitals. Some of these specialist services include:
obstetricsthe surgical specialty dealing with the care of a woman and her offspring during
pregnancy and childbirth
anaesthesia the use of anaesthetics to temporarily reduce or take away sensation, usually so that
painful procedures or surgery can be performed
pathologythe study and diagnosis of disease through examination of organs, tissues and bodily
diagnostic imagingthe use of techniques and processes to create images of the human body for
medical procedures seeking to reveal, diagnose or examine disease
radiotherapythe medical use of ionising radiation as part of cancer treatment to control malignant

Specialised mental health services

Mental health is a matter of national importance. It is estimated that one in five Australians will
experience mental illness at some stage in their lives and that over 1 million people have a disabling
psychiatric condition. There are a variety of public and private health service providers for mental
health care. They include GPs and specialised mental health services, such as private psychiatrists,
community-based public mental health services, public and private psychiatric hospitals and
specialised residential mental health services.
Depression is the most common mental illness managed by GPs, followed by sleep disturbance
and anxiety. Services also include visits with psychiatrists, clinical psychologists, GPs and other allied
health professionals. More females than males use mental health services.

Sexual and reproductive health services

A range of clinical, community education and professional training services in sexual and reproductive
health is provided by family planning organisations. Clinical services include contraceptive services,
counselling and information services, early intervention and health promotion services, and the
management of sexual and reproductive health.

Alcohol and other drug treatment services

Alcohol and other drug treatment services cover a wide variety of treatment interventions and are
provided in both residential and non-residential settings. Services provided can include detoxification
and rehabilitation programs, information and education courses, and pharmacotherapy and
counselling treatments.

National Diabetes Services Scheme

The National Diabetes Services Scheme (NDSS) contributes money to the supply of specialised
equipment to people with diabetes registered with the scheme. It is funded by the Australian
Government and managed through Diabetes Australia Ltd, which coordinates the supply of products in
all states and territories.

Hearing services
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Most hearing services are provided by private practitioners. The Australian Government also provides
free hearing services to:
anyone under 21 years of age
Aboriginal and Torres Strait Islander peoples aged 50 years and over
adults with special needs
those living in remote locations.


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Palliative care services
People who are terminally ill require specialised care called Research and Review
palliative care. This type of care takes a holistic approach 1 Describe how the range and types of health
that focuses on maintaining quality of life and reducing the care have changed and how they reflect the
suffering a patient may experience. Palliative care services public health approach.
may be provided in a variety of settings, such as in acute
hospitals, designated palliative care units (hospices) and in
2 a Identify the numerous organisations
involved in health care.
the community.
b Discuss why it is necessary for a wider
Health services in the Australian Defence Force variety of groups and organisations to play
Australian Defence Force (ADF) personnel are provided a role in health care in Australia.
with an extensive range of health services, including 3 Describe the major areas that make up:
emergency, acute and ongoing clinical care; rehabilitation; a institutional health care.
health screening; occupational fitness assessment; and
b non-institutional health care.
preventative health activities. Primary health care is also
provided by medical, dental and nursing officers; allied 4 Describe how the role of nursing homes and
health personnel; and medical assistants. psychiatric hospitals is changing.
5 Explain the difference between nursing homes
and hostels.

Responsibility for health facilities and services

The health care system in Australia is complex. Responsibility for the funding and
delivery of health services is split among all levels of government, and among
many groups within the public and private sectors.

Public sector
Under the Australian Constitution the Commonwealth Government has very little
direct responsibility for the delivery of health services; this responsibility is
Medicare was introduced in 1984
limited to repatriation hospitals. The main role of the Commonwealth Government
and the PBS has been in place
is to provide funding to the state and territory governments for them to deliver
appropriate health services to their populations. In recent years, however, the for more than 60 years.
Commonwealth has expanded its role, introducing and controlling schemes
such as Medicare and the Pharmaceutical Benefits Scheme, as well as health
promotion initiatives that focus on issues such as mental health, alcohol and HIV/
AIDS. The Commonwealth Government shares with the states the responsibility
for occupational health policy and standards. Managing Worksafe Australia is
another Commonwealth role.
Responsibility for delivering the majority of health services lies mainly with
state and territory governments. These governments administer public acute-
care hospitals and public psychiatric hospitals. They also develop the legislation
and regulations under which private hospitals, nursing homes and health
professionals operate. State and territory governments manage mental health
programs, dental health services, home and community care, family health
services and rehabilitation programs.
The health care responsibilities of local government are more related to
personal preventative areas; for example, immunisation programs. They are
also largely responsible for the enforcement of environmental health and
hygiene regulations. The states draw up the regulations, and local government
enforces most of them. Local government is also responsible for some home-care
operations and community health centres.


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Ad arch
res Pu
c ho


tio rit


Funding source

people Australian Government

& p unity
hea c
State/territory and local governments



s ubl

d Private or out of pocket


an r
te cto

rv tal
l se

Priva se Indirect funding by subsidies or rebates



r Service responsibility
Public sectorstate/territory governments
Private sector
Combined private sector/state/territory/
local government/Australian Government

Source: AIHW, Australias Health, 2008

Figure 3.7 Range and types of heath services and facilities

The range and types of health facilities and services in Private sector
Australia are illustrated in Figure 3.7. The outer ring in the
All the preceding governmental roles are carried out in
diagram illustrates the different funding sources for each
association with a health system that is largely private in
service. The next ring shows the major groups of services that
nature. Private hospitals, private specialist doctors and
comprise the health system. The health system is made up of:
private GPs make up the majority of the services provided
public hospitals by the health care system. The private sector also provides
private hospitals a range of other health services, such as physiotherapy,
dental services dentistry, pharmacy, chiropractic services, optometry and
medications radiology. Larger organisations within the private sector
community and public health also deliver a broad range of health services. Examples
community nursing of private sector, non-profit health organisations are the
public health education campaigns Spastic Centre of NSW, Cancer Council, Royal Blind Society,
medical services National Heart Foundation, Diabetes Australia, Royal Life
general practice Saving Society, Salvation Army and Red Cross.
specialist care
pathology and medical imaging Equity of access to health facilities
patient transport and aids
other health professionals, such as physiotherapists
and services
and psychologists Access to health services and facilities is essential to health
administration and research and well-being. The cornerstone of Australias health care
state departments of health system is Medicare. Medicare is designed to allow simple
hospital or community health administration research and equitable access to all Australian citizens regardless of
PDHPE Application and Inquiry

and its funding. location and socio-economic status. Supporting programs,

The darker arc inside the circle shows whether the such as the Medicare Safety Net and Pharmaceutical Benefits
service is provided by the private sector, public sector Scheme, are also in place to promote equity of access.
or both. Examples of private sector providers include Although, in principle, equity of access is the intention,
individual medical practices and pharmacies. Public some individuals and groups continue to find it difficult
sector providers include public hospitals and a mixture of to access appropriate health services and facilities.
community and public health services. Medicare does not fully cover, or provide access to,


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a range of medical services that are vital for maintaining good health. This places people of low socio-
economic status at a disadvantage. General dental services, speech therapy, physiotherapy and some
optometrical services are examples of health care services that, for many, might not be accessible due
to financial constraints.
Access to health services has also been hampered in recent years by overcrowding and lack of bed
availability in public hospitals. For many years there has been community dissatisfaction with long
waiting lists for elective surgery and with over-burdened public health services. The article below
suggests a variety of strategies to improve the Australian hospital system.
Access can also be difficult for people in rural or remote areas. The poorer health status of
Indigenous people and other Australians living in rural or remote areas supports this notion. People
from non-English speaking backgrounds and different cultures might also not take full advantage of the
services available to them. More culturally sensitive health services would be of greater value. Actively
involving these communities in the establishment and delivery of their health services will result in
more effective care and improved health choices.

Fixing the problems that beset the

Australian hospital system
By John M Dwyer to offer services based on its ability to would be more effective
Public hospitals need an injection guarantee quality and safety Senior doctors should be
of cash to help reduce demand for Poor urban planning has encouraged, and financially
hospital services; networking and seen the development of smaller remunerated, to spend more time in
role delineation among hospitals hospitals in close proximity to each their hospitals helping to improve
would immediately increase safety other. These should act as a single the quality of decision making
and quality. hospital on split sites, offering We need to develop a
While most patients in our excellence at each site, but not mutually beneficial partnership
public hospitals receive a very high duplication Instituting and between public and private
standard of care, the incidence of improving interhospital transport hospitals. With additional funding,
misadventure [accidents] and the will be an essential ingredient of public hospitals that do not have
inequities that currently exist are such an integrated hospital system. any additional capacity could
unacceptable. These problems are Commonsense changes like purchase services for their patients
a product of a workforce crisis, these do require political leadership from private hospitals.
ever-increasing demand for hospital and public understanding We However, the public hospital
services from ever-sicker patients, would be promising our patients system needs a major and
and too many episodes where the that, wherever they entered the immediate injection of cash
clinical needs of a patient are not public hospital system, we would The next Australian Health Care
attended to by suitably skilled staff. ensure that they are given the Agreements must represent both
This last problem is a feature of a highest quality care, even if that an instrument for these reforms
political climate in which warnings means moving them to a more and a return to the 50/50 funding
by hospital clinicians that a hospital appropriate facility. split for the federal and state
cannot provide a quality service Public hospital clinicians governments, as was mandated at
(such as an intensive care unit) [feel that] budgetary control the inception of the scheme.
are too often ignored for fear of dominates the thinking and actions Additionally, these reforms must
community anger about that service of hospital managers and promotes be accompanied by major efforts to
not being available locally! centralisation that removes reduce demand for hospital services
Hospitals do not function clinicians from the frontline by focusing on disease prevention,
optimally with occupancy rates environment Clinicians are the maintenance of wellness, and
that exceed 85%, yet many extremely frustrated when their earlier diagnosis and treatment of
regularly exceed 100%. In very concerns cannot be addressed potentially chronic diseases.
busy, inadequately staffed hospitals, by inhouse administrators with Our health care system
communication breakdowns all too decision-making power Up- needs dollars, reform, public
often compromise safety. front bonuses may attract some understanding of the rationale for
Solutions nurses to return to work, but changes needed and, most of all,
[Too many hospitals] are expected flexible working conditions with political courage
to provide a broad array of quality support and mentoring replacing
Medical Journal of Australia,
services. Each hospital should be able bullying and excessive workloads
Vol. 189, No. 4


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practical application Research and Review
Non-institutional health care 1 Discuss four factors that affect access to health
Conduct a research project within your school or class. services and facilities.
Ask participants to provide information on their use 2 Identify the trend and reasons for the trend of
of non-institutional health care during the last year. the following measures of hospital use:
Non-institutional health care encompasses services a admission rates
provided by doctors, dentists and other health b average length of stay
professionals; community health services and public c occupancy rates
health services; and health goods (pharmaceuticals d same-day surgery.
and aids and appliances). 3 a Outline the most commonly used medical
b Describe the trend in use of these services.

Critical inquiry 4 Identify the most common reasons for visits to

GPs by:
a males
1 Read the article on page 61, then complete the b females.
following tasks:
5 Explain why there has been an increased
a Identify the misadventures and inequities in demand for dental services.
the Australian hospital system highlighted by
Emeritus Professor Dwyer. 6 a Discuss the link between socio-economic
status and dental health.
b Identify the solutions proposed by Dwyer. b Describe steps that can be taken to address
c Evaluate if the solutions identified above this inequity.
would improve the issues of access and
adequacy in relation to social justice
7 Two of the most common reasons for people
consulting health professionals are eye disorders
and back pain. Discuss the social causes for this.
d Describe how equitable the access and
support is for Australian hospitals, as 8 a Identify the health care services most
proposed by Dwyer. relevant to you at this point in your life.

e Draft a letter to Emeritus Professor Dwyer b Are they easily accessible?

discussing your support for or opposition to

c Is the quality of service adequate?

his solutions. Propose relevant solutions that

may support Dwyers ideas.

Health care expenditure versus early intervention

and prevention expenditure
In 200506 Australia spent $1 in every $11 on health, totalling $86.9 billion, or 9.0 per cent of gross
domestic product (GDP), which is a basic measure of a countrys economic performance. The majority of
health expenditure is on health goods and services, such as medications and hospital care. The Australian
Institute of Health and Welfare reports on health expenditure in terms of who spends the money, whereas
health funding is reported in terms of who provides the funds that are used to pay for health goods and
A major matter of consideration for all levels of government is the delicate balance of treatment versus
early intervention and prevention. In recent times significant steps have been taken in the area of health
promotion and illness prevention. Health promotion and prevention programs were supported by an
PDHPE Application and Inquiry

increase in funding during the 1990s. Despite this increase, more than 90 per cent of government health
expenditure is still allocated to curative services. With Australias leading causes of death and illness
being lifestyle-related, the argument that prevention will be more cost-effective than cure has gained
considerable support.
Prevention programs that have been implemented include school medical and dental services,
immunisation programs, the fluoridation of water supplies, anti-smoking campaigns, the National
Campaign Against Drug Abuse, the National Mental Health Strategy and the National HIV/AIDS Program.


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Organisations such as the Heart Foundation, the Cancer Council and the Asthma
Foundation also make significant contributions to illness prevention. Despite the
strength of the arguments supporting an increase in preventative measures over
curative, there seems little hope for a significant shift in government expenditure
in the short term. Governments are reluctant to cut back on funding to curative
health services and divert it towards preventative strategies. The reason for this
is that the results, especially financial savings, are not seen in the short term.
Therefore, such a change might not be economically viable. For example, a large
amount of expenditure dedicated to reducing the number of young people who
smoke or to limiting sun exposure will not be reflected in lower cancer ratesand
resultant financial savingsfor 1530 years. For a government currently in office,
that expenditure might be more beneficial politically if used to shorten hospital
waiting lists or to provide for other over-burdened curative services.
It is extremely difficult to withdraw curative health services because they are
currently stretched to their maximum to meet the needs of the population. In recent
years the controversy surrounding cutbacks in curative services (such as hospital
bed closures and shifting of hospital services to new developing areas) has shown
how politically sensitive health care delivery is for a government.
A strong argument put forward by many health organisations is that a source of
additional funding for prevention is the extensive government revenue from tobacco
and alcohol taxation. Currently only a small amount of taxation revenue from these
areas is devoted to preventative programs.

Critical inquiry
1 a Governments are reluctant to divert money from curative to
preventative measures because it might not win them votes at the
ballot box. (For example, closing a hospital or decreasing hospital bed
numbers could be politically costly.) What is your opinion of this?
b Are there other reasons for so much health expenditure being devoted
to cure and so little to prevention?

Research and Review

1 Some people believe that the current health system in Australia will not
be sufficient in the future. Explain why this belief is held by some people.
Do you agree with them?
2 a Describe the strategies that have been considered to support the
cost of the health system.
b Identify the most recently introduced strategies designed to ease
the burden on Medicare.
c Discuss to what degree these recently introduced strategies have
been successful.
3 Over 90 per cent of health expenditure is devoted to curative services.
Identify three examples of curative treatments (for example, removal of
a skin cancer) and two health promotion strategies designed to prevent
the occurrence of the conditions that you choose (for example, the
No Hat, No Play policies in schools).
4 Discuss the factors that prevent governments from devoting more
funding to prevention strategies.


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Impact of emerging new treatments A good measure of health costs is to estimate health
costs as a percentage of Australias wealth (GDP). Australia
and technologies on health care spends about 9 per cent of GDP on health care. Australias
Health care funding is a very complex matter, and it is easy health to GDP ratio in 2005 was comparable to Italys
to make errors in interpreting data on health expenditure. (8.9 per cent) and New Zealands (9.0 per cent). It was more
For example, if a comparison is made between the amount than that of the United Kingdom (8.3 per cent) and much
spent on health care 20 or 30 years ago, and the amount lower than that of the United States (15.3 per cent), which
spent today, the first impression is that health care costs had by far the highest ratio. This proportion of GDP spent
are rising very steeply. For example, health expenditure on health has been fairly steady over the past 20 years.
today is more than twice as great as in 197273. So, it would seem that Australias health care costs have
However, allowance has to be made for several factors. been fairly well contained for some time. In recent years,
These include: however, there have been some more worrying signs.
Population increaseAustralia must expect to pay more Between 199495 and 199697, expenditure on health
to look after more people. services grew, in real terms, by an average of 4.1 per cent.
InflationOne billion dollars spent in the last decade This was above the average of the previous five years
was worth much more than a billion dollars spent now. (3.3 per cent) and the long-term (197576 to 199495)
Australias wealthMeasured as gross domestic product, average growth rate of 3.5 per cent.
the countrys wealth has increased in the last 20 years, According to this assessment, we should expect some
and health would seem to be a good area on which to increase in health expenditure, but the rate of increase
spend the extra wealth. is, itself, beginning to increase. That is, while we should
Medical research and technologyThese have produced expect to be spending moreeven allowing for population
many wonderful new treatments, but they can be growth, inflation and a growth in Australias wealth
expensive. If we wish to use these newer treatments (and (GDP)our health expenditure is starting to accelerate
few people refuse them when they or their loved ones faster than we might have expected. This more recent
are ill), we should expect health expenditure to increase. increase has caused some health economists to become
Ageing populationThe population is getting older, and concerned about whether Australias long-term health
older people require more medical care. budget can be sustained.
For all these reasons, and others, it is not surprising that
health expenditure has increased over the past 20 or 30 years.
Figure 3.8 Australians are visiting the doctor more often
PDHPE Application and Inquiry


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It seems that three factors are responsible for this more
recent increase: Critical inquiry
more expensive medical treatments
more visits to doctors and other health care 1 Describe the trend you believe health
professionals by people of all ages expenditure will take in the next 10 years.
the increasing age of the population.
All these factors seem likely to continue, which is why
2 Discuss whether the current funding system is
sufficient to cope with future changes.
some health economists are beginning to worry. Medical
research continues to develop new procedures for 3 Propose funding changes that might need to be
investigation and treatment. A better informed population introduced.
has greater awareness of health matters and the
importance of screening and preventative measures, and
therefore attend doctors more often. Some of the benefits
of early detection include less invasive treatment, less cost Research and Review
to the individual and community and greater chance of 1 Describe the responsibilities of the different
recovery. Along with this, the population continues to age. levels of government and the private sector in
The government sets the Medicare rebate schedule, respect of health expenditure.
and the government decides which medical procedures 2 a Describe the trend in expenditure on
will be covered by Medicare. Bulk-billing allows easy health care.
access to doctors, and can encourage overuse of doctors by
b Discuss the factors that have contributed
patients for trivial matters. It can also allow some doctors to
to this trend.
over-service; that is, provide services that are not strictly
necessary, thus increasing the income of those doctors. 3 Discuss the major areas where Australias
health dollar is spent.
It is estimated that total health expenditure will increase
by 127 per cent over the next three decades and it is 4 Using an Excel spreadsheet, construct a pie
projected that it will increase from 9.4 per cent of GDP to 10.8 chart detailing the institutional and non-
per cent. These estimates should be interpreted with caution institutional health expenditure as components
as the projected outlook for some diseases may drastically of total health expenditure.
change due to developments in health technologies
and health service use and advances in prevention and

Health insurance: Medicare and private

Medicare is health insurance that ensures all Australians have access to free or low-cost medical,
optometrical and hospital care. Australians are also free to choose private health services.

Medicare was introduced in Australia in 1984 as a national system of health care funding.
It is designed to protect people from the huge costs of sickness and injury by providing free or
subsidised medical care, and free hospital treatment in public hospitals. All Australian residents
are eligible for Medicare benefits. Short-term overseas visitors are not eligible unless they are from
a country with which agreements have been made between governments.
The three principles upon which Medicare is based are:
#Through the Medicare system
every Australian resident is
Medicare is funded from general taxation revenue plus an additional contribution guaranteed adequate health
known as the Medicare Levy. The Medicare Levy is 1.5 per cent of each taxpayers income, care at minimum cost.
and people pay it in addition to their ordinary income tax. Individuals and families on
higher incomes may have to pay a 1 per cent surcharge in addition to the Medicare Levy
if they do not have private health insurance. The government introduced this change in the hope
of encouraging more financially able people to take out private health cover, and thus ease the
pressure on the public health system. It seems that this strategy had little effect and a further
incentive to take out private health insurance was introduced in 1999. This strategy was a 30 per
cent rebate on health fund premiums, regardless of income.


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Medicare has established a schedule of fees for medical Medicare Safety Net
services provided by private practitioners. The amount of the To protect people who require a large number of medical
benefits provided by Medicare for medical services relates services, the government has put in place a Medicare Safety
to the Medicare Benefits Schedule (MBS). The MBS sets Net. Once a person has paid gap amounts totalling a
down fees determined by the government to be fair to both certain amount (about $365) in a calendar year, any future
patient and doctor. Although the MBS is used as the basis for Medicare benefits increase to 100 per cent of the MBS fee.
calculating Medicare benefits, it is not binding on the doctor. The Medicare Safety Net does not cover any charge above
Medical practitioners often charge above the MBS fee for the MBS fee.
services. The difference between the medical practitioners
Medicare provides
charge and the MBS fee is known as the gap. Rather than
charge the patient the full MBS fee, some doctors agree to
accept the patients Medicare rebate (7585 per cent of the
benefits for almost 200
million individual services #
The difference between the
each year. Table 3.3 provides
full MBS fee) as full payment of the doctors account. The medical practitioners charge
details of where these
doctor sends a form to Medicare in which the patient assigns
benefits were allocated in and the MBS fee is known as
this benefit directly to the doctor. This practice is called
200607. the gap.
bulk-billing or direct billing and enables the service to be
provided to the patient free of charge.

Table 3.2 What does Medicare cover?

Medicare does cover Medicare does not cover

85 per cent of the MBS fee for out-of-hospital services General dental services
provided by registered medical practitioners (for Private patient hospital costs
example, GPs, specialists, X-rays, pathology tests) (other than dental examinations and treatment)
75 per cent of the MBS fee for medical services Ambulance
provided in-hospital
Home nursing
85 per cent of the cost of eye tests
The full cost of accommodation and treatment by
Speech therapy
hospital-appointed doctors for public patients in
recognised public hospitals Chiropractic services
The full cost of X-rays and pathology tests for public Podiatry
patients Psychology
75 per cent of in-hospital medical procedures performed Acupuncture
by oral surgeons (general dental services are covered Glasses and contact lenses
by Medicare)
Hearing aids
Free out-patient services in some public hospitals
Some medical costs incurred overseas

Table 3.3 Allocation of Medicare benefits

Items per person Average Items in 200607

change Number Proportion paid
Number (%) (000) of total (%) ($ million)

Broad type of service 200405 200506 200607

Non-referred medical 4.83 4.91 4.93 1.0 103 433 90.6 4029.6
PDHPE Application and Inquiry

Practice nurse 0.13 0.16 0.17 14.8 3 664 3.2 38.9

Optometry 0.25 0.26 0.26 1.9 5 473 4.8 239.8

Other allied health 0.01 0.03 0.07 144.8 1 554 1.4 97.5

Total non-specialist 5.22 5.35 5.43 2.0 114 124 100.0 4405.8

AIHW, Australias Health, 2008


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practical application Research and Review
Medicare 1 Describe the three principles upon which Medicare
is based.
1 Research Medicare, the Medicare Safety Net and
Pharmaceutical Benefits Scheme for the dollar 2 a Explain what the gap is.
amounts for the: b Discuss how it impacts on the health
care consumer.
a Medicare Safety Net
b PBS Safety Net
3 a Describe what the Pharmaceutical Benefits
Scheme is.
c concessional PBS rate b Explain its purpose.
d maximum PBS cost to a general patient. 4 Explain the Medicare Safety Net and PBS Safety Net.
a Who are these designed to protect?
b Discuss how successful they are in protecting
those groups.
Critical inquiry 5 One of the problems associated with Medicare is
1 Propose why some people choose not to take out a Explain what has caused this over-servicing.
private health insurance. b Propose how it can be controlled.
2 The 30 per cent rebate was criticised as being 6 a Discuss why government policy is in favour of
wasteful, and critics claimed that the money Medicare and bulk-billing.
should have been spent on improvements to the b Discuss how these help the government to
public health care system. Do you agree? control costs.

Pharmaceutical Benefits Scheme

The Pharmaceutical Benefits Scheme (PBS) was introduced by the Commonwealth Government in 1986.
This scheme subsidises most prescription medicines bought at pharmacies in Australia. The major
aim of the PBS is to allow all individuals, regardless of socio-economic status, access to necessary
prescription medication.
Concession card holders (for example, holders of Pensioner Health Benefit cards) can purchase PBS
medicines for a lesser amountknown as the concessional rate (approximately $5). General patients
should pay no more than about $32 for each item. Once an individual, or family, has paid a set amount
they are issued with a Safety Net Card. This enables the holder access to prescribed medicines free of
charge, or at the concessional rate, for the remainder of the calendar year.

Private health insurance

Through the Medicare system every Australian
resident is guaranteed adequate health care at
minimum cost. However, many people choose
to supplement this by purchasing private health

What does private health insurance offer?

Since 1984, when Medicare was introduced,
private health insurance funds in Australia have
offered insurance cover for various services
provided in public and private hospitals. They
also offer cover for a range of non-hospital health
and health-related services, such as dentistry,
physiotherapy, podiatry, pharmaceuticals and
People who take out private health insurance have
the choice of one or both of the following forms of
cover: hospital cover and ancillary (or extras) cover. Figure 3.9 Many people choose to take out private health insurance


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Hospital cover
Hospital cover provides benefits for in-hospital treatment practical application
and accommodation for private patients. It includes cover
Private health insurance
for all or part (depending on level of cover) of the costs of
accommodation and related services in a private hospital, 1 Obtain information pamphlets from four of the
or as a private patient in a public hospital. This includes the major private health insurers, which include
difference between the Medicare benefit and the MBS fee. Medibank Private, HCF, MBF, Manchester
However, it does not cover the gap between this amount Unity and NIB. The information must contain
and what the medical practitioner might actually charge. the different levels of cover available and the
Hospital cover also provides for the persons own choice of cost of each. In groups, evaluate which insurer
doctor (instead of the doctor assigned to the patient by the and level of cover would best suit each of the
hospital) and shorter waiting lists for some treatments. following individuals and groups:
a a 21-year-old single male living away from
Ancillary (or extras) cover home
Ancillary (or extras) cover entitles the person to benefits b a 30-year-old married couple with no children
not provided by the Medicare scheme. These extras c a 40-year-old married couple with three
include dental services, physiotherapy, glasses/contact children under 12 years of age
lenses, ambulance and some alternative health therapies
d a 65-year-old retired couple.
and medicines.

Numbers with private health insurance

The introduction of Lifetime Health Cover in 2000
encouraged people to continue private health insurance Critical inquiry
cover throughout their lives. People who join a health
insurance fund before the July following their thirtieth 1 Discuss the role an individual can play in reducing
birthday and maintain their hospital cover pay lower individual and community health care costs.
premiums throughout their lives than those who join later in
life. People aged over 30 years who take out hospital cover
2 Compare Australias health bill with that of various
other countries.
pay a loading of 2 per cent for each year their entry age is
over 30. Fund members who had hospital cover at 1 July 3 Describe the advantages and disadvantages of
2000 and maintain it are exempt from the loading. People Medicare and private health insurance. In your
who were aged 65 years or over at 1 July 1999 are also answer look at cost, choice and ancillary benefits.
exempt from premium loading.
Changes to Lifetime Health Cover were announced in
2006 and were being implemented progressively from 2007.
Under the new legislation, people who keep their health insurance
for 10 continuous years, and remain members, will stop paying a loading.

Complementary and alternative health care approaches

There are many terms used to describe approaches to health care that are outside
the realm of conventional medicine. Complementary and alternative health care
approaches is a group of diverse medical and health care systems, practices and
products that are not generally considered to be part of conventional medicine.

Reasons for growth of complementary and

alternative health products and services
Australians spend approximately $1 billion per year on alternative health care. This
PDHPE Application and Inquiry

amount is increasing. For many years alternative health care approaches were dismissed
as unscientificeven radical and weird. The popularity of alternative therapies is growing,
however, and there is a new sense of acceptance building in the community, and in the
medical field, regarding what are also called complementary therapies. Complementary
therapies are so-called because they are not necessarily designed to replace orthodox
medicine, but are an additional approach that can be used alongside traditional
treatments. Treatments such as acupuncture and osteopathy, and the use of herbal
medicines, are now far more common than they once were.


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Another reason for the growth in alternative medicines
and health care approaches has been the increase in Research and Review
the number of trained personnel as a result of courses
now being provided in some universities. Government- 1 Describe some of the most commonly used
accredited advanced diplomas and tertiary degrees are now alternative health approaches.
available in areas such as naturopathy and osteopathy. 2 Explain why alternative medicines are called
This has served to advance the credibility of these areas in complementary therapies.
the community. 3 Describe the factors that have contributed to
The popularity of alternative medicines and health the increased acceptance and popularity of
care is also linked to a reaction in the community against alternative medicines and approaches.
the use of conventional drug-based medication, and a 4 a Outline how a health consumer can ensure
preference by some people for the holistic approach offered that an alternative approach is of some
by natural therapies. There is no question that conventional value.
medicine saves lives and is extremely successful in acute
and emergency conditions. For chronic conditions, however,
b Describe what recourse the consumer has
if the treatment is unsuccessful.
many people are starting to prefer the holistic approach
provided by natural therapists where diet and lifestyle are
discussed. People are also more aware of the dangers or
side effects associated with some pharmaceuticals, and
are more likely to question the recommendations of doctors Critical inquiry
than they have been in the past.
People are also starting to show a greater interest Should Medicare cover alternative approaches so that
in natural health care because it is designed to prevent socio-economically disadvantaged people can have
illness occurring, whereas conventional medicine is largely access to these treatments? If so, which approaches
reactive. Another reason for the growth of alternative health should be covered?
care is that some private insurers are now recognising
natural therapies and placing them on their benefits list.

Range of products and services available

Provided below is a sample of the alternative health services available. Others include reflexology (using pressure points on
the feet to stimulate the circulatory system) and iridology (examining the iris of the eye to assess health status).

Acupuncture is based on ancient Chinese beliefs that propose that energy (chi) flows through the body via meridians.
Meridians cross the surface of the body and are said to be linked to the major body organs. Through the painless insertion
of very fine needles into the skin at certain points along the meridians it is believed that health benefits can result.
Acupuncture is widely used for pain relief and also to manage conditions such as asthma.

Chiropractic treatment
The aim of chiropractic treatment is to relieve pain and improve health through the manipulation of the spine. The basis of
this treatment is the theory that many ailments are the result of poorly aligned vertebrae. Chiropractors believe that because
the nervous system controls the body, adjusting the spine can deliver health benefits to other body parts.

Osteopathy involves manual deep-tissue massage and the manipulation of the spine, joints and surrounding tissue
to alleviate back pain, joint problems and muscular disorders. Osteopathy is based on the principle that the well-
being of an individual depends on the skeleton, muscles, ligaments and connective tissues functioning together

Naturopathy involves treating the whole person by harnessing the bodys natural ability to heal itself.
Naturopaths will often adopt a variety of therapies tailored to meet individual needs. These can
include massage, relaxation techniques, herbal medicine and nutrition.


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Herbal medicine
For thousands of years many cultures have used plants and Critical inquiry
plant extracts to form the ingredients of herbal medicines.
Naturopathy practice today uses herbal medicines to treat 1 Critically analyse the complementary and
the individual, not necessarily the disease. The total lifestyle alternative health care approaches by addressing
of the individual is analysed before herbal medicines are the following tasks.
prescribed. a Discuss how you know who to believe.
Homoeopathy b Discuss what you need to do to help you make
informed decisions.
Homoeopathy was developed in the eighteenth century.
It is based on the notion that substances (usually herbal
or mineral) that produce symptoms of illness in a healthy
person will cure that same illness in a sick person. Patients practical application
are given very small doses of substances.
Complementary and alternative health care
Yoga Conduct a research project on the methods and
effectiveness of one alternative health care approach.
Yoga has been found to reduce stress and lower blood
As a part of the research, conduct an interview with
pressure through a combination of breathing exercises,
an alternative health care practitioner whose name
physical postures and meditation. Many exponents of yoga
appears on the list of accredited practitioners as
claim that it provides a greater feeling of overall well-being.
maintained by the Australian Natural Therapists
Association. From the information gathered, write an
Aromatherapy article for your next school newsletter.
Sometimes used to treat stress and skin disorders,
aromatherapy involves a combination of specialised
massage techniques using blends of different oils.
The benefits of aromatherapy are claimed to be holistic, Research and Review
covering all aspects of health, including the physical, social 1 Identify whether any alternative approaches
and emotional aspects of an individuals life. appear false to you. Provide reasons for
your answer.
How to make informed consumer 2 Discuss the reasons for the success of quacks
choices in exploiting some people.

Despite the increased acceptance of alternative health

3 Outline the skills and knowledge that individuals
need to help them make informed health
care approaches there are still many treatment options
care decisions.
promoted as cures or remedies that have been designed
by unscrupulous dealers attempting to take advantage of
people desperate to obtain relief from ailments.
The website of the Australian
Much health information is false and promoted by people who are WEB Natural Therapists Association
motivated by short-term financial gains. Such people are called quacks.
can be accessed via
They sometimes promise quick cures on a money-back-guaranteed basis,
and often support their products with personal testimonies and anecdotal
evidence. With the wealth of information now available in relation to health
improvement, it can be difficult to know which health information is reliable.
Unfortunately, many quacks are very convincing salespeople and exploit
vulnerable people who desire quick health gains and improved quality of life.
In assessing alternative health care approaches, it is vital that
individuals put thought and time into selecting a natural therapist.
Ensure the practitioner is accredited before using the services.
PDHPE Application and Inquiry

The Australian Natural Therapists Association has a list of

accredited practitioners who have signed a code of ethics.


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summary 3

Chapter summary Complementary therapies are so called because they

are not necessarily designed to replace orthodox
The role of health care is to achieve a balance medicine, but are an additional approach that can be
between resources for prevention and resources used alongside traditional treatments.
for treatment.
Health care is the responsibility of many
organisationspredominantly the different levels of
Revision activities
government in collaboration with the private sector. 1 Describe the range and types of health facilities and
services available.
The role of health care is no longer simply curative,
but is concerned with ensuring an improvement in 2 Describe the role of public health services.
the health of the population as a whole through a
3 Outline the specialised health services for:
combination of preventative strategies and clinical
medical care. a mental health

A mix of public and private sector providers deliver

b sexual and reproductive health
health services. c alcohol and other drug treatment

Most people visit their general medical practitioner d diabetes.

when they are unwell. 4 Describe who is responsible for health facilities
Public hospitals can be used by visiting an and services.
emergency department, through the ambulance
services or after referral from a medical practitioner.
Extension activities
Health services are categorised into public health
1 Evaluate health care in Australia in relation to social
services, hospital services, primary care and
justice principles.
community health services, and specialised health
services. 2 Describe the advantages and disadvantages of
Medicare and private health insurance.
Responsibility for the funding and delivery of health
services is split between all levels of government, 3 Critically analyse complementary and alternative
and among many groups within the public and health care approaches.
private sectors.
Responsibility for delivering the majority of
Exam-style questions
health services lies mainly with state and territory
1 Discuss the advantages and disadvantages of private
health insurance for both the individual and the
The health care responsibilities of local government community. (10 marks)
are more related to personal preventative areas;
for example, immunisation programs. 2 There is a range of health services and information
available to the individual. Justify the factors you
Medicare is designed to provide all Australian
would consider when deciding on the suitability of
citizens, regardless of their location or socio-
health services and information. (10 marks)
economic status, with simple and equitable access
to health care. 3 Outline the cost of ill-health to the Australian
community. (6 marks)
The majority of health expenditure is on health goods
and services, such as medications and hospital care. 4 Propose the reasons for the growth of alternative
Medicare was introduced in Australia in 1984 as a
health care approaches in Australia. (8 marks)
national system of health care funding. 5 Explain why some Australians may choose to take
The Pharmaceutical Benefits Scheme subsidises out private health insurance. (8 marks)
most prescription medicines.


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