26 August 2005
Australia is spending progressively more on health care. Over coming decades, increasing health costs will place the financial sustainability of the health system under growing pressure. These concerns have prompted Medicines Australia, a national body representing research based pharmaceutical companies, to call for a major overhaul of the Australian Pharmaceutical Benefits Scheme (PBS), the scheme under which pharmaceuticals are partially subsidised by the Federal Government for the benefit of the public. In order to reduce the financial pressure on the public health system, Medicines Australia has recommended the introduction of medical savings accounts (MSAs), a vehicle for facilitating greater patient contributions to the cost of health care.
MSAs would be similar to individual bank accounts, with the specific purpose of paying for future medical expenses, including but not limited to pharmaceuticals. The accounts would be, in essence, an alternative to private health insurance, and would enable people to accumulate their own savings to pay for health expenses rather than paying premiums in exchange for health cover.
The system has proven effective overseas, however individual savings were generally not enough to cover costs associated with severe and/or chronic conditions. A further limitation of the MSAs is that they do not assist the poor, who have little or no capacity to accumulate enough savings to pay for their health care. For these reasons, in order for a medical savings account program to offer universal benefit, it would need to be complemented by a safety net system for poorer people and to support people who incur exceptionally high health care costs.
Additional reforms recommended by Medicines Australia include differential co-payments based on national health priority status, means tested co-payments and co-payments indexed on PBS growth. Generally, it is hoped that these reforms to the country's PBS will help alleviate the financial pressure faced by many Australians.
