The Healthcare Finance System from the Australian and Nigerian Governments Perspective

Introduction: -

Over the last decades, the understanding of the importance of established appropriate health finance has been increasing at a global level. The health financing system, which mainly concerns organizing fund resources and how they are generated and used in the health system, is one of the most important key factors for a successful health system. Furthermore, three crucial functions are used to achieve these terms, including: revenue collection, such as taxation, risk pooling which is a technique used to protect people from unsuspected expenditure and purchasing which is the process that used pay government to pay the provider of health such as health workers.(World Health Orgnisation, 2018b). However, in 2014, the total health expenditure in Australia was around 9.9% of the total GDP and Nigeria was around 3.7%(World Health Orgnisation, 2018a, 2018c). Therefore, in order to illustrate these significant differences, a comparison between (HICs) such as Australia and low-middle income countries (LMICs) such as Nigeria, will be taken into consideration in this essay. This will be done by focusing on the health financing systems for Australia and Nigeria and reform in this sector and some recommendations that may help to protect the poor society will be given.

The Sources of financing for the healthcare systems in Australian and Nigerian: -

Government sectors are responsible for most of the health funds in Australia. According to Australian Institute of Health and Welfare (2016), between 2013 and 2014, around 68% of the health expenditure was primarily covered by governments. While the Australian government was responsible for 41%, state and territory governments contributed around 27% of total health expenditure. In addition, the non-government expenditure was around 32%. The distribution of this percentage was between the private sector 8.3% and the out of pocket expenditure which was around 18.8% from the total the health expenditure between 2013 and 2014. On the other hand, the contribution of the government is still low which was around 6.7% in 2012(Ejughemre, 2014). One of the main ways the Nigerian government collects revenue for financing its health care system, is mostly from pooled and un-pooled sources. Pooled sources are mainly from direct and indirect taxation, donor funding and budgetary allocation. Also, Un-pooled sources account for a disproportionate amount of 70% contribution to health expenditure. Moreover, the health expenditure from formal and informal payments to health care professionals during the time of service was 90% of the total health expenditure, compared to 10% for payments of medical products and goods(Uzochukwu et al., 2015). Although Nigeria has multiple ways to make payments for health services, the regional areas are still unequal in terms of expenditure. 

Health financing reforms in Australian and Nigerian: -

In Australia, all citizens are covered by the universal health system, which was established in 1984(Amanda Biggs, 2004). The insurance covers many health needs, such as the treatment at a public hospital or fees for a general practitioner under the Medicare Benefits Schedule (MBS). Part of the prescription medicines price is covered by Pharmaceutical Benefits Scheme (PBS)(Private Health Insurance Ombudsman, 2018). In 2015, Primary Health Networks and MBS Review beside the Primary Health Care Advisory Group, were established by the federal government in order to support the poor and those with special needs (Mossialos, Wenzl, Osborn, & Sarnak, 2016). However, since 2000, the government has been encouraging people to enroll in private health insurance by establishing the rebate for private health insurance premiums(Australian Bureau of Statistics, 2012). Therefore, almost half of the Australian population had private hospital coverage and general treatment coverage 47%, 56% respectively in 2015(Private Health Insurance Administration Council, 2015). As a result, the burden on public health insurance may lesson, resulting in more effective services particularly for poor society. On the other hand, in 2007, with the help of the Dutch Ministry of Foreign Affairs, the first health Insurance Fund Model was started in Kwara. In addition, the insurance particularly focused on primary health, which was covering farmers and their relatives in northern Kwara. However, with around $2 per person per year, the impact on the on Nigerian health system was huge. For example, an estimated number of 67,000 people enrolled in the insurance(Gustafsson-Wright & Schellekens, 2013). With the increased number of people enrolled, the engagement with health services overall provided several beneficial factors for both patients and service providers. 

Discussion of the Australian and Nigerian health financing systems: - 

Based on the aforementioned analysis above, the Australian government has undertaken different decisions to improve the quality, equity and the delivery of the Australian healthcare system. In a stark comparison, the role of the government in Nigeria is in great need of additional support. Therefore, the two recommendations to improve the health finance system will focus on Nigeria. First, the role of private health insurance could make a significant difference in improving the overall finance health system by assisting the government’s current attempts(Ejughemre, 2014). This may be achieved through key reforms that scale up and ensure strict regulation of private health insurance, as demonstrated by the Health Insurance Fund Model in Kwara, mentioned above. Secondly, through stricter regulation of taxation services, major improvements to the finance health system could be made. Because the out-of-pocket expenses in Nigeria are extremely high and the GDP is low, an improved and highly regulated taxation system will allow the government to retain funds and allocate them to the health care system. 

Conclusion: - 

It is believed that the Australian finance health system is efficient and more than adequate in comparison to the Nigerian finance health system. The role of governments is clearly observed in the Australian finance health system, in contrast to the Nigerian. In light of this, measurements such as the Health Insurance Fund Model in Kwara and better regulation of taxation, should be implemented to improve the overall current finance health system in Nigeria. Failure to address this may continue to negatively impact the poor and most vulnerable.