Private psychiatry and Medicare: Regional equality of access in Australia?

Abstract

Background: Private psychiatric services are produced and consumed on a fee-for-service (FFS) basis in Australia. The Commonwealth Government subsidises these (and all) medical services via Medicare, a universal, comprehensive, tax-financed medical and hospital financing mechanism. A key purpose of Medicare is to improve equality of access to medical services.

Aims: To measure the distribution of “access”, as measured by utilization, to private FFS psychiatric services at a regional level; and to determine the temporal trend in equality in regional access to these services during the Medicare period.

Method: Conventional measures of statistical dispersion and economic inequality (the coefficient of variation, Gini coefficient and the Atkinson measure) are applied to quarterly time-series data on quantities of private psychiatric services for Australia's regions since 1984. Equations are modelled statistically on the distributional data generated by applying these measures. Lorenz curves are also constructed.

Results: The negative sign on the slope coefficients in all estimated equations, i.e., for each measure of the distribution, is statistically significant, but the slope coefficients are nearly zero.

Conclusions: These preliminary results suggest relatively intractable movement in alleviating inequality in the private psychiatric services produced and consumed in Australia, at the broad level of the region, during two decades of Medicare subsidies.

Keywords:

• Access
• psychiatric services
• distribution
• Australia
• Medicare

Notes

1. These studies are cited in Williams & Doessel (2006a).

2. Medicare Australia (previously, the Health Insurance Commission) collects data as a by-product of the funding arrangements of Medicare, and these data are made available to the CDHA.

3. Australia has six States, and two Territories (the Australian Capital Territory and the Northern Territory). The Territories are relatively small in population, and have some different political responsibilities from the States.

4. The CDHA implements a procedure of aggregating “small cells”, which arise with data for some items relating to the low population groups in Australia's Territories.

5. Some readers will be interested to note also, as a comparison, the research design of two recent studies of the spatial distribution of mental health expenditure in England (Moscone & Knapp, 2005; Moscone, Knapp & Tosetti, 2007). That research design reflects the richer data sets available for research on this topic in England.

6. Major data limitations are indeed a normal part of economic studies of many aspects of Australia's health sector.

7. The Gini coefficient can range in value from zero to unity. The former value represents perfect equality and the latter value represents perfect inequality.

8. The Atkinson measure of inequality requires an assumption for the inequality aversion parameter ϵ. As the value of ϵ rises, relatively more importance is attached to making distributional transfers that ameliorate inequality at the lower end of a distribution. There is no empirical work available that sufficiently informs that assumption and, thus, two assumptions that represent quite extreme values for ϵ were adopted. A lower value represents an assumption that aversion to inequality at the lower end of the distribution is weak, and a high value represents an assumption that aversion to inequality is strong. The two assumptions applied in this study are: ϵ = 0.2; and ϵ = 1.4.

9. In Australia, the diagnoses treated by the public and private sectors are quite different. The issue of inequality between these two sectors is an important topic, worthy of separate investigation.

10. The measure of this concept in economics is the time price elasticity of demand. See Williams & Doessel (2006a).