Australians Offer US Tips on Health Care

AS the United States Congress wades deeper into the difficult debate over reforming the nation's health care, it might want to take a look down under.

Australia went through a similar experience in the 1970s. It had a system similar to the present American system, and faced the same difficult issues of reform.

``We had very tough political obstacles to get around,'' says Peter Botsman, executive director of The Evatt Foundation, a liberal think tank here. ``The doctors managed to change the Constitution so they couldn't get conscripted into a national health service. They closed down one state's [New South Wales] hospital system for seven months and refused to work.''

Dr. Botsman, who has written a national health-insurance strategy for the US, travels frequently to Washington to clarify misconceptions about the Australian system.

``My message for the US is that you can have a single-payer system with choice, diversity, and cost containment that satisfies all consumers' needs about health care,'' Botsman says. ``And you can have a private hospital system and a private health insurance system coexisting alongside a dominant single payer.''

Australia's 12-year-old universal health insurance system is funded by a flat 1.5 percent levy on gross income over A$10,000 (US$7,100) for singles, as well as through general revenue.

Hospital care is free, as are most physician visits; pharmaceuticals are subsidized. Costs are set by the government, but it does not limit what doctors can charge. Low-income earners and pensioners hold a health card that entitles them to additional services. Safety nets ensure that out-of-pocket spending is capped. Medicare customers can choose their own physicians on a daily basis.

Costs have been consistently held to 8 percent of GDP, says Lesley Russell, manager of public affairs for the drug company Merck, Sharpe & Dohme. Health care costs in the US account for 14 percent of GDP, and are expected to rise to 19 percent within five years, she notes. Botsman says the cost comparisons alone are dramatic: Administrative costs in Australia in 1987 were US$19 per capita; in the US they were $95. ``If you phased in the Australian system over eight years,'' he says, ``the US would save between US$891 billion and $US3 trillion.''

And, he says, allaying US fears about a bloated and intrusive bureaucracy, the Australian health insurance system is only concerned with the monitoring of costs and ensuring that payments are made promptly, not with the actual delivery of services.

Australia's reform process took years, starting in 1972. Along the way, a conservative government scrapped the program and another liberal leadership started over with a new one.

``It's kept costs under pretty tight control. That raises some conflict with doctors and with private hospitals,'' says John Deeble, health services fellow at Australian National University in Canberra, who helped design the 1973 and 1984 programs.

``One of the important things this system has done is to put a cap on litigation,'' says a spokesman for former Minister for Health Graham Richardson. ``Lawyers' fees are limited to 30 percent of the final settlement.'' With guaranteed medical care, Australians do not have the worry about high medical expenses, thus taking away a motive for lawsuits, Dr. Russell says.

Rep. Ben Cardin (D) of Maryland, a member of the House Subcommittee on Health who participated in a satellite phone call with Botsman and Russell Wednesday, sees difficulty in adopting the Australian program. ``People ... don't want more federal bureaucracy,'' he says. ``I know you're not going to see a single-payer system be passed by this Congress. But in terms of cost containment, the right of choice, and a guaranteed national benefits package, hopefully all these will be in the bill we pass.''