Health Systems Comparison Analysis— Australia vs. Canada

Introduction

Australia and Canada share similar democratic federated government systems with similar division of powers between central and state governments in health matters. They are also of comparable wealth, large geographical area with low population density, and have indigenous population. In 2018, Canada has a larger population than Australia (36 vs. 24 million (“Population Clock: World”, 2019)). These structural similarities make Australia and Canada suitable for comparable health performance studies.

1. Funding

1.1 Funding systems (including health insurance system)

In Australia, universal health care is provided via a public health insurance program (called Medicare), private health insurance (PHI) funds, individual out-of-pocket expenses and accident compensation schemes (Australian Institute of Health and Welfare, 2015).

Healthcare governance is administered in 3 tiers — federal, state and territory, and local governments. The federal government provides the main funding to key schemes such as the Medicare Benefit Scheme (MBS) and the Pharmaceutical Benefit Scheme (PBS), and provides funds to states and territories to managed other health services (public hospitals, ambulance service and mental health). Medicare is primarily financed through a 2% tax levy in certain income brackets. In 2017–2018, Medicare spending was AUD$23.2 billion (The Department of Health, 2018). PHI allows Australian’s more choice and access to non-emergency services in hospitals and rebates for selected services (optometry and dental). It also provides tax rebates and avoidance of a Medicare Levy surcharge if earning a certain income and above. Australia has a strong private hospital sector business model underpinned by PHI. In 2018, 44.9% of Australian population had hospital treatment cover (Australian Prudential Regulation Authority, 2018). In 2016–2017, private health insurance accounts of 8.8% of all health spending (Australian Institute of Health and Welfare, 2018b).

In Canada, health authorities from provinces and territories organise, plan and deliver publicly funded health services according to the adherence of the Canada Health Act (CHA) 1985. Each province and territory administers their own public health insurance programs to those who meet residency requirements. The federal government funds provinces and territories through the Canada Health Transfer (if set criteria are met) based on a per capita basis to an estimated total of $CAD37.2 billion in 2017–2018 (“Federal Support to Provinces and Territories”, 2019). PHI covers excluded service from public reimbursement such as home care, medications, dental care and rehabilitation services. Most PHI are for-profit and accounts for an estimated 12.4% of total health spending in 2018 (Canadian Institute for Health Information, 2018).

Canada can improve in universality of healthcare by embracing Australia’s private parallel healthcare sector as part of high performance healthcare. Private for-profit hospitals account for 39% of hospitals in Australia while only 1% in Canada (Esmail & Barua, 2018). Enhanced coverage of medical service can offer quicker access to health care services such as elective surgeries through reduced wait times (which Canada responds poorly to).

A universal pharmaceutical scheme similar to the PBS could bring price of medications down through monoposonistic purchasing, quality use of medicine and rigorous cost assessment of listed medications (Philippon, Marchildon, Ludlow, Boyling & Braithwaite, 2018). However, Australia’s PBS design of mandatory co-payments may lead to equity concerns, especially towards disadvantaged Indigenous populations (which Canada has as well).

The use of negotiated global budgets in hospital funding in Canada is inefficient as compared to Australia’s activity-based payment, which includes an incentive for efficiency, innovation and quality. For example, an activity-based funding could drive Canadian hospital efficiency upwards by encouraging hospitals to treat more patients, leading to higher volume of service per dollar and ultimately reduce its infamous waiting times for elective surgeries (Duckett, 2018). With that, an overhaul in pricing and payment structure should be considered for Canada to provide superior quality of care.

1.2 % GDP spent on health

In 2017, Australia spends 9.1% of the country’s GDP on health expenditure and financing, while Canada spends slightly more at 10.4% (OECD 2019b). Both countries health expenditure remain fairly consistent and stable for the past 4 years. OECD health spending averaged at 9.0% of GDP in 2017 (OECD 2019b).

One-fifth (18.9%) of health expenditure in Australia in 2015 comes from out-of-pocket cost (OECD 2019b), and has led to barrier to healthcare access for disadvantaged populations. As there is no regulation of extra billing, patient fees are applied at individual practices discretion. Canada out-of-pocket spend is lower than Australia at 14.8% of total health expenditure in 2017 (OECD 2019b); therefore should been maintained.

In 2016–17, high out-of-pocket cost has led to healthcare access inequity as shown by 7.6% of Australians delaying visits to their medical practitioner in the last 12 months (Australian Institute of Health and Welfare, 2018c). In Canada, one in ten people state cost as a barrier to filling prescriptions (Law et al., 2018). Not all out-of-pocket cost is the same, with lower socioeconomic areas charging a lower fee than affluent areas. Therefore a systematic study of the local area’s median out-of-pocket cost can inform policymakers if there is indeed a real inequity situation in a particular locale (Australian Institute of Health and Welfare, 2018d).

2. System Governance Arrangements

In Australia, the Council of Australian Governments (COAG) is an intergovernmental collaboration group that makes federal decisions with the prime ministers and state ministers. COAG Health Council is responsible for issues such as funding and policy in health-related matter (Australian Institute of Health and Welfare, 2016). The federal Department and Health administer schemes such as the MBS and PBS, while state Department of Health work with local stakeholders in addressing diverse local needs and health gaps.

In Canada, the federal government has devolved health systems jurisdiction to provinces and territories to administer and govern. Instead, the federal government plays a role in public health promotion, food and drug safety, medical device review and funding of indigenous health services. Most health providers are self-governing and conduct regular standard assurance for quality care.

Canada continues to struggle with the establishment of a national pharmaceutical policy, home care program, and solving its infamous long waiting time. Researchers believe that the lack of national structures similar to Australia’s COAG led to coordination and consistency variances amongst different provinces (Philippon & Braithwaite, 2008). Australia’s Commonwealth government involvement and responsibility has been a prominent feature in the robust nature of centralized healthcare decision making in Australia, and should be looked up by Canada for inspiration.

3. Population Health Indicators

3.1 Maternal Mortality Rate (MMR)

In Australia the MMR is 8.5 deaths (direct and indirect causes) per 100 000 live births or 3.9 deaths (direct) per 100 000 live births in 2016 (Australian Institute of Health and Welfare, 2018a), while Canada had a MMR of 6 (direct and indirect causes) in 2014 (OECD, 2019e). OECD average was a MMR of 7, while global average was a MMR of 215 (World Health Organization, 2015).

Both countries have very low and stable MMR over the past decade, showing that access to maternal healthcare services pre and post partum is not a barrier. However inequities in maternal healthcare is present in Indigenous populations in both Australia and Canada. Thus policy makers are encouraged to emphasize on Indigenous-specific maternal health programs to better improve their national MMR.

3.2 Infant Mortality Rate (IMR)

Infant Mortality Rate (IMR) is an essential indictor of a country’s health and socioeconomic status.

In Australia the IMR is 3.1 deaths per 1000 live births in 2016 (OECD 2019c), while Canada had an IMR of 4.7 in 2014 (OECD, 2019c). Both countries adopt similar methodology in its calculation of IMR. The OECD average IMR was 3.7.

Canada’s larger population settlement in rural/remote areas (18% vs. 10% in Australia) may have been a contributor to a higher IMR (Philippon, Marchildon, Ludlow, Boyling & Braithwaite, 2018), especially when rural/remote inhabitants are mainly Aboriginals with poorer health outcomes. Therefore Canadian health policy makers and funders are encouraged to improve health services outreach in neonatal and postnatal care in these rural/remote areas for better infant health equity.

3.3 Life Expectancy at Birth

In Australia, in the year 2016 males have a life expectancy at birth at 80.4 years while females at 84.6 years (OECD, 2019d). The total average is 82.5 years. In Canada, in the year 2015 males have a life expectancy at birth at 79.8 years while females at 83.9 years (OECD, 2019d). The total average is 81.9 years.

Both countries performed similarly in life expectancy but results are not consistent across their entire population. Australia and Canada’s indigenous population are between 10–15 years lesser than non-indigenous populations in life expectancy (Australian Institute of Health and Welfare, 2018). Both countries have attempted to improve Indigenous health over the past decade through Closing the Gap program in Australia and the Indian Act 1876 in Canada. The latter however is Canada’s only national-level legislation, which is extremely out-dated and culturally inferior (Dickason & McNab, 2009). Therefore policy makers in Canada should draw upon Australia’s attempt of reconciliation to build a National Indigenous health policy that may lead to improved Indigenous health equity.

4. Health System Performance Indicators

4.1 Low birth weight infants

The incidence of low birth weight infants in Australia is 6.5% of total live births as recorded in 2015 (OECD, 2019a), while the incidence of low birth weight infants in Canada is 6.3% of total live births as recorded in 2014 (OECD, 2019a).

Both countries are comparable to the average of other OECD countries (6.5%). However great disparities are still present between the indigenous populations in both countries. Maternal smoking, alcohol consumption, diabetes, socioeconomic disadvantages and poor antenatal care are key contributors to higher incidence of low birth weight in Indigenous populations in both countries (Australian Institute of Health and Welfare, 2014). To close this gap, culturally appropriate and adequate access to smoking and diabetes management during pregnancy needs to be addressed.

4.2 Obesity (Measured)

In Australia in 2014, 27.9% of the population 15 years old and above were obese, of which males at 28.4% and females at 27.4% (OECD 2019f). In Canada at 2013, 25.8% of the population 15 years old and above were obese, of which males at 26.2% and females at 25.5% (OECD 2019f). Despite more recent measurements made in 2015 in Canada, 2013 dataset was used for comparison due to similar methodology.

Similar Western-style diets in both countries’ results could have attributed to obesity levels higher than OECD average (23.8%). To minimise the negative impacts of obesity-related morbidity, a whole-of-government approach to food and nutrition policy and interventions should be considered a key health priority.

4.3 Diabetes

In 2015, the incidence of Type 1 and Type 2 diabetes amongst 20–79 year olds were 5.1% and 7.4% in Australia and Canada respectively (International Diabetes Federation, 2015).

The lack of a national diabetes policy has been linked to higher incidence of diabetes in Canada (Hanson, 2018). Canada should bring together all level of governments and stakeholders to implement nationwide strategies to tackle monitor and evaluate diabetes similarly to the Australian National Diabetes Strategy if they intend to lower their diabetes incidence. As of now, Canada is trying to recommend a national strategy called Diabetes 360 to the Federal government (“Canadian Strategy and Diabetes 360 Target”, 2018).

4.4 Asthma

In Australia in 2017–2018, 2.7 million people or 11.2% aged 14 years and above suffer from asthma. Females have a higher asthma rate of 12.3% compared to males at 10.2%. However the reverse is seen in boys aged 0–14 years at 12.1% than girls 7.9% (Australian Bureau of Statistics, 2018a).

In Canada in 2017, 2.4 million people aged 12 years and above suffer from asthma (Statistics Canada, 2018). Females have a higher asthma rate of 9.2% compared to males at 7.0% in 2014 (Statistics Canada, 2015).

Both countries have high asthma rates in the population and can benefit from an Asthma Action Plan found in Australia. Canada could improve their population’s asthma health by increased funding in asthma prevention strategies and service planning to ensure a safe air environment to reduce the prevalence of asthma and asthma-related consequences.

4.5 Hypertension

In Australia in 2017–2018, 10.6% or 2.6 million people reported having hypertension. This incidence was similar in males and females (10.5% and 10.7% respectively) (Australian Bureau of Statistics, 2018b).

In Canada in 2017, 5.5 million people were estimated to have hypertension. Numbers were similar with males at 2.8 million while females at 2.7 million (Statistics Canada, 2018).

Both countries have similar prevalence rates for hypertension due to similar diets and lack of exercise within the population. More efforts should be placed on governments to empower the population to increase physical activity via health promotion activities.

4.6 Cancer

In 2018, cancer incidence in Australia was estimated at 468 per 100 000 population (age-standardized rates ASR) for all cancers (Bray et al., 2018). Males were more likely to have cancer than females at 579.9 ASR and 363 ASR respectively. Almost one-tenth (10.75%) of new cancer incidences are melanoma skin cancer, making it the most common cancer diagnosis (Australian Bureau of Statistics, 2018c) after breast and prostate cancer.

In Canada in 2018, the ASR for all cancers is 334 per 100 000 population. Males and females had similar incidence of 126 745 and 122 332 cases per 100 000 respectively (Bray et al., 2018). The top 3 cancers are breast (14.54%), lung (13.06%) and prostate (11.05%).

Australia’s high melanoma skin cancer rates may have been due to our geography and intermittent sun exposure during summer season (Walker & Hacker, 2011). Close proximity to the equator, elliptical closeness to the sun during summer, and cleaner less polluted air results in 15% higher ultraviolet exposure (Gies, 2003). In addition, migration of European settlers to Australia has resulted in their skin types not suited to additional ultraviolet rays as compared to the well-adapted skin of Indigenous Australians (Rees & Harding, 2012). Generation brought up on Australia’s public campaign of “Slip, Slop, Slap” is estimated to have lower melanoma rates.

5. Management of Quality and Safety in the Health System

In Australia, government agency such as the Australian Commission on Safety and Quality in Health Care (ACSQH) ensures safety and quality in health care via minister-endorsed service standards. The National Health Performance Authority in agreement with the COAG, reports of equity, effectiveness and efficiency performance of Local Hospital Network, public and private hospitals and other key health service providers, and reports them biennially in “Australia’s Health” report. Non-government agencies such as the Australian Council on Healthcare Standards accredit public and private hospital providers to ensure continuous improvements in quality and safety in healthcare provision.

In Canada, each province and territory are primarily responsible for their own monitoring and evaluation of health systems performance. Federal funded organizations such as the Canadian Institute for Health Information collects and produces publicly available health systems performance report. In addition, the Canadian Foundation of Healthcare Improvement collaborates with provinces and territories to implement continuous quality improvement initiatives.

Both Australia and Canada have similar reporting systems at federal and state/territory levels. Sharing of national and local data encourages innovation and improvement amongst healthcare managers, and ensures consistency, transparency and system accountability (Australian Institute of Health and Welfare, n.d.). However the decentralized government in Canada can be a hurdle to maintaining quality and health standards at a national level; and should be looked into.

Recommendations and Conclusion:

This article presents an analysis of the healthcare system performance in both Australia and Canada. It is an attempt to review and identify the mechanisms of the current healthcare system landscape in each country. Despite having a common heritage that led to system design similarities, it is their differences, which leads to lessons from one country to the other. Australia mixed public and private health system has both positive and negative lessons for Canada; with a national pharmaceutical policy, strong PHI involvement, and decentralized control identified as areas of inadequacies in the Canadian system.

Australia’s health system of integration and cooperation between the public and private hospital sector should be embraced by the Canadian healthcare system as an essential partner in delivering true universal healthcare (Duckett, 2018). Private for-profit hospitals should not be viewed as a threat but rather an aid to reducing pressure off the system by treating less complex patients in more appropriate settings.

A form of Australia’s PBS can be introduced into Canada to allow comprehensive coverage against the current high cost of pharmaceuticals. A co-payment could be introduced within economic mean, and with lower rates for disadvantaged groups for better equity. However a national pharmaceutical policy may not be pursued by Canada as most working middle-class Canadian already have access to pharmaceuticals at little or no charge from their employee benefits plan (Philippon, Marchildon, Ludlow, Boyling & Braithwaite, 2018). Unfortunately this can cause equity concerns for non-working poorer disadvantaged groups who uses the most medications.

However it is noted that co-payments are prohibited in Canada as stated in the CHA. Unfortunately the prohibition of cost sharing for essential medical services has been associated with inefficient overconsumption of healthcare services (Globerman, 2016). Analysis shows that CHA raises significant financial barriers to health policy reform, especially if it were to adopt some of Australia’s good points (Clemens & Esmail, 2012).

Therefore for full healthcare restructuring, the CHA will need to be reformed to remove ambiguity and uncertainty. Cost-sharing could then be introduced to Canada by developing an ‘optimal’ cost-sharing design incorporating only health care services that maximizes net social benefit and is efficient in the long-run (Globerman, 2016). Canada’s population income, social and health status must be taken into full consideration in the development of cost sharing policy.

To effect these changes, Canada will need to consider a standardized uniform national approach to healthcare, thus calling for a stronger role from the Federal government.

The one-sided performance rating of Australia to Canada is a cause of concern for the Canadian health system. It concludes that Canada needs to increase federal involvement and better balance between decentralization and centralization to ultimately enhance the performance of its healthcare system for more equitable health outcomes.

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