(Refiles to fix personal pronoun in final two paragraphs)
By Matt Siegel
CANBERRA May 13 Healthcare in Australia is set
for its biggest shake-up since the introduction of universal
coverage in the 1970s, as part of a tough federal budget on
Tuesday that critics fret is taking the country towards a
An audit of the Australian economy released last month
recommended broad structural changes and a tight rein on costs
to stem what the government warns is a looming "fiscal crisis"
as the country's decade-long mining boom slows.
But of the sectors examined by the National Commission of
Audit it was healthcare, which accounted for 8.9 per cent of GDP
in 2010-2011 according to OECD figures, that was singled out as
the country's most serious long-term fiscal challenge.
In support of that position, the audit recommended an A$15
($14) fee for doctors' visits and proposed a U.S.-style
healthcare model in which all Australians would be required to
buy private health insurance, with lower wage earners receiving
That puts Australia in the odd position of moving away from
universal coverage even as U.S. President Barack Obama has spent
years of political capital trying to introduce it in his
country, the last holdout against universal coverage in the
"Australia is the only country heading in the opposite
direction," Lesley Russell, an Adjunct Associate Professor at
the University of Sydney's Menzies Centre for Health Policy, who
advised Obama's administration on its healthcare reforms, told
"I think that what we are getting is this very old-fashioned
ideological view of what healthcare used to be in 1950. And
everybody else has moved on from that."
Like many wealthy countries, Australia provides universal
healthcare for all of its citizens regardless of income through
a taxpayer-funded system called Medicare, similar to Britain's
National Health Service.
Australian spending on healthcare was slightly lower than
the OECD average of 9.3 percent of GDP in 2011, putting it
behind the United States at 17.7 per cent and a number of
European countries including France, Germany and the United
But Prime Minister Tony Abbott's government argues that
healthcare costs are unsustainable and must be reined in as part
of reforms aimed at ending what Treasurer Joe Hockey calls "the
age of entitlement".
"There is no such thing as a free visit to a doctor," Hockey
said earlier this month.
"Government services are somehow deemed to be magically free
but of course they're not free. They are paid for by the
It remains unclear which recommendations the government will
adopt in the budget, but it has been widely reported that a A$7
doctor's fee will be instituted alongside increases in
co-payments for medications covered under the scheme.
Another possibility is that high-income Australians could be
opted out of the system through private insurance, moving it
closer to the system in the United States.
Russell said the proposals ran contrary to global healthcare
trends moving towards universal healthcare, she said, citing the
reforms in the United States as a prime example.
Although it was too soon to compare the changes directly to
the much maligned U.S. system before the so-called Obamacare
reforms, she said, the proposals "send shivers down your spine".
"Medicare works in Australia because the richest and the
poorest of us have the same stake in the system. And if they
change that, that really scares me. That's the end of Medicare,"
The possibility that changes will unfairly impact low-income
Australians, for whom a A$7 fee would be a deterrent to visiting
a doctor, is a sticking point in a country that prides itself on
a "fair go for all".
Rishu Malepati, a cleaner in Sydney, argued that the A$7 fee
was indeed a high cost on top of what Australians already pay
for healthcare through their taxes.
"We should not have to pay for this added cost. I don't like
this," he said.
But Robyn Carr, who owns an eye-wear shop in Sydney, said
that she felt people abused the system and that the fee was so
small that it would likely not hurt anyone.
"It doesn't bother me," she told Reuters.
($1 = A$1.07)
(Reporting by Matt Siegel in CANBERRA and Maggie Lu Yueyang in
SYDNEY; Editing by Nick Macfie)