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Australian health reform: speech at the China - Australia Health Policy Dialogue, Beijing

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THE HON NICOLA ROXON MP Minister for Health and Ageing


“Australian Health Reform”

China - Australia Health Policy Dialogue,

Shangri-La Hotel, Beijing, China

18 April 2011


 Chinese Minister for Health, Mr Chen Zhu;

 Dr Ren Minghui, Director General of Department of International Cooperation, Chinese Ministry of Health

It is a great pleasure to lead the Australian delegation for the first China-Australia Health Policy Dialogue. We have a comprehensive agenda setting out potential areas for cooperation.

I am keen to hear more about China’s progress in implementing reform and how the Ministry is managing contemporary health challenges.

I would like to brief you on the state of health reform in Australia and suggest some areas where Australia sees scope for enhanced collaboration with China in the health field.

Minister, delivering better health services to citizens is a fundamental role of Government. When we get health policy right, productivity, savings and security are all strengthened.

Different nations have different approaches to health. Dialogues such as this provide a valuable opportunity to learn new ideas and approaches and to help each other to improve our health systems.

Like China, Australia is implementing an ambitious package of national health system reforms. These reforms are designed to ensure that the Australian health system is sustainable while improving health outcomes for all Australians.

The reforms will affect all parts of our health system, including hospital care, non-acute care, primary health care and aged care.

Overview of Australia and its Health System

Australia and China have been working together on health policy for many years, and I know that staff from the Health Ministry have visited Australia on many occasions. So there is no need for me to describe in detail how the Australian

health system works. But let me take this opportunity to provide a brief overview of its key features as this will help to place in context the reform process underway in Australia.

In Australia, state governments retain primary responsibility for delivering health services such as public hospitals and community health care.

The Federal Government - of which I am a member - develops broad national policies, funds public health measures and administers the two universal schemes which are the foundation of our system - Medicare and the Pharmaceutical Benefits Scheme.

Medicare is a universal health insurance scheme which gives all Australians the right to subsidised medical services, and free health care through public hospitals.

The Pharmaceutical Benefits Scheme subsidises essential medicines so they are affordable for all Australians.

In addition, the Federal Government provides funding to the states and territories to assist with the costs of public hospitals.

The system has worked well for many years but an ageing population, rising chronic disease incidence, new technologies and higher consumer expectations, have led to rising health costs.

Modelling by our Treasury Department shows that by 2045, if there was no change, health would consume the entire revenue of state and territory governments.

To address these challenges the Federal Government agreed a comprehensive reform agenda with all State and Territory Governments in February this year. I would like to outline four key elements of this work which should be of particular interest to the Chinese Health Ministry.

These are: health financing, improving primary care, implementing electronic-health measures, and expanding our health workforce.

Health financing

The first major element of the reforms agreed last February is a change to the way health services are funded.

The Federal Government will take on more funding responsibility to help meet the expected growth in demand of health and hospital services.

New standards will make the health system more efficient, more effective and more responsive to local needs.

The Federal Government has agreed to permanently pay 50 per cent of the growth in hospital costs, from 2017-18.

To improve transparency, all governments will put their funding for hospitals into a single national pool, to be administered by an independent national funding body from July 2012.

The Federal Government’s funding for public hospitals will be set according to the actual services provided by hospitals based on a “national efficient cost” set by an independent Hospital Pricing Authority.

There may be elements of the new health financing architecture we are implementing at home that have some applicability here in China. I would welcome further discussions at officials-level to explain in more detail the changes we are making.

Primary Health Care

For the great majority of Australians, their General Practitioner is and will remain their first point of contact with the health system. In any one year, more than 85 per cent of Australians will visit their General Practitioner - or GP.

International research has established that health systems based on strong primary health care are more efficient, have lower rates of hospitalisation, have less health inequalities and overall have better health outcomes, including lower mortality.

For these reasons, the national health reform agreement explicitly acknowledges that improvements in primary health care are crucial to the future health of Australia’s population.

It also recognises the need for effective integration across primary health care services - so the Federal Government will work with the states and territories on system-wide policy and state-wide planning for general practice and other primary health care services.

Better primary health care will also help to make our system more sustainable by effectively managing the increasing burden of chronic disease - I will talk a little more about this later.

An important element of our reforms is the establishment of what we call ‘GP Super Clinics’ to bring together a range of health care services - such as doctors, nurses, visiting medical specialists and allied health professionals.

These services work together to coordinate care for individual patients, especially those with chronic or complex issues.


Assisting this move to multidisciplinary care will be another key aspect of our health reforms - harnessing the potential of information technology or e-health to improve patient care.

The Australian Government plans to enable Australians to register for a personally controlled electronic health record from July next year.

Work is well advanced on this and individual health care identifiers have been allocated to all 23 million Australians.

We are also expanding the tele-health service which allows patients to see a doctor over the Internet or by video.

All of these things will modernise our primary health care, and make it easier for patients to get the correct treatment and advice when it’s needed.

Options for further cooperation on e-health issues between our two ministries could be investigated by our officials as a follow-up item from this Dialogue.

Health Workforce

Improving the health workforce is a key element of our reform agenda.

This means training more doctors and nurses. This is already underway in Australia, and on a much larger scale in China.

But it also means ensuring that health professionals work where they are needed.

Very remote areas of Australia currently have only 42.7 GPs per 100,000 people - less than half as many as in the major cities.

A new national agency is now planning the future health workforce, including a study on whether Australia can be self-sufficient in training its own doctors, by 2025.

The government has also ensured that more training of doctors and nurses is carried out in rural areas, to encourage them to work there when they are qualified; and revised and increased the financial incentives for doctors to work outside the major cities.

Addressing the NCD burden

I have foreshadowed some areas where, over the long-term, we can deepen our cooperation- in areas like health financing and implementing e-health initiatives.

Let me conclude by talking about two areas where perhaps more immediate progress can be made.

Both China and Australia face the challenge of managing the rising burden of non-communicable diseases (NCDs) and in particular, the impact of tobacco use. In Australia, non-communicable diseases account for about 30% of our overall disease burden, while we understand that they constitute 82% of the disease burden in China. We know that in our WHO Western Pacific Region, 30,000 people die every day from diseases that can be prevented, with tobacco use alone claiming 3,000 lives every day. Globally, by the year 2030 non-communicable diseases will account for 80% of all deaths.

Australia is making its largest ever investment in prevention of chronic disease - $872 million over 6 years, which includes the creation of the Australian National Preventive Health Agency, which came into being on 1 January.

We have a national campaign against overweight and obesity, and from July we will be targeting nutrition and physical activity of children and workers. 61% of Australians are classed as obese or overweight, so this is an urgent issue for us.

A particular priority is reducing smoking rates. Our current smoking rate of 16.6% still represents a major economic cost - $31.5 billion per year on current estimates. China’s smoking rate of 28.1% must bring with it a similar drain on your economy.

We have set targets for reducing the national daily smoking rate to 10 per cent or less of the population by 2018 and halving the smoking rate for Indigenous Australians.

We are approaching this with a range of measures to discourage people from taking up smoking, and encourage them to quit.

In April last year we increased the excise tax on tobacco products by 25 per cent.

We have legislation in the Parliament to restrict internet tobacco advertising in Australia, bringing it in line with restrictions on advertising in other media.

We are investing more than $85 million in tough new anti-smoking advertising and marketing campaigns.

We have extended access to subsidies for nicotine replacement therapies,

We are investing record amounts in anti-smoking programs among Aboriginal and Torres Strait Islander communities

And, in a world first, we are closing a major loophole in tobacco advertising laws by implementing plain packaging of tobacco products.

It’s true that our nations and the world have other important health issues, all of which require attention.

But reducing smoking - compared to most of those problems - is incredibly simple and incredibly cost effective, and has huge potential benefits.

I propose that one concrete outcome from this Dialogue be a commitment to share expertise on tobacco control and consider joint advocacy in this field where appropriate.

Infectious disease control

Similarly, both China and Australia have a shared interest in ensuring strong international management of infectious disease outbreaks. Effective pandemic management is crucial. As well as the major global pandemics of recent years, we have learnt much since from the emergence of novel diseases such as Hendra virus and Australia Bat Lyssavirus and would be keen to share our experiences.

China and Australia already collaborate closely on pandemic and emerging infectious disease management issues through various international organizations and strategies including the World Health Organization’s Asia-Pacific Strategy for Emerging Diseases.

We also have a strong relationship in the research and scientific fields and would therefore encourage collaboration with the various emerging infectious diseases centres in Australia such as the Sydney Institute for Emerging Infectious Disease and Biosecurity and the Queensland Centre for Emerging Infectious Diseases and research institutes such as the Menzies School of Health Research, and the James Cook University.

The China-Australia Health and HIV Facility has already undertaken a number of cooperative projects in the area of emerging infectious diseases, but we would also like to explore options for more cooperation at the policy and research level. I understand that the CAHHF could develop a project proposal to take forward the outcomes of the Dialogue and I look forward to our officials considering this and other new mechanisms for cooperation in the discussions that will follow later today.


As I said at the start, the health reform program now underway in Australia is very broad.

My delegation looks forward to sharing with you the lessons from our reform process.

What China has achieved on the health front is extraordinary.

You have built thousands of hospitals, trained over a million doctors, established world-class medical research facilities, and have an impressive disease control record, particularly on HIV and AIDS.

So Australia has much to learn from the Chinese Government’s experience.

I hope that today we can agree on a set of concrete outcomes to take forward in the coming months.

Some of these like health financing and implementing e-health measures are long-term and will require more discussion to frame our interests. In other areas like the response to non-communicable diseases control and pandemic management we may be able to move more quickly with agreed plans of action.

Thank you.