More than an apple a day

Why is it that despite spending a greater proportion of Gross Domestic Product on healthcare than is spent by Korea, Australians’ health is only slightly better than their Korean counterparts?

This is one of the questions being investigated in a partnership between researchers from the National Centre for Epidemiology and Population Health (NCEPH) at ANU and Korean health economists.

Australia spends nine per cent of its Gross Domestic Product on healthcare, while Korea spends only six per cent, but health indicators, such as life expectancy and how healthy people surveyed say they feel, show that health in Australia is only marginally better.

“It would seem that we are not getting a commensurate improvement in health over the Koreans,” said Dr Jim Butler from NCEPH.

“There are two possible hypotheses. Health spending may not make that much difference at the margin anyway as it is the more minor ailments that don’t get treated when health spending is lower. Or, there could be external factors, such as obesity, environment and lifestyle, which we haven’t been able to look at yet, that tend to offset the beneficial effects of greater health spending in Australia.”

The partnership, funded by the Australia-Korea Foundation, is giving researchers on both sides a chance to look at the similarities, strengths and weaknesses of their respective health systems. With major implications for health policy, the partnership has the potential to improve the health of millions of Australians and Koreans.

Dr Butler is particularly interested in the Korean Government’s recent decision to reject a program which allowed doctors to dispense the drugs they prescribed.

The system was rejected because it gave the doctors a clear financial interest in prescribing medication — a problem Dr Butler feels could arise if Australians pharmacists are given the right to prescribe drugs.

“They wrote the prescriptions and supplied the drugs, which gave them a strong financial incentive to prescribe. This is useful for us because there is pressure from pharmacists in Australia to be able to prescribe.”

While both Australia and Korea have a system of public health insurance, allowing state funding for treatment, the scope of the two systems is very different.

Australians are likely to meet less than 20 per cent of the cost of their treatment as an out-of-pocket expense, while official figures suggest a Korean hands over 44 per cent of his or her treatment costs as out-of-pocket expenses.

Professor Bong-min Yang, Associate Dean (Academic Affairs), Graduate School of Public Health, Seoul National University, who visited ANU this year as part of the partnership program, believes that in many instances, financial considerations will make poorer people think twice before seeking medical help in all but the most acute of cases.

“There is inequality in health care utilisation (in Korea),” he said.

“The rich consume (health care) without any barriers, but in below-average income groups they cannot consume because of this financial barrier, so there is a difference in the health status among social classes. We are considering policy changes to improve this.”

Such a change might be to model health insurance contributions on the Australian system, where as a proportion of income, the rich pay more and the poor pay less.

Another area where the Koreans are learning from Australia is in the area of charging for drugs. In Korea, more than 20,000 medicines are approved and patients can claim their cost back from the state.

However in Australia, where approval is based on a cost-benefit analysis and only those medicines that give large health benefits relative to their cost can be claimed, only 9,000 drugs are on the list. Such a system is now being considered for Korea.