People in other countries hate cost-sharing, too

Take Australia, for instance:

Australia’s conservative government, facing slumping polls and strong opposition to cuts to the country’s popular universal health system, abandoned plans Thursday to reduce rebates on some doctor visits—handing Prime Minister Tony Abbott a major setback to start a year he hopes will mark a political renaissance.

Conservatives in power are concerned about the long-term fiscal future of Medicare (cause evidently that’s the only thing you can call your health care system anywhere). After all, their Medicare costs about $53 billion a year. Overall health care spending was $147 billion in 2012-13, or about 9.7% of GDP. I’ll give all the Americans reading this blog a chance to recover from the inevitable spit-take that results from realizing that THIS is what constitutes “fiscally unsustainable” in other countries.

Anyway, the cuts planned for their Medicare?

The rebate change the government had hoped to introduce would have cut A$20 from the amount paid to doctors from the health budget for short consultations with patients. The government had expected this saving would have been passed on to patients in the form of higher costs, creating a so-called price signal to deter Australians from visiting a doctor without real need. That in turn would have helped reduce health costs.

A $20 co-pay addition. That’s $20 Australian, by the way, which is only $16.39 American. That’s the big change. And the Australians rejected it. In fact, “[s]upport for the government has fallen to levels that if repeated at the ballot box would bring the opposition Labor Party back into office“.

Cost sharing is unpopular all over. It’s unpopular even when the fiscal situation is less worrisome and the remedy is less impactful. You wonder why we have problems with this in the US?


By the way, here’s a nice primer on Australia’s healthcare system!

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