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An Australian vote for pharma: a history of health reform

This article was originally published in Scrip

Executive Summary







Major changes


Medibank II




Fraser coalition


Allowed people with private insurance to opt-out of Medibank and the compulsory 2.5% levy on taxable income.


Medibank III




Fraser coalition


Abolished the Medibank levy.

Restored access to public hospitals for those without private health insurance and provided universal benefits (40% of scheduled fee) for medical services.

Made health insurance voluntary.


Medibank IV




Fraser coalition


Abolished universal medical insurance except for expenses in excess of A$20.


Return to voluntary private health insurance




Fraser coalition


Medibank abolished. Made government benefit of 30% of scheduled fee available to those with private health insurance.

Made a tax rebate of 32% available when private insurance was purchased.






Hawke Labor


Re-introduced universal, tax-funded insurance.


Subsidies to private health insurance reduced




Hawke-Keating Labor


Removed tax rebates and public subsidies for private health insurance and private hospitals.

Introduced contracts between private health insurance funds and hospitals and between funds and doctors in order to reduce patients' out-of-pocket payments.


Subsidies for private health insurance increased




Howard coalition


Increased Medicare levy for higher income earners without insurance.

Introduced subsidy for private health insurance premiums.

Enabled funds to charge higher premiums to people first taking out private health insurance after the age of 30.

Introduced a Medicare safety net that subsidised patient out-of-pocket expenses above threshold amount.

Enabled private health insurance funds to cover additional out of hospital services.


Pharmaceutical Benefits Scheme (PBS) reforms




Rudd/Gillard Labor


Split formulary into F1 and F2 with different pricing strategies for each.

Introduced three different types of statutory price reductions for drugs in F2.

The price disclosure programme singles out generics for further price cuts.

Saw further negotiations on 'therapeutic groups' and the establishment of the Access to Medicines Working Group (AMWG).


Therapeutic Goods Administration (TGA) reforms




Rudd/Gillard Labor


Includes the following three key initiatives:

(1) accelerate the application entry and improved application coordination (streamlined submission process);

(2) increase transparency of the prescription medicine regulatory process (the AusPAR project);

(3) improve access to prescription medicine information (the product information [PI]/consumer medicine information [CMI] project).


National Health and Hospitals Network (NHHN) reforms




Rudd/Gillard Labor


Under the NHHN, the Labor government aims to:

(1) reform the fundamentals of Australia's health and hospital system, including funding and governance, to provide a sustainable foundation for providing better services now and in the future;

(2) change the way health services are delivered, through better access to high quality integrated care designed around the needs of patients, and a greater focus on prevention, early intervention and the provision of care outside of hospitals;

(3) provide better care and better access to services for patients right now, through increased investments to provide better hospitals, better infrastructure, and more doctors and nurses.


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