The Australian Health System

In order to effectively use the health system in Australia, it's important we know how it works.

Defining Primary and Secondary Healthcare

Determinants of Health in Australia
(coming soon)

The Australian Health System is a fantastic one. When we compare accessibility and affordability to the system in the United States for example, we always proclaim how fortunate we are. It's described by the Australian Institute of Health and Welfare as "a multifaceted web of public and private providers, settings, participants and supporting mechanisms", which collaboratively form the universal system in place (2016). The big question is however, how do we go about understanding and navigating this comprehensive web? 

The Australian Health System is dependant on a range of different organisations and professionals collaboratively providing services and resources. Without each interacting facet, the system simply would not work.

The wide range of health services at the core of the Australian Health System include community based public and preventative health services, primary health care, emergency health care, public/private hospital based treatment, and rehabilitation and palliative care. All services are provided by both government and non-government agencies, and require the incredibly important work of medical practitioners, nurses, allied health and other health professionals (AIHW, 2016). 

Further input comes from research and development agencies dedicated to providing up to date information on disease prevention, detection, treatment, care and statistics. The provision of this important information assists in the development and implementation of current health policy, which is supported by the input of consumer and advocacy groups devoted to improving the health of all Australians. In support of such,community organisations have an exceptionally important role,  including fund raising, the provision of education and promotional health programs, including those that are culturally and linguistically relevant, and the coordination
and provision of voluntary care (AIHW, 2016). 


Who's responsible for what?

All levels of Australian Government are responsible for the management and provision of health services. 

Australian Federal Government

  • National Health Policy

  • Medicare* 

  • Pharmaceutical Benefits Scheme*

  • Regulation of medicines and medical devices

  • Community controlled Aboriginal and Torres Strait Islander Primary Health Care*

  • Health services for veterans

  • Regulates and supports access to private health insurance

  • Funding for medical research and development

State and Territory Governments

  • Management of public hospitals

  • Private hospital licensing 

  • Ambulance services

  • Provision of community based primary health services

    • mental health​

    • dental health

    • alcohol & drug services

  • Provision of prevention services

    • cancer screening​

    • immunisation programs

  • Handling health complaints 

Local Governments

  • Provision of environmental health services

    • waste disposal​

    • water supply

    • food safety monitoring

  • Provision of some community and home based health and support services

  • Provision of some public health/health promotion programs


  • Health workforce regulation

  • Education and training for health professionals

  • Funding of public health services and programs*

  • Funding of dedication Aboriginal and Torres Strait Islander health services and programs

  • Pharmacy and pharmaceutical regulation

(AIHW, 2016).

* More information below


There's a lot that goes into the system behind the green card we keep in our wallets. While it can appear to be a magical process of rebates and free health services on the surface, behind the scenes is a coordinated structure dedicated to fulfilling the schemes purpose: providing subsidised healthcare to all Australians.

Medicare is run by the Australian Government Department of Human Services, with particular divisions managed by the Department of Health under this umbrella.


The exceptionally broad range of subsidised services offered by Medicare can be found in the Medicare Benefits Schedule (MBS). Each eligible medical service is allocated an item number, which has a specific fee associated with it. This fee is known as the Medicare Schedule Fee. 

If you're enrolled with Medicare, when you visit a medical practitioner, optometrist, dentist or other allied health professional, one of two things will absolutely happen.

  1. You'll be Bulk Billed, where the practitioner accepts 85% of the Medicare Schedule Fee as full payment for the service provided to you; or 

  2. You'll be issued a patient account, where the practitioner charges a set fee liable to the patient, for which a rebate is accessible for all MBS listed items.

    • If you are charged the Medicare Schedule Fee, you will receive a Medicare rebate totaling 85% of what you paid

    • If you are charged a larger fee, which is common at smaller GP clinics, private specialist clinics and allied health clinics, you will receive a rebate totaling 85% of the Medicare Schedule Fee, however will have a larger out of pocket fee (Department of Health, 2018).

For patients with large medical expenses, the Medicare Safety Net is in place to provide some financial assistance. Once patients meet a specific threshold, their Medicare rebates will be increased to cover a higher percentage of the fee paid on all MBS items, rather than just the regular rebate. For more information on the Medicare Safety Net, click here

Additional benefits include free care as a public patient in a public hospital, and a rebate of 75% of the Medicare Schedule Fee on MBS listed services and procedures in a public or private hospital as a private patient (Department of Health, 2018).

The Pharmaceutical Benefits Scheme

Complimentary to the MBS is the Pharmaceutical Benefits Scheme (PBS). 

We hear often how the costs of essential medicines can financially cripple families. Fortunately in Australia, the PBS is in place to assist in subsidising the cost of such pharmaceuticals to ensure they are financially accessible to those who need them. With a Medicare card you are eligible to receive your medication at a discounted rate, and the Australian Federal Government will pick up the rest of the bill for you. This discount is even greater if you have a pension, concession, Department of Veterans affairs or Medicare Safety Net card (Department of Health, 2018). 

That's just the basics, and the PBS is always changing and growing. I'll dive deeper on this in a more comprehensive manner once this platform is a bit more established. 

Who funds the Health System?

In the year 2015-16, Australia's total health expenditure was $170 billion, which accounted for 9.6% of the annual Gross Domestic Product. Of this total figure, the Australian Federal Government contributed $70 billion, and State and Territory Governments contributed $44 billion. An additional $29 billion was funded by individuals, and the remaining $27 billion covered by other non-Government resources such as private health insurance funds, third party insurers and workers compensation organisations (AIHW, 2018). 

The Australian Federal Government collects the Medicare Levy, which is paid by every person with an income above $18200. The exact figure is 2% of the eligible individuals income. If you're an Australian resident for tax purposes, your employer will typically pay this with your regular income tax each time you get paid, but the actual figure your responsible for won't be calculated until you lodge your tax return (Australian Tax Office, 2019). If you're a pensioner or low income earner you may be eligible for a Medicare levy reduction or exemption, so it's a good idea to look into this before you lodge your annual tax return. You can find out more here! 

Unfortunately, the Medicare levy alone does not collate a total high enough to cover costs of all Medicare services in Australia. As a result, both the Federal and State/Territory Governments contribute from additional taxation pools.​ The collation of such combined funds allows the Federal Government to provide funding to each State/Territory Government to manage and run health services, such as hospitals and community health centres. The State/Territory Governments are reliant on the Australian Federal Government for health funding. This funding is distributed via a grant system, whereby the Federal Government will either agree or disagree to provide the funding. If funding is not approved, state/territory governments can provide funding themselves (AIHW, 2018).


Additional funding is collated from non-Government agencies, and external stakeholders. This often goes to research and development, as well as assists in the building and maintenance of health facilities such as hospitals. 

Page References

Australian Institute of Health and Welfare. (2016). Australia's Health 2016. Retrieved 4th January 2019, from:

Australian Institute of Health and Welfare. (2018). Australia's Health 2018. Retreved 4th January 2019, from:

Australian Tax Office. (2019). Medicare levy. Retrieved 11th July 2019, from:

Department of Human Services. (2018). Medicare Services. Retrieved 4th January 2019, from:

Stephanie Says acknowledges the traditional custodians of the land on which we live - the Wurundjeri people of the Kulin nation. We acknowledge their Elders past, present and emerging. Always was, always will be Aboriginal land. 

Note: Stephanie Sayss is not run by medical professionals. This platform is an educational tool only, and not intended to be used for medical advice. Always seek the assistance of a doctor - this platform is intended to be used a tool to assist you in doing so.

All references are cited on the page they are relevant to. 

©2019 by Stephanie Sayss.