Australia's health system – an overview

‘The Australian health system is world-class in both its effectiveness and efficiency: Australia consistently ranks in the best performing group of countries for healthy life expectancy and health expenditure per person.’ (World Health Organization 2003).

The Australian population has a generally good health status, with an average life expectancy at birth of 81.4 years (79.2 for men and 83.7 for women), one of the highest in the world. There are some groups with poor health status, notably Aboriginal and Torres Strait Islander peoples. Otherwise the pattern of disease is similar to that of other developed countries.

Australia’s robust private health sector is complemented by a universal public health system called Medicare. The way in which these two sectors have been combined and balanced ensures quality care and choice for all Australians.

Public sector

Almost 70% of total health expenditure in Australia is funded by government. The Australian Government contributes two-thirds of this and State, Territory and Local governments contribute the other third.

The two major national subsidy schemes are Medicare and the Pharmaceutical Benefits Scheme

Pharmaceutical Benefits Scheme

Government responsibilities

Australian Government

    • Sets national health policies and subsidises the health services provided by State and Territory governments and the private sector.

State and Territory governments

    • Deliver health services (including most acute and psychiatric hospitals).
    • Provide community and public health services.
    • Regulate health professionals.

Local governments

    • Provide environmental control - for example garbage disposal, clean water, health inspections.
    • Provide home care and personal preventive services, such as screening for breast cancer.

Private sector

The Australian Government provides a subsidy (of approximately 30%) to individuals who purchase private health insurance. Nearly half the population is insured for hospital and/or ancillary benefits.

Doctors in private practice are largely free to determine the number of rebateable services they provide and the fees they charge to patients.

Private health insurance

Private health insurance can cover:
    • private and public hospital charges (public hospitals only charge patients who elect to be private patients in order to be treated by the doctors of their choice)
    • a portion of medical fees for inpatient services
    • allied health/paramedical services (such as physiotherapists’ and podiatrists’ services)
    • some aids and appliances (such as spectacles).
Private health insurance does not usually cover medical fees for general practice services.

Accessing the healthcare system


Many patients’ first contact with the health system is through a GP. Patients can choose their own GP and are reimbursed for all or part of the GP’s fee by Medicare, depending on the GP’s billing arrangements.

Public hospitals

Patients can access public hospitals through emergency departments, where they may present on their own initiative, via the ambulance services, or after referral from a doctor. Public hospital emergency and outpatient services are provided free of charge to eligible persons.

Specialised care

For specialised care, patients can be referred to specialists, other health professionals, hospitals or community-based healthcare organisations.

Community-based services

These services - a range of which can be accessed directly by patients - provide care and treatment in areas such as mental health, alcohol and other drugs, and family planning.

Other private sector health professionals

Visits to dentists, physiotherapists, chiropractors and natural therapists are usually either paid for by the patients themselves or subsidised by private health insurance.

There are the special healthcare arrangements for members of the defence forces, and for war veterans and their dependants.