American Versus Australian Healthcare System

Topic: Administration
Words: 1696 Pages: 6


The 21st century represents an era where access to healthcare became a matter of national and international concern. The United Nations considered it a fundamental human right after multiple countries faced serious crises of co-occurring diseases. Healthcare systems across the world differ significantly from each other, especially due to the differences in philosophies and size of the nations’ economies. Across the developed world, the United States ranks the highest in terms of healthcare expenditure, almost twice as much as the average Organization for Economic Co-operation and Development (OECD) country. However, such expenditure does not mean that the United States has the best system as illustrated by the fact that life expectancy is the lowest and suicide rates the highest among the OECD countries (The Commonwealth Fund, 2020). The focus of this essay is to compare and contrast the American healthcare system with another from a developed country, in this case, that of Australia. American system should be modelled around that of Australia to help solve the major challenges it faces.


The differences and similarities between the American and Australian healthcare systems can be explored from multiple angles. The structure and organization of the systems will be discussed in greater detail in the section that follows. However, it is important to acknowledge that both countries have complex and multi-tiered systems. The Australian system has two tiers comprising private and public providers. The system is national, which means the same structure across all regions as manifested by the national public health insurance scheme. On the contrary, the United States is a pluralistic healthcare delivery system comprising many different organizations. All the providers fall within two broad categories: public and private, but the delivery and operations differ across the states.

Australia has been more successful in implementing Medicare, which is safe and affordable for all residents of the country. The implementation of Medicare takes place with the cooperation of the federal, state, and local governments. On the contrary, Medicare in the United States has been less successful and less cooperation between different levels of government is observed. For example, the federal and state governments provide Medicare for retirees and Medicaid to low-income earners. Additionally, employers are responsible for providing private health insurance to Americans. Overall, both countries have national healthcare systems but different implementation and coverages. The main difference is the fact that Australia has free and high-quality hospital care for all citizens, permanent residents, and specific visa holders (O’Brien & Dalton, 2017). As for the United States, Medicare and Medicaid are paid through the taxpayer’s money, but only target the very low-income earners and the elderly. Health insurance cover is mostly obtained through employers and is only available for full-time employees.

Differences and similarities can also be observed in clinical management and professional roles. In Australia, the roles are more generalized where the general practitioner handles such roles as managing the overall healthcare of a patient and directing referrals. The United States does not have such a role and, instead, employs a range of specialists to provide primary care. Examples include general internal medicine, pediatrics, obstetrics and gynecology, and family practice. In terms of clinical management, pediatricians are considered to be the primary care physicians in the United States and tend to provide most of the primary and specialized care to children. In Australia, pediatricians are mostly viewed as consultants since the general practitioners provide much of the primary care to children. Medical education in Australia was initially offered by the public teaching hospitals, but this has changed within the last three decades where medical education is offered through community-based medical education. The onset of the discipline of general practice and the rise of rural clinical schools contributed to this shift. In the United States, students have to pass national examinations, progress to clinical years, graduate and obtain medical licenses.

Structure and Organization

The structure and organization of the two healthcare systems differ considerably, majorly since they have achieved different levels of universality. According to Lee et al. (2020), the United States is the only developed country without a universal health care system. Therefore, the American system comprises a publicly and private-funded patchwork of fragmented programs and systems. At the federal level, the government provided Medicare, Medicaid, and other specific programs such as Indian Health Services. Medicare is national social insurance targeting seniors above 65 years and the disabled. Medicaid is a state-based insurance program accessed by the poor. Even though Medicaid is part of the federal programs, it is practiced at the state level, where it is managed and partially funded. The healthcare providers are loosely structured and organized and mostly operate at the local level. Hospitals can open and close based on such factors as community resources, market dynamics, or preferences. Similarly, physicians can open a private practice as they chose. Therefore, even though funding takes place at the federal and state levels, the organization of the providers is local. Similarly, there is no health planning at the federal level, whereas state-level efforts vary across the states.

The Australian healthcare system is structured and organized around Medicare, and healthcare planning takes place at the federal level. Medicare is the backbone of the healthcare system, which comprises three major parts: public hospitals, medical services, and medicines. Additionally, Medicare covers all costs of public hospital services and some or all costs of other health services. Examples of other health services include those provided by general practitioners and medical specialists. Private health insurance also covers a significant part of the healthcare funding in the country. However, it is Medicare that is central to the operation of the system. The healthcare system is also organized across various providers, including medical specialists, nurses, allied health workers, and primary care services delivered by the general practitioners. All the providers are managed at the federal, state, and local levels depending on the nature of support. For example, the federal government offers funding and indirect support for inpatient and outpatient care through various federal programs (Glover & Woods, 2020). The states own and manage service delivery for public hospitals, public dental care, ambulances, and community health. Lastly, local governments provide community health and preventive health programs.

Issues and Challenges

The Australian and American healthcare systems face different issues involving the costs and the effectiveness of care delivery. In the United States, the most pressing issues revolve around the high cost of healthcare where the country spent $9892 per capita in 2016 as compared to Australia’s $4707 per capita (O’Brien & Dalton, 2017). As such, the American healthcare system is the world’s highest expenditure. The main concern associated with these costs is that the quality of life of the American people does not seem to improve. On the contrary, life expectancy is lower than most of the OECD countries. The causes of high costs include higher service costs, a large number of tests, lack of controls limiting costs of private insurance, and greater administrative costs. The United States lacks stiff regulations on the healthcare system. For example, there are no strong regulations on what fees hospitals can charge, and the same applies to doctors, pharmaceutical companies, and insurance companies. The market structure of the country is deemed to be the main factor for these situations, especially for a country that prioritizes freedom of choice, minimal government involvement, and low tax.

In Australia, the costs are not as high as those of the United States due to the success of a universal healthcare system. However, the most pertinent issue with the Australian healthcare system is the disparities between the Aboriginal and Torres Strait Islander population and the rest of the Australian residents (Glover & Woods, 2020). The disparities are considered unacceptable, which has forced the government to make deliberate and desperate efforts to find a solution. In many ways, the aboriginal population of Australia is left out of most of the formal programs for several reasons, one being the indigenous Australian self-determination and perceived autonomy. The access to healthcare among the aboriginals may also be a cultural issue, especially when this population remains adherent to their traditional practices. The disparities are being addressed through incentives offered to the general practitioners and other health workers to allow them to attract more practitioners to rural areas and aboriginal patients to the formal healthcare programs. The success of the various strategies used is positive but very slow, which means that the disparities remain one of the most pertinent issues with the Australian healthcare system.

Modeling Healthcare

The comparison of the two healthcare systems reveals that the Australian system is far more efficient and effective than that of the United States. Therefore, the position taken is that the American system should be modelled around that of Australia, which can be defended by considering what would happen. The first defense is that modelling around the Australian system would make healthcare universal, free, and accessible to all Americans. As such, health care planning would take place at the federal level and all services organized around a central planner and funder. The second defense is that such a system would mean that patients would pay less due to the controls and regulations by the government, which addresses the pertinent issue of high costs of care. The third defense is that some of the aspects of the American system can be retained, including the provision of health insurance by employers to help ease the burden on the taxpayers. Medicare makes it possible to distribute the resources to the unemployed and low-income earners, whose contributions to the program can be eliminated.


The Australian health care system ranks among the best in the world while that of the United States ranks among the lowest in the OECD. The inherent differences between the two systems are the main reason for varying levels of efficiency and effectiveness. However, both countries use federal funding that trickles down to the state and local levels. However, the Australian system is universal while that of the United States is not. Therefore, the American system suffers major issues associated with high costs, while the Australian system faces lesser challenges involving disparities between the aboriginals and the rest of the population.


Glover, L., & Woods, M. (2020). International health care systems profiles: Australia. The Commonwealth Fund.

Lee, N., Karsten, J., & Roberts, J. (2020). Removing regulatory barriers to telehealth before and after COVID-19. Brookings.

O’Brien, L., & Dalton, S. (2017). Healthcare comparison of the U.S. and Australian healthcare systems. Onthewards.

The Commonwealth Fund. (2020). U.S. health care from a global perspective, 2019: Higher spending, worse outcomes? Commonwealth Fund.

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