1. Australian healthcare context

This chapter gives the Australian context for healthcare policy and the provision of the various care services. It also presents the changes and challenges that will impact on health, aged and community care service delivery. It provides a broad picture—the details of the models of care that are evolving as a response to these changes are discussed in Chapter 4.

The information supplied in this chapter comes from a range of data sources. Use caution when comparing different sets of data as they may be based on different assumptions or reporting periods.

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Australia’s health system is complex with a mix of public and private provision and financing. It represents a major sector of the Australian economy with annual health expenditure amounting to over $47 billion in 1997–98 or around 8.3 per cent of GDP (AIHW 2000a). Health care is largely publicly funded, with governments providing around 70 per cent of health financing. The Commonwealth Government is the dominant funder (around 67 per cent of government health expenditure in 1997–98) (AIHW 2000a). In contrast, provision is largely private (65 per cent), supplied by medical practitioners and allied health professionals operating at the client interface, private hospitals and other health facilities (AIHW 2000a). Most government-delivered services are provided in public hospitals, for which States and Territories are responsible.

The Commonwealth subsidises the provision of health services through several national access programs—the Medicare Benefits Scheme for privately provided medical services and the Pharmaceutical Benefits Scheme (PBS) for pharmaceuticals. Funding for public hospitals is cost-shared between the Commonwealth and States through the five-yearly Australian Health Care Agreements. States and Territories are responsible for the delivery of public hospital and other population health type services. Provision of private health insurance is subsidised directly and indirectly by the Commonwealth Government.

An ongoing factor in the development of Australia’s health system has been the appropriate division of responsibility between the Commonwealth and States and Territories. Under the Australian Constitution, legislative power with respect to health was not conferred on the Commonwealth and so remained with the States.

• Australia’s health system, like those of similar countries, has been changing. Key trends include:

• A shift in policy focus from providers and inputs of health care to patients and the outcomes of care.

• A search for ways to improve efficiency and effectiveness of service delivery and quality of health care in response to concerns about rising levels of government expenditure on health and resulting pressures on budgets.

• Growing recognition that safety and quality improvements are central functions of health care systems and the establishment of bodies to provide national leadership on these matters.

• Increasing focus on evidence-based practice and decision making.

• Strengthening information systems and evidence to improve performance monitoring and assessment and to provide reliable information to consumers, providers and governments.

• Recognition of the need for access to high quality research and development and cost effective ways to disseminate and translate research findings into practice.

• A shift away from institutional care to care in the home and community.

In Australia, the combination of geography and population demographics presents particular challenges for our healthcare system. As well, Australia is a culturally diverse society. Australians are often described as being either Indigenous or non-Indigenous, but neither of these groupings is homogeneous. Apart from Indigenous peoples, we are a nation of immigrants, made up of different cultural groups, each of which may have its particular health issues. These and other factors provide a unique context for health policy and funding.

However, it is important to remember that Australia is also part of the global community.  Health is a global public good. The health, education and training policies of other countries, along with the international labour market, all have an impact. These factors also provide a context for health policy and funding in Australia.

High standards in education and training create a workforce sought after by the international labour market. Globalisation has effectively erased the boundaries between labour markets and in response we have a mobile group of people with specialist skills who compete for work in an international field. Professionals make up the largest group of migrants (Stilwell 2002). As the competition for skilled workers increases, we may find it increasingly difficult to continue to attract these people.

The Australian population is widely distributed across a continent of about 7 692 030 km2, with the majority of the population concentrated on opposite coastal regions. The mainland spans a distance of about 3180 km from north to south and about 4000 km from east to west (ABS 2002). Half the area of Australia contains only 0.3 per cent of the population, and the most densely populated 1 per cent of the continent contains 84 per cent of the population (ABS 2002). Such a widely dispersed population provides a particular challenge for the delivery of healthcare services, particularly in Western Australia, the Northern Territory, South Australia and Queensland.

Most of the population in the coastal regions is concentrated in urban centres, particularly the capital cities. New South Wales is the most populous State followed by Victoria (see Table 1.1). However, the fastest population growth has occurred in the Northern Territory and Queensland, with increases of 10.1 per cent and 9.2 per cent respectively in the five years to 2000. In contrast, the population of South Australia grew by just 1.9 per cent over the same period and Tasmania declined by 0.7 per cent (ABS 2002). Table 1.1 compares the population at 30 June 2000 by State and Territory and by proportional distribution.

Table 1.1 Estimated resident population, by State and Territory (as at 30 June 2000)

In the first report on rural health by the Australian Institute of Health and Welfare (AIHW), Strong, Trickett, Titulaer and Bhatia (1998, pp. 5–11) note the following in relation to the socio-demographics of Australia today:

• Australia’s Indigenous population is 1 per cent of the metropolitan zone and 3 per cent of the rural zone.

• There are substantial variations in the age structures of Australia’s populations living in metropolitan, rural and remote zones. These differences reflect the varying patterns of fertility, mortality and migration experienced in each zone. The remote zone,  with relatively higher proportions of Indigenous people, had substantially higher fertility rates than the rural zone in 1995. Remote centres experienced fertility rates around 25 per cent higher than large rural centres, and 40 per cent higher than capital cities.

• The proportion of people aged 55 years and over in the remote zone is around half that of metropolitan and rural communities. Migration from these areas and higher premature mortality of people living in the remote zone contribute to these lower proportions.

Immigration has been a key factor in Australia’s changing population, contributing to an increasingly culturally diverse nation. The proportion of the Australian population born overseas has increased from 10 per cent in 1947 to 24 per cent by June 2000 (ABS 2002). By the late 1990s, 91 per cent of the Australian population was of European descent and 7 per cent Asian (Hilless & Healy 2001). In 1999–2000, 34 per cent of all settler arrivals were from Asia (ABS 2002).

With almost one in four Australians born overseas and 27 per cent of those born in Australia with at least one overseas-born parent, the immigrant population has significant impact on health care in this country. The health status of the immigrant population also allows us to make a comparison on variations in morbidity and mortality with the  Australian-born population.

The immigrant population is usually younger and in better health with a lower dependency ration. Over three-quarters of all permanent arrivals to Australia in 1999 were between15 and 64 years of age (AIHW 2001a, p. 28). Immigrants have better health than Australian-born residents on several measures including lower death rates, hospitalisation rates and various lifestyle-related risk factors.

The death rate among overseas-born persons in 1999 was 524 per 100 000 population, compared with 603 per 100 000 population among persons born in Australia. This is 13 per cent lower than the rate among Australian-born persons (AIHW 2001a, p. 29).

The story for the Indigenous population is different from the wider Australian community. The life expectancy at age 65 is significantly lower than for the non-Indigenous population. Only 68 per cent of Aboriginal and Torres Strait Islander males can expect to live beyond 65 years compared with 84 per cent for all Australian males. Among Aboriginal and Torres Strait Islander females, 80 per cent can expect to live beyond age 65, compared with 91 per cent of all Australian females (AIHW 2001a, p. 41).

According to estimates based on the 1996 Census and its projections, there were 410 615 persons of Indigenous origin in Australia in 1999, constituting 2.2 per cent of the population. Between 1991 and 1999, the Indigenous population increased at an annual rate of 2.2 per cent. This contrasts with the total Australian population, which grew by 1.1 per cent annually (AIHW 2001a, p. 24).

The Indigenous population is quite young in comparison with the rest of the Australian population. In 1999, 50 per cent were under 20 years of age and only 3 per cent were aged 65 years or over. In contrast, 28 per cent of the Australian population as a whole were under 20 years of age and 12 per cent were aged 65 years or over (AIHW 2001a, p. 24).

Just over half of all residents in aged care services in all States and Territories other than the Northern Territory were aged 85 and over at 30 June 2001. Nationally only 4.5 per cent of residents in aged care facilities were under 65 years of age. In the Northern Territory 28 per cent of the residents in aged care services were aged 85 and over, while 19 per cent of them were under 65. This trend is due to the higher proportion of Indigenous Australians in the Northern Territory (AIHW 2002b, p. 3). Twelve per cent of residents in aged care services in remote areas were under 65 years of age (AIHW 2002b, p. 4).

A growing focus of government policy is the ageing population and its implications for Australia. The 2002–03 Budget Paper No. 5—Intergenerational Report circulated by the Treasurer, the Hon. Peter Costello MP, for the 2002–03 budget, states that Australia’s life expectancies are among the highest of OECD countries and that this is expected to continue. ‘In the past century, the proportion of the Australian population over 65 has risen from just over 4 per cent to nearly 12.5 per cent. By 2042, around 24.5 per cent of Australia’s population is expected to be aged over 65’ (Commonwealth of Australia 2002a, p. 19).

The growth rate of the older population is two to three times that of the rest of the population. The period from 1990 to 1999 saw the number of persons aged 65 years and over increase at an annual rate of 2.3 per cent. Those aged 80 years and over had an even greater growth rate of 4.1 per cent annually (AIHW 2001a, p. 40). Comparatively with other OECD countries, the 80 years and over age group will increase steeply in Australia due to the relative youth of the Australian population. Countries that have a similar profile to Australia are Ireland, Canada and the United States (Jacobzone et al. 2000). Table 1.2 compares the projections of growth rates in older citizens in Australia with the United Kingdom and the United States. Of note is the growth rate for men which is higher than that for women in all three countries.

Table 1.2 Underlying demographic projections for average annual growth rates

The population is ageing due to a peak in birth rate in the post-war period and an increase in the average length of life. While there is little evidence that the range of human lifespan is increasing (Fries, Green & Levine 1989), there has been a decrease in premature death. This decrease is due to improvements in nutrition, particularly maternal nutrition, environmental changes resulting from technological advances (for example, the storage of food), combined with advances in medical technologies (Singer & Manton 1998).

Ageing is a resource challenge because high levels of chronic illness and levels of disability accompany this process. In planning to meet the implications of the ageing population, policy makers will need a sophisticated understanding of the likely demands on resources due to requirements of care. A key question will be how to best invest resources in order to compress chronic illness and extend ‘active life’ (Fries 1980).

There is considerable evidence that early changes in behaviour towards a healthy lifestyle not only increase life expectancy but also the years ‘lived in an active state’ (Singer & Manton 1998). Further research suggests that there are benefits in changes in behaviour even late in life. Fries, Green and Levine suggest that ‘it is in the pre-senior and senior populations that the greatest leverage for health promotion practices directed at chronic and degenerative diseases is to be obtained’ (1989, p. 483) . It seems that better health can be acquired not only through better lifestyles but also through appropriate access to new and costly technologies (Jacobzone et al. 2000).

Jacobzone, Cambois and Robine (2000) caution against taking the view that a decline in disability in the older population will result in savings. Even if further declines in disability could generate significant potential savings in the case of long-term care, this may not necessarily apply to health care costs in general, where public spending is generally of a much higher order of magnitude. The increase in health care spending in many OECD countries from 1980 up to the mid-1990s was, by itself, larger than the total spending on long-term care for a significant number of countries. Therefore, caution is needed in inferring links between improvements in health and healthcare spending.

The policy issues are complex. Australia may require investment in a wide range of areas, including social and health policy, to ensure a ‘healthy ageing’ of the population. Jacobzone and team believe that ‘health and long-term policies can make a difference in transforming the pure demographic effect of ageing into very different social outcomes’ (2000, p. 168). Further they argue that in developing and implementing policy, attention should be given to the range of factors that could influence the demand for long-term care. They note three factors:

• the living choices of older populations

• the perceived price of care in the community

• the potential availability of informal care, primarily from the spouse and children.

In relation to the last factor, they suggest that the availability of informal care could influence the demand for home help. They indicate that most international data shows that informal care could account for up to 80 per cent of total care currently undertaken. While in the past support from a spouse has been largely influenced by the greater likelihood of the female partner living longer than the male, the demographic projections of most countries suggest that there will be a re-balancing of male to female ratios with an increase in the lifespan of the average male (Jacobzone et al. 2000, p. 170). The availability of adult children to provide care in the future is difficult to predict in the changing work environment. While more family-friendly practices are proposed and work patterns are changing, the proportion of the population available for work is diminishing as the population ages.

Jacobzone and colleagues (2000) suggest that while a decline in the proportion of frail elderly people living in institutional care would pose a major challenge to social systems, it would also change the case mix in nursing homes. As has already been experienced in Australia, the future for nursing homes is likely to be one where older persons will require greater care as they are likely to be more disabled. The provision of this level of care may shift the required skill mix of carers in nursing homes. Table 1.3 shows the trends that have occurred away from institutional care in Australia, which have had the effect of raising acuity levels in aged care institutions.

New technologies have not only made the dissemination and exchange of medical information more available to those working in the field but have also increased the public’s awareness and knowledge of health care and their expectations of health services.

As the public has become more aware, they have become more demanding and have higher expectations.

The access to information does not necessarily mean the public is well informed. Information is often out-of-date or based on promotional material, making it biased or without appropriate contextual background. The health consumer expects safer and more personalised health care, greater involvement in decisions about their treatment, and more choice and access to health services.

(Leeder 1998, p. 3)

The Intergenerational Report notes that: ‘Consumers have a high demand for more effective treatments, and expect these treatments will be provided to them soon after the technology becomes first available’ (Commonwealth of Australia 2002b, p. 38). This increased consumer involvement has changed the roles of all the players in the healthcare system:

While well-informed consumers are in a good position to make decisions, the work of the nurse is often complicated by consumers who do not have the appropriate information or understanding of the complexities of their care in a given situation.

Rising expectations by the Australian health consumer have led to an increase in medical litigation when the outcomes fail to meet those expectations. The cost of medical malpractice insurance rose in Australia to the point where the biggest medical indemnity provider, United Medical Protection, collapsed in 2002, sparking a medical indemnity crisis. The Government put in place temporary arrangements to avert the disruption in medical services and on 30 May 2002 held a Ministerial meeting on public liability in an attempt to resolve the crisis.

The issues arising out of the crisis have repercussions for the delivery of health, aged and community care services and threaten the education and training of students in health related disciplines such as nursing and medicine. The crisis is already affecting the availability clinical placements for nursing students in some universities. The Australian (Kerin & Keenan 2002) reported that students at the University of Queensland Medical School were unable to get insurance for their practical work and the situation was threatening student training. Uncertainty about who has liability when a student is involved in malpractice and the increased costs of indemnity insurance to education and training institutions may impact negatively on the availability of education in these areas.

New diseases are likely to continue to emerge while old diseases may reappear. Areas of public health such as hepatitis and AIDS have associated complexities of social stigma as well as disease management and patient care. Nurses need to develop all these understandings in their preparation as they will often be called upon to treat people who have these diseases or educate others about them. In doing so, they take on an important role of ‘knowledge broker’, both to interpret information and to assist in overcoming the discrimination associated with ignorance. We note the recommendation from the Anti- Discrimination Board of New South Wales in its Report of the enquiry into hepatitis C related discrimination that ‘the National Review of Nursing examine the existing opportunities for education about hepatitis C for nurses and consider options for improving such opportunities’ (2001, p. 56).

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There is a growing societal expectation that there should be balance between working life, family and social life. An imbalance between work and other aspects of life can result in stress, poor physical and/or mental health of the employee, and workplace injury (CAALL Ad Hoc Committee on Work-Life Balance 2002).

In ratifying the International Labour Organization (ILO) Workers with Family Responsibilities Convention in 1981 Australia agreed to:

(International Labour Organization, C156, Article 3, 1981).

While some progress has been made towards providing more supportive ‘family-friendly’ working environments, projections by the ABS suggest that there will be even greater pressure in the future to respond to family priorities (1999a).  This issue is likely to become increasingly relevant. Australian government policy is beginning to encourage higher birth rates in response to the ageing of the population. The ageing of the population itself, and the associated care requirements of the older members of the population could also put further demands on the family and consequently require a more responsive employment environment.

Another important factor impacting on the work environment is the increased incidence of one-parent families. This increase has been projected to rise between 30 per cent and 66 per cent from 1996-2021 (ABS 1999a). The proportion of female one-parent families is expected to remain at five times the number of male one-parent families or possibly increase to six times the male one-parent families by 2021. For a predominantly female profession such as nursing, this increase in female-led, single-parent families means that workplaces will be forced to examine issues such as flexible working hours that reflect schooling requirements, childcare facilities that respond to 24-hour shift work, staffing arrangements around school holidays and the like.

The way Australians work and the type of employment are changing. Significant changes include:

• Between August 1988 and August 1998, there was a substantial increase in the proportion of casual employees, from 19 per cent to 27 per cent (ABS 1999b). In addition, there is now less constancy of hours and employment in the labour force generally (AIHW 1999b).

• Labour force projections show a significant increase in full-time and part-time employment at older ages as the ‘baby boomer’ generation moves toward retirement. The AIHW also reports an increase in the choice of self-employment for this group (1999a).

• Other modes of work such as project workers, home-workers, labour hire companies and sessional workers are increasing.

• There has been a general decrease in the labour force participation rate for men compared to a general increase for women (AIHW 1999a). In recognition of the increased participation of women in the labour force, the age at which they can qualify for the age pension is progressively increasing from 60 to 65 years.

• Few people work in the one labour area or for the one employer for life. Australians are more likely to change career a number of times throughout our working lives.

Despite the ageing population, Australia still has a relatively young population compared to OECD countries. However the ratio of the over 65 years group as a percentage of working age population is predicted to be 19.8 by 2010 and 29.4 by 2030 (Jacobzone et al. 2000, p. 152). Unless there is a considerable increase in numbers of young immigrants in future years, there will be a smaller proportion of population available for work. The combination of a smaller active workforce and early retirement could lead to a period of high competition between Australian employers to attract workers.

Many occupations have a history of gaining their new recruits from particular groups of the population. The main source of recruits for nursing has always been women and it remains a predominantly female profession. In 1997 only 7.7 per cent of all employed nurses (registered and enrolled) were male (AIHW 2001c). However, with a wider range of educational opportunities and career choices, the traditionally female career options such as nursing and teaching are now in competition with all other careers, many of which have more prestige and offer better remuneration. Nursing therefore faces a particular challenge in attracting new recruits who have greater choice than ever before.

In response to expanded opportunities, women are also participating more in education, which means a wide range of career options are available in many status occupations. More girls than boys complete high school to Year 12 or the equivalent (Office for the Status of Women 2001). In addition the number of women participating in higher education has grown steadily to the point where women today make up the larger proportion of students in Australian universities. According to the Office of the Status of Women (2001), in 2000 women made up:

• 57.9 per cent of students commencing a bachelors degree at university

• 51.2 per cent of enrolments in postgraduate studies

• over 50 per cent of enrolments in higher degrees by coursework.

The broad national trends in workforce patterns are reflected in the nursing workforce where there is evidence of an increase in the casualisation of the workforce and a greater use of agency staff in both public and private healthcare facilities. Aitken, Manias, Peerson, Parker and Wong noted in a submission to the Review that although a ‘mobile nursing workforce’ has existed in Australia and other countries for some time, there has been an increase in the use of casual labour and a significant move from full-time hospital employment to agency nursing. In this submission Aitken and colleagues suggest that, whereas agency staff were previously used to cover absences of permanent employees, there is an increasing reliance on their use in response to growing recruitment and retention problems.

Like all professionals, nurses are expected to engage in continuous skilling and lifelong learning. The skills and knowledge they develop are often transferable to other employment areas and, in keeping with the trend away from ‘jobs for life’, nurses are increasingly changing careers throughout their working life. Nursing also attracts people who have changed career and these people bring a new range of skills and knowledge to the profession. Nursing students who spoke to us during the consultation process indicated that nursing was their second or third career or even part of a transitional process leading them to a future career goal.

Saltmarsh, North and Koop (2001) examined the expectations of student nurses about their study and future career. The study found that students saw great benefits to be gained from a career in nursing as it presented opportunities to work in a variety of different roles within nursing itself, it facilitated a range of lifestyle options including working in different locations around the world, and it also offered a good foundation for other careers. There was a clear expectation that nursing was one step along a pathway, whether to particular areas of nursing specialisation or to a further career outside nursing.

A number of countries are examining the challenges facing the future of health care. Of particular interest are those countries that have cross-jurisdictional arrangements influencing policy and funding, since this is the situation in Australia. Many of the  issues raised in the Review show the need for more integrated planning across State and Territory boundaries in relation to factors influencing the delivery of health care. Moreover, the future challenges documented in this chapter suggest that Australia, along with various other countries, will need to engage in a community dialogue to find a way to balance resource demands. The reviews of the United Kingdom and Canada of their healthcare systems are of particular interest to Australia for these reasons.

In response to reduced investment over recent years, the United Kingdom has undertaken a wide examination of the way service is delivered in the healthcare sector. The NHS Plan: A plan for investment. A plan for reform, announced in mid-2001, is an integrated plan for improvement in the UK healthcare system. The NHS Plan provides an underpinning philosophy for decisions on scope of practice of health practitioners and their education. Nurses and midwives are specifically addressed and considerable expansion of scope of practice is envisaged for nurses. One of the principles outlined in the NHS Plan is the establishment of agreed protocols for service that encourage the best use of personnel. The NHS Plan also emphasises inter-disciplinary training and a common foundation program to enable students and staff to switch careers and training paths more easily. These developments should be monitored and assessed in the context of the UK health system.

Canada is currently undergoing a consultation process to determine how Canadians can create a sustainable future. In April 2001, the Privy Council of Canada established the Commission on the Future of Health Care in Canada. Its charter is to inquire into and undertake dialogue with Canadians on the future of the public healthcare system and recommend policies and measures for long-term sustainability (Romanow 2002). In the interim report the Commissioner reports that:

• Medicare, the publicly funded health ‘insurance’ system, needs remodelling

• the Canada Health Act needs to ensure it reflects the values of Canadians

• the lack of long-term, stable, predictable funding is jeopardising long-term planning and community confidence

• there is an absence of effective systems for sharing best practice (Romanow 2002, pp. 3–4).

The interim report canvasses an interesting debate on the implication of values for the decisions that will underpin any changes in the future. This debate resonates well with the Australian context.

Both the UK and Canadian approaches highlight the need to plan for that future. While issues related to one professional group such as nursing are important, they need to be seen within the context of healthcare delivery. States such as Western Australia and Queensland have already developed or begun work on strategic health plans for the future—however, we need an Australian vision for health care based on community debate.

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