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December 25, 1996

The Australian Health Care SystemAre the Incentives Down Under Right Side Up?

JAMA. 1996;276(24):1944-1950. doi:10.1001/jama.1996.03540240022014

AFTER EXAMINING the Australian health care system, readers should recall George Bernard Shaw's comment about 2 countries separated by a common language. The statement is more than just poetic when the subject is health. Any comparison of the United States with Australia is facilitated by a familiar nomenclature, a shared heritage, and a similar practice of medicine. The mortality and morbidity rates in the 2 countries are comparable. In addition, the existence of parallel public and private financing of services in both countries leaves an overall impression that little distinguishes Australia from the United States.

Despite comparable outcomes and similar revenue sources, there are marked differences in the organization, funding, and delivery of health care in the 2 countries. Australia's system is financed by public and private sources that are designed to operate in parallel, while costs are regulated by a combination of global hospital budgets, strict fee schedules, and