Equity of health care in Australia

Abstract

This paper examines the equity characteristics of health care financing and delivery in Australia and compares its performance with recent findings on systems in Europe and the United States. Vertical equity of finance is evaluated with income and payment concentration indices derived from published survey data on taxes and expenditure by income decile. Horizontal equity of health care delivery is assessed with standardized expenditure concentration coefficients for three measures of health status and four types of health services, derived from household survey data on health care utilization, health status, income and demographics. Health cover is available to the entire population. Results show the financing system is slightly progressive despite the fact that 30% of payment comes from private sources, which are regressive. The equity index compares favorably to many European countries and is much better than the U.S. which has a regressive financing system. The Australian system fares less well in terms of equity of health care delivery. Several features favor privately insured higher income persons in use of health care and this is reflected, for some health status measures and types of service, in inequity favoring the better off. This contrasts with inequity favoring the less well off in many European countries and the U.S. This analysis provides a benchmark for monitoring the equity of the Australian system and provides information on the equity of a mixed private and public financing system that covers the entire population. This is relevant to the U.S. which is moving in this direction by extending private cover to the uninsured and to European countries that are increasing private sector involvement in health care financing.