Chapter 5 SYSTEMS OF HEALTH CARE DELIVERY
To assist in meeting the health care needs of individuals, the nurse requires an understanding of the health care system. This chapter gives an outline of the Australian and New Zealand health care systems and focuses on health care economics as well as identifying health care settings, health care providers and services. Further focus is given to factors affecting health care delivery, the reasons for quality improvement and explanation of accreditation of health care organisations.
When I had surgery to my hip in the 1960s I was in the hospital for about 6 weeks and had to stay in bed for most of the time. My neighbour has just had her hip done and she was told by the nurses to get up on the second day after the operation, and she was sent home about 2 weeks later. She is lucky because I hated having to stay in the hospital for such a long time away from my family.
Australia has a land mass roughly the same size as Western Europe or the USA (excluding Alaska). Settlement of Australia by people now known as Aboriginal and Torres Strait Islander peoples, or Indigenous Australians, occurred some tens of thousands of years ago (Commonwealth Department of Health and Ageing 2003). Settlement by people from Great Britain and subsequently other countries began in 1788, resulting in the present day population of about 20 million, with a diversity of ethnic backgrounds. About 80% of the population lives in cities (Australian Bureau of Statistics [ABS] 2006). There are large regions that have only small scattered settlements or are unpopulated. Australia is a developed country with a generally high standard of living.
In the 19th century, Australia was governed as a collection of British colonies. Since 1901 Australia has been an independent nation, with a federal system of government that originated from the British Government and law. The Constitution established a Commonwealth (Federal) Government, giving its parliament powers in specified fields. Each of the six states and two territories within the Commonwealth has a parliament; in the states these parliaments have powers in all areas not specified in the Constitution as Commonwealth powers. The Commonwealth, state and territory governments operate on the Westminster system, in which the political party or coalition with the majority of elected members in the lower house of the parliament forms the government (not all state and territory parliaments have an upper house). Ministers with executive powers are drawn from these elected members of government in either lower or upper houses. Within states there are local governments such as municipal and shire councils.
Originally the only Commonwealth health power was in quarantine matters. However, in 1946 the Constitution was amended to enable the Commonwealth to provide health benefits and services, without altering the existing powers of the states. Consequently the two levels of government have overlapping responsibilities in this field. The Commonwealth currently has a leadership role in policy making and national issues such as public health, research and national information management.
The states and territories are primarily responsible for the delivery and management of public health services and for maintaining direct relationships with most health care providers. This includes the regulation of health professionals. The states and territories provide public acute and psychiatric hospital services and a wide range of community and public health services. These include school health, dental health, maternal and child health and environmental health programs.
The state and territory governments directly fund a broad range of health services. The Commonwealth funds most medical services out of hospital, and most health research. The Commonwealth, states and territories jointly fund public hospitals and community care for older people and those with disabilities.
All levels of government (including consumers and the non-government sectors) have some role in funding, administering or providing care for older people. Residential aged care is financed and regulated by the Commonwealth Government and provided mainly by the non-government sector (by religious, charitable and for-profit providers). Currently, the Commonwealth, states and territories jointly fund and administer community care such as delivered meals, home help and transport (Figure 5.1).
Figure 5.1 Tiers of government health care funding
(Crisp and Taylor 2005 (Data from Clinton M, Schwiewe D: Management in the Australian health care industry 2e, with permission, Pearson Education Australia. Copyright 1998)
There is a large and vigorous private sector in health service and the Commonwealth Government considers that strong private sector involvement in health services provision and financing is essential to the viability of the Australian health system. For this reason the Commonwealth Government provides a 30% subsidy to people who acquire private health insurance and has introduced additional arrangements to foster lifelong participation in private health insurance.
Private health insurance can cover private and public hospital charges (public hospitals charge only clients who elect to be private clients so they can be treated by the doctors of their choice) and a portion of medical fees for inpatient services. Private insurance can also cover allied health and paramedical services (such as physiotherapist and podiatrist services) and some aids and appliances such as spectacles. Non-government, religious and charitable organisations play a significant role in health services, public health and health insurance.
The average age of people in Australia and New Zealand is increasing. The number of Australians and New Zealanders over age 65 is increasing more rapidly than that of the general population. It is predicted that ageing populations will demand more health care and financial resources, such as Medicare. Older people are more likely to have complex medical and health care needs, including multiple chronic conditions that may compromise their ability to remain independent. Physical and functional problems, dementia, fixed incomes and limited family or community support can put older people at an increased need for social and health care assistance (Brown et al 2008). In 2003, total life expectancy at birth was 77.8 years for Australian males and 82.8 years for females (Australian Institute of Health and Welfare [AIHW] 2006). The median age of the New Zealand population is rising, as a result, the number of deaths at older ages is increasing. Half of the male deaths in 2000–2002 occurred at ages 75 years and over, while half of the female deaths occurred at ages 81 years and over (Statistics New Zealand, www2.stats.govt.nz).
As indicated above, a mix of public and private sector providers deliver health services. The quality of health care provided is high in both sectors. Most medical officers are self-employed. A small proportion consists of salaried employees of Commonwealth, state or local governments. Salaried specialist medical officers in public hospitals often have rights to treat some clients in these hospitals as private clients, charging fees to those clients and usually contributing some of their fee income to the hospital. Other medical officers may contract with public hospitals to provide medical services. There are many independent pathology and diagnostic-imaging services operated by medical officers. For some allied health and paramedical professions there is a significant proportion self-employed; others are mainly employed by state and local government health organisations.
Public hospitals include facilities established by governments and hospitals, which were originally established by religious or charitable bodies but are now directly funded by government. A small number of hospitals are built and managed by private firms providing public hospital services under arrangements with state governments. Most acute-care beds and emergency outpatient clinics are in public hospitals. Large urban public hospitals provide most of the more complex types of hospital care such as intensive care, major surgery, organ transplants, renal dialysis and specialist outpatient clinics.
Private hospitals are owned by for-profit or not-for-profit organisations such as large corporate operators, religious operators and private health insurance funds. In the past, private hospitals tended to provide less complex non-emergency care, such as simple elective surgery. However, some private hospitals are increasingly providing complex high-technology services. Separate centres for same-day surgery and other non-inpatient operating-room procedures are found mostly in the private sector. Many public hospitals provide such services on the same site as inpatient care.
Specialised mental health care in the public sector is provided in separate psychiatric hospitals, general hospitals and community-based settings. Historically, mental health services have operated separately to mainstream health services, but the Commonwealth, state and territory governments are currently working under the National Mental Health Strategy to mainstream mental health services. Other key reforms taking place under the strategy focus on replacing separate psychiatric hospitals with community-based and general hospital services, and integrating mental health care into different settings.
Australia’s aged-care system is structured around two main forms of care delivery: residential (accommodation and various levels of nursing and/or personal care) and community care (ranging from delivered meals, home help and transport to intensive coordinated care packages for people who otherwise would need residential care). Residential services are mainly in the non-government sector, about half being operated by religious and charitable organisations. Both public and non-government (mostly religious and charitable) sector organisations provide community care services under the Home and Community Care Program.
Medicines or pharmaceuticals prescribed by medical officers and dispensed in the community by independent private sector pharmacies are directly subsidised by the Commonwealth Pharmaceutical Benefits Scheme (PBS). Public hospitals provide medicines to inpatients free of charge and do not attract PBS subsidies. Non-prescription medicines are available from pharmacies and in some cases other suppliers such as supermarkets. The importing and supply of medicines and medical devices is regulated by the Commonwealth Therapeutic Goods Administration (TGA) to ensure the quality, safety and effectiveness of the products.
The Australian Red Cross receives Commonwealth, state and territory government funding to operate Australia’s blood donation system and to coordinate matching of donors and recipients for organ transplants.
Eighty-five per cent of people in New Zealand are concentrated in urban areas. The main ethnic groups are European, Māori, Pacific Islander and Asian. As in many Western countries, a large proportion of the population is slowly growing older. It is projected that in 2031, 22% of the population will be aged 65 or over, compared with only 12% in 1988. Māori and Pacific Islander populations show a younger population structure, with roughly twice the proportion of children under 15 compared with the rest of the population.
The organisation of health and disability support services within New Zealand has gone through several changes within the last two decades. These have ranged from a ‘purchaser–provider’ market-oriented model in place at the beginning of the 1990s, to the more community-oriented model implemented in 2001. At the beginning of the 1990s, Area Health Boards (AHBs) were responsible for the provision of public health, secondary and community care services. AHBs did not provide preventative care services, although preventative care was subsidised by the government. AHBs were introduced under the Area Health Boards Act 1983. The first AHB was established in Northland in 1984 and by 1989 the country was covered by 14 AHBs.
The Health and Disability Services Act 1993 introduced a system that separated out the purchasing of health care services from organisations that provided services. Responsibility for the purchasing of services lay with four Regional Health Authorities (RHAs). These RHAs contracted with providers of services in both the primary and the secondary care sectors. The RHAs did not have elected representatives on their boards although they did have a commitment to reflect the views of users of services. Election of these representatives was the responsibility of the fifth organisation, known as the Public Health Commission. The operation of the health and disability sector at this time reflected an international trend towards market-based systems.
While retaining the purchaser–provider split in health, the 1996 Coalition Agreement on Health removed the emphasis on competition between hospitals. In addition, the four RHAs (the Public Health Commission having been dissolved) were replaced by a single Transitional Health Authority that subsequently became the Health Funding Authority (HFA). The board members of the RHAs and HFA were appointed by the Minister of Health and there were no elected members. The RHAs and HFA were, however, expected to reflect the needs of users of services and have a commitment to community consultation. They also retained locality offices across the country.
In 2000 the government initiated change in the sector that amalgamated the purchase and provision of services in the same organisations and decentralised decision making to community-focused District Health Boards (DHBs). The Minister of Health has overall responsibility for the health system. The Minister works through the Ministry of Health to enter into accountability arrangements with DHBs, determines the health and disability strategies, and agrees how much public money will be spent on the public health system by government colleagues. The Ministry of Health has a range of key functions, including providing policy advice to the Minister of Health on all aspects of the health and disability sector, acting as the Minister’s agent and providing a link between the Minister of Health and DHBs (and other health organisations), and providing general ministerial servicing functions.
Central government provides broad guidelines on what services the DHBs must provide, and national priorities have been identified in the New Zealand Health Strategy. Services can be purchased from a range of providers, including public hospitals, non-profit health agencies or private organisations. Funding is allocated to DHBs using a weighted population-based funding formula. Service providers (acute hospitals and most public health units) come under the wing of DHBs, while general practitioners (GPs), rest homes and midwives are independent and are contracted to supply services by DHBs or the Ministry of Health. Overall, there are about 80 public hospital facilities in New Zealand and a large number of privately operated aged-care facilities.