What Trump got right about Australian healthcare

Australian healthcare leaders may well agree with Donald TrumpDonald TrumpVeteran accused in alleged border wall scheme faces new charges Arizona Republicans to brush off DOJ concern about election audit FEC drops investigation into Trump hush money payments MORE: their healthcare system is better than ours. When I traveled to Australia a few years ago to study their healthcare system, I often fielded the question, “What’s all the fuss about with Obamacare? You’ve still got millions of people without coverage.”

I met more than 100 government officials, politicians, health plan and hospital executives, consumer advocates, journalists, academics, and entrepreneurs to research Australia’s private health insurance system ahead of the not-yet-launched Affordable Care Act marketplaces. Consistently, Australian healthcare leaders were critical of their own system, primarily because of its cost.


Virtually every meeting started with these leaders sharing sentiment something like, “We can’t afford our healthcare. We spend nine percent of GDP on it.”


Yet they worried about turning into America, paying way too much for lower-quality outcomes. While Australia has plenty to improve on, they get a few important things right:

Australia covers everyone

Australia’s current Medicare system was launched in the 1980s. Funded by a two percent income tax, it has become a safety net, with about half the population also buying private health insurance.

The government drives high uptake with carrots —30 percent rebate of private insurance costs— and sticks insurance premium increases for every year people over a certain income do not buy in, and tax penalties for higher-income earners who do not buy a private plan.

Higher-income Australians are essentially mandated to buy insurance. “We’re a society that doesn’t want to leave anyone behind,” Rebecca Davies, consumer advocate on Australia’s NIH — National Health and Medical Research Council told me, reflecting widespread sentiment.

This attitude does not come from some socialist framework, but rather a quintessentially Australian pragmatic one. Carol Bennett, then CEO of Consumers Health Forum of Australia explained a general sense of, “We’re taxpayers, so we’re paying for this system.

We use it when we need to.” The co-founder of the disruptive start-up One Big Switch, Lachlan Harris, told me more cynically, “We just want to make sure there’s something for us when WE need it.” Whatever the motivation, everyone is covered. Score one for the Australians.

Australian health insurance is retail

It’s a consumer product. Walking around Sydney, I found health insurance storefronts on practically every block; I even saw a Medicare service center inside a mall. Dozens of private health plans compete on service, price, and value — as you would expect in a healthy consumer market. Employers are scarcely involved unless they have U.S. roots. By contrast, U.S. health insurance has evolved around employers who pay the bulk of the bill for the majority of non-elderly Americans.

American consumers have not been treated as customers. Not surprisingly, we are often ill-equipped to make health insurance purchase decisions, which we increasingly do — on the ACA marketplaces, buying Medicare Advantage plans, or on private exchanges curated by employers.

One U.S. survey found 71 percent of people were unable to define basic features of insurance products (e.g., deductible and copayments); worse, low insurance literacy predicted poor plan choices, wherein people substantially overpaid.

Here again, Australians have an upper hand. Consumers understand their role as customers, an important foundation of an effective market. The GOP’s dream of leveraging market forces to improve U.S. healthcare will not happen without the market’s re-orientation around individual consumers.

Informed financial consent

Australia has adopted the practice of sharing cost information with patients before treatment occurs whenever possible, just like you would get from a car mechanic. Australian doctors are required to inform patients of fees above the health plan coverage, a requirement the Australian Medical Association not only endorses but supports with tools to help doctors discuss fees.

Private health plans similarly support the informed financial consent process. Greater emphasis on informed financial consent was spurred by consumer dissatisfaction with surprise out-of-pocket expenses, which affected 40 percent of patients in a 2005.

In 2016 nearly 86 percent of encounters had no gap. The watchdog agency responsible for supporting consumers encourages open discussion of costs, noting “most doctors will be prepared to negotiate on their fees.” Americans tend only to negotiate the biggest ticket items like houses and cars, but here, too, we could take a page from Australia’s book.

Everyone is involved, whether they want to be or not

Voting in Australia is compulsory. Failure to vote incurs a fine, and virtually everyone votes, diluting the impact of any party’s extremists. I watched election coverage with a sense that the two major parties were fighting for the middle, aiming to govern rather than stand firm on ideology. The impact reaches to all facets of public life, and the pragmatic influence on health policy seems less divisive than what is currently going on in Washington and frankly, better for citizens living with the impact of health policies.

Republicans have abandoned the refrain “America has the best healthcare in the world,” common at the time of my Australian journey. Today, they see the system as urgently broken and even the President even seems envious of the Australians. Why not turn to Australia for ideas on how to fix it?

Deborah Gordon is a seasoned healthcare executive specializing in innovation, strategy and marketing. She most recently served as CEO of Voxent Health Care Technologies, and is working on ideas for unleashing consumer power to improve U.S. healthcare. Follow her on Twitter: @gordondeb.


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