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The Australian health system

Australia’s health system is one of the best in the world, providing safe and
affordable health care for all Australians. It is jointly run by all levels of Australian
government – federal, state and territory, and local.

Aust ralia’s healt h syst em is one of t he best in t he world. It provides qualit y, safe and affordable
healt h c are for you and your family. It ’s a key reason why we enjoy one of t he longest life
expec t anc ies in t he world.

There are many providers of healt h c are in Aust ralia, inc luding:

primary c are servic es delivered by general prac t it ioners (GPs)

medic al spec ialist s

allied healt h workers

nurses

Medic are and t he public hospit al syst em provide free or low-c ost ac c ess for all Aust ralians t o
most of t hese healt h c are servic es. Privat e healt h insuranc e gives you c hoic e out side t he
public syst em. For privat e healt h c are bot h in and out of hospit al, you c ont ribut e t owards t he
c ost of your healt h c are.

Medicare — the foundation of our health system

Medic are has been Aust ralia’s universal healt h c are sc heme sinc e 1984. It s 3 major part s are:

medic al servic es

public hospit als

medic ines

Medic are is available t o Aust ralian and New Zealand c it iz ens, permanent resident s in Aust ralia,
and people from c ount ries wit h rec iproc al agreement s.
Medic are c overs all of t he c ost of public hospit al servic es. It also c overs some or all of t he
c ost s of ot her healt h servic es. These c an inc lude servic es provided by GPs and medic al
spec ialist s. They c an also inc lude physiot herapy, c ommunit y nurses and basic dent al servic es
for c hildren.

The ot her import ant part of Medic are is t he Pharmac eut ic al Benefit s Sc heme (PBS). The PBS
makes some presc ript ion medic ines c heaper.

The Medicare Benefits Schedule

The Medic are Benefit s Sc hedule (MBS) is a list of all healt h servic es t hat t he Government
subsidises. A t eam of medic al expert s keeps t he list up t o dat e, safe and best prac t ic e.

The MBS has a safet y net . It c an help by making sure you pay less for servic es onc e you reac h
a c ert ain amount of out of poc ket c ost s. This might be t he c ase if you have a year where you
pay a lot for medic al c are. Find out more about t he Medic are Safet y Net .

The Pharmaceutical Benefits Scheme

The PBS helps make medic ines c heaper. Wit hout t he PBS, medic ines would be more expensive.
In some c ases, t hey would c ost t ens of t housands of dollars more.

The PBS list s brand name, generic , biologic and biosimilar medic ines. There are over 5,200
produc t s on t he PBS. All produc t s are shown t o be safe and effec t ive before being sold in
Aust ralia. Independent medic al expert s advise on what is added t o t he PBS.

You only pay some of t he c ost of most PBS medic ines if you are enrolled in Medic are. The
Aust ralian Government pays t he rest . You pay even less if you have a c onc ession c ard.

If you spend lot s on medic ine, t he PBS Safet y Net helps keep c ost s down. When you reac h t he
Safet y Net Threshold amount , presc ript ions will c ost even less for t he rest of t he year.

Private health insurance

Many Aust ralians have privat e healt h insuranc e c over. There are 2 kinds of c over:

hospit al c over for some (or all) of t he c ost s of hospit al t reat ment as a privat e pat ient

general t reat ment (‘anc illary’ or ‘ext ras’) c over for some non-medic al healt h servic es not
c overed by Medic are — suc h as dent al, physiot herapy and opt ic al servic es.
Some people wit h privat e healt h insuranc e have eit her hospit al c over or ext ras c over, and
some people have bot h.

The Government provides a means-t est ed rebat e t o help you wit h t he c ost of your privat e
healt h insuranc e.

Primary health networks

Primary healt h net works (PHNs) are organisat ions t hat c oordinat e healt h servic es in loc al
areas. There are 31 PHNs ac ross Aust ralia.

PHNs:

support c ommunit y healt h c ent res, hospit als, GPs, nurses, spec ialist s and ot her healt h
professionals t o help improve pat ient c are

c oordinat e different part s of t he healt h syst em — for example, bet ween t he hospit al and GP
when a pat ient is disc harged

assess t he healt h needs of t heir loc al area

provide ext ra servic es t hat are needed, suc h as:

aft er-hours servic es

ment al healt h servic es

healt h promot ion programs

support for primary c are (GPs), inc luding c ont inuing educ at ion

Government responsibilities

The Aust ralian, st at e and t errit ory, and loc al government s share responsibilit y for running our
healt h syst em.

Australian Government responsibilities

Medic are Benefit s Sc hedule (MBS)

Pharmac eut ic al Benefit s Sc hedule (PBS)

support ing and regulat ing privat e healt h insuranc e

support ing and monit oring t he qualit y, effec t iveness and effic ienc y of primary healt h c are
servic es
 subsidising aged c are servic es, suc h as resident ial c are and home c are, and regulat ing t he
aged c are sec t or

c ollec t ing and publishing healt h and welfare informat ion and st at ist ic s t hrough t he
Aust ralian Inst it ut e of Healt h and Welfare

funding for healt h and medic al researc h t hrough t he Medic al Researc h Fut ure Fund and t he
Nat ional Healt h and Medic al Researc h Counc il

funding vet erans’ healt h c are t hrough t he Depart ment of Vet erans’ Affairs

funding c ommunit y c ont rolled Aboriginal and Torres St rait Islander primary healt hc are
organisat ions

maint aining t he number of doc t ors in Aust ralia (t hrough Commonwealt h-funded universit y
plac es) and ensuring t hey are dist ribut ed equit ably ac ross t he c ount ry

buying vac c ines for t he nat ional immunisat ion program

regulat ing medic ines and medic al devic es t hrough t he Therapeut ic Goods Administ rat ion
(TGA)

subsidising hearing servic es

c oordinat ing ac c ess t o organ and t issue t ransplant s

ensuring a sec ure supply of safe and affordable blood produc t s

c oordinat ing nat ional responses t o healt h emergenc ies, inc luding pandemic s

ensuring a safe food supply in Aust ralia and New Zealand

prot ec t ing t he c ommunit y and t he environment from radiat ion t hrough nuc lear safet y
researc h, polic y, and regulat ion

State, territory and local government responsibilities

managing and administ ering public hospit als

delivering prevent ive servic es suc h as breast c anc er sc reening and immunisat ion programs

funding and managing c ommunit y and ment al healt h servic es

public dent al c linic s

ambulanc e and emergenc y servic es

pat ient t ransport and subsidy sc hemes

food safet y and handling regulat ion

regulat ing, inspec t ing, lic ensing and monit oring healt h premises

Shared responsibilities
The Commonwealt h also shares responsibilit y wit h t he st at es and t errit ories for ot her ac t ivit ies
under nat ional agreement s suc h as t he Counc il of Aust ralian Government s (COAG). These
ot her ac t ivit ies inc lude:

funding public hospit al servic es

prevent ive servic es, suc h as free c anc er sc reening programs inc luding t hose under t he
Nat ional Bowel Canc er Sc reening Program

regist ering and ac c redit ing healt h professionals

funding palliat ive c are

nat ional ment al healt h reform

responding t o nat ional healt h emergenc ies

Find your st at e or t errit ory healt h depart ment .

Loc al government s play an import ant role in t he healt h syst em. They provide a range of
environment al and public healt h servic es, c ommunit y-based healt h and home c are servic es.

Health system challenges

Aust ralian healt h syst em c hallenges inc lude:

an ageing populat ion and inc reasing demand on healt h servic es

inc reasing rat es of c hronic disease

c ost s of medic al researc h and innovat ions

making t he best use of emerging healt h t ec hnologies

making bet t er use of healt h dat a

These c hallenges look set t o c ont inue in c oming dec ades.

Ageing population

A healt hier older populat ion will need different t ypes of healt h servic es. To meet t hese new and
different needs, we will need a flexible and well-t rained healt h workforc e in all areas of t he
c ount ry.

Chronic diseases

Managing c hronic c ondit ions is anot her c hallenge. The rise in many c hronic c ondit ions also
inc reases demand for flexible, person-c ent red t reat ment models.
To address t his, government s are t aking a nat ional approac h t o c oordinat ed c are in t heir
healt h plans and polic ies, inc luding GP-led t eam-based c are for pat ient s wit h c hronic and
c omplex c ondit ions. We c ont inue t o work on ways t o improve sharing of healt h and medic al
informat ion bet ween providers.

Health and medical research

Advanc es in medic al sc ienc e are set t o c omplet ely c hange healt h c are. For example, genomic
t est ing will help doc t ors diagnose healt h c ondit ions and diseases earlier, as well as provide
bet t er prevent ion and t reat ment opt ions for people. But t hese advanc es are very c ost ly and
c ome wit h some diffic ult et hic al and legal issues t hat need t o be worked t hrough.

New technology

New t ec hnologies also have an impac t on healt h and medic al servic es — from digit al healt h
t ec hnologies t o aut omat ed healt h and diagnost ic servic es. These t ec hnologies help t o improve
t he healt h syst em, but t hey c an affec t pat ient s and t he healt h workforc e.

To meet some of t hese c hallenges, t he Aust ralian Government is invest ing in medic al researc h
and t ec hnologic al innovat ion t hrough t he Medic al Researc h Fut ure Fund. This will see more
innovat ions developed, t est ed and made available for Aust ralians in all areas of healt h c are.

Better use of health data

Comprehensive dat a c an help us t o improve healt h polic y, programs and servic es. That ’s why
linking different healt h informat ion ac ross t he healt h syst em is an import ant part of our work.

Other challenges

Aust ralia shares ot her healt h syst em c hallenges wit h c ount ries around t he world — t he rising
c ost of t he healt h syst em, being able t o respond t o new healt h issues, inequalit y in ac c ess t o
healt h servic es and hospit al wait ing t imes.

Cost of health care in Australia

Aust ralia’s healt h syst em is c omplex — and so are it s funding arrangement s. It is funded by:

all levels of government

non-government organisat ions

privat e healt h insurers

 individuals when t hey pay out -of-poc ket c ost s for produc t s and servic es t hat aren’t fully
subsidised or reimbursed

In 2016–17, Aust ralia spent nearly $181 billion on healt h:

41% by t he Aust ralian Government

27% by st at e and t errit ory government s

17% by individuals (for produc t s and servic es t hat aren’t fully subsidised or reimbursed)
9% by privat e healt h insurers

6% by non-government organisat ions

Healt h spending was about 10% of gross domest ic produc t . This means $1 in every $10 spent in
Aust ralia went t o healt h.

The Aust ralian Government usually funds most of t he spending for medic al servic es and
subsidised medic ines. It also funds most of t he $5.5 billion spent on healt h researc h in Aust ralia
in 2016–17.

St at e and t errit ory government s fund most of t he spending for c ommunit y healt h servic es.

The Aust ralian Government and st at e and t errit ory government s share funding of public
hospit al servic es.

Last updat ed: 

7 August 2019

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