Up to bat on healthcare reform in Australia

IMG_0856 I arrived at Sydney airport early this morning and transferred straight to my hotel, the Sir Stamford at Circular Quay.  The hotel, where I’ve also stayed on previous visits, offers an ideal location that is just a short walk from the Sydney Opera House and the Royal Botanical Gardens.  After a quick shower, I ventured out along the harbor, around the Opera House and then deep into the gardens.  It was all I needed to clear my head after the 17-hour flight from Seattle.  The walk and exposure to early morning sunlight is also part of my routine to overcome jet lag.  Looking at my schedule for the upcoming week, I had better get adjusted to local time fast.

Fruit Bats (2)One of the things I love about Australia is the amazing flora and  fauna.  Even here in the city the cacophony of wild parrots and a wide variety of other exotic birds quickly reminds you that “you’re not in Kansas anymore”.  That was especially evident today when I looked up at some trees in the park and noticed what I first thought were unusual black seed pods hanging from the branches.  On closer inspection I soon realized that the “seed pods” were moving.  The trees were dense with a gathering of very large fruit bats.  The only other time I’ve seen wild bats of this size was on vacation in Bali many years ago.  Now here they were in the middle of a city park just a few hundred yards from my hotel.  I guess I’ll think twice before walking in the botanical gardens at night.

IMAG0042 As I turned back toward the Sydney Harbor promenade I quickly found myself amidst a popular outdoor market.  It was there I saw a sign on the sidewalk that quickly reminded me why I had come back to Australia for the fourth time in as many years.  I’m here to talk about health.  And although the theme for my multi-city business tour revolves around technologies to assist hospitals and government agencies with clinical care and care management coordination, I have no doubt that I’ll be getting plenty of questions about healthcare reform.  And no, I don’t mean what we’ve just been through in America.  I mean healthcare reform that is happening here in Australia.  You see, the government has just completed a lengthy planning process that will result in the most significant shift in healthcare for Australians since the inception of Medicare (their Medicare, not ours).  Here’s what is being proposed by the National Health and Hospitals Network for Australia’s Future:A National Health and Hospitals Network for Australia's Future - report cover

  • Create a single national network of hospitals, instead of eight separate systems
  • Be funded nationally, with the Australian Government shouldering the majority of the funding burden, which will mean more money is available to meet rising health costs
  • Make sure local doctors and nurses with local expertise are making the important decisions for local hospitals

I’ll share more in the days ahead as I have an opportunity to interact with clinicians, hospital executives and government officials in Australia.  They will no doubt also be seeking my thoughts on American health reform.  In fact, all around the developed world governments are looking for new ways to  improve access to care, increase care quality, and control the escalating  costs of care associated with aging populations and a higher incidence of chronic disease.  While Americans may think that other countries have already figured this out, let me assure you it is a debate that is “up to bat” everywhere.

Bill Crounse, MD  Senior Director, Worldwide Health   Microsoft 

Comments (6)

  1. Travis Simon says:

    I don’t mean this to sound rude (or condescending), but do you actually understand the health care reform in the US? I’ve tried following it from here (Aus), but have been hard-pressed to find many details. It’s quite a large bill .. .

  2. hlthblog says:


    I don’t know that anyone fully understands the entire scope and ramifications of the bill (including many in Congress who voted for it).   Here is a nice synopsis of what the bill means to employers and group health plans in the US.  This summary was prepared by legal firm Stoel Rives.

    Impact on Employers and Group Health Plans

    April 1, 2010

    The health care reform legislation passed by Congress places significant new responsibilities on employers, group health plans, insurers, and individuals. This alert gives a brief overview of the most significant issues affecting employers and group health plans, in order of effective date.  

    Effective Immediately

    • Qualifying small businesses that have fewer than 25 full-time employees and whose employees have average annual wages less than $50,000 may be eligible for tax credits to purchase health insurance for their employees.

    • Coverage for dependent children may qualify for tax-free status through the taxable year in which the child turns age 26.

    Effective Date Dependent upon Issuance of Regulations

    • Employers with more than 200 employees must automatically enroll employees into health insurance plans offered by the employer.

    Effective June 20, 2010

    • A temporary reinsurance program will reimburse participating employment-based plans for a portion of the cost of providing health coverage to early retirees and eligible dependents (ending January 1, 2014).

    Effective for Plan Years Starting October 1, 2010 or Later

    • Plans cannot place lifetime dollar limits on coverage.

    • Adult children must be covered until age 26 (for grandfathered plans*, adult children must only be covered if they do not have access to their own employer-sponsored coverage).

    • Annual dollar limits on coverage must comply with guidance from the Secretary of Health and Human Services. The Secretary must issue such guidance on annual limits by June 20, 2010.

    • Plans cannot have pre-existing condition exclusions for children under age 19.

    • New plans** must provide preventive services and immunizations without any cost sharing.

    • New plans must meet internal and external review procedure standards for claim determinations.

    • Nondiscrimination rules formerly applicable only to self-funded group health plans are now applicable to new insured group health plans.

    Effective January 1, 2011

    • Employers must report the value of employer-provided health coverage on each employee’s W-2 form.

    • Nonprescription drugs cannot be reimbursed tax-free through a health savings account (HSA).

    • Nonprescription drugs cannot be reimbursed through health reimbursement arrangements or health flexible spending accounts (FSA).

    • The tax on HSA distributions not used for qualified medical expenses will increase to 20 percent.

    Effective 24 months after enactment (March 2012)

    • Plans must provide participants with a four-page summary of benefits, in accordance with regulations that must be issued within 12 months of enactment (March 2011).

    • Plans must provide notice 60 days before plan changes.

    Effective January 1, 2013

    • The Medicare Part A (hospital insurance) tax rate on earnings over $200,000 ($250,000 for married couples filing jointly) will increase from 1.45 percent to 2.35 percent (only the employee portion is increased, not the employer portion), and there will be a 3.8 percent tax on unearned income for high-income taxpayers.

    • There will no longer be a tax deduction for employers who receive Medicare Part D retiree drug subsidy payments.

    • Health FSA contributions will be limited to $2,500 annually.

    Effective January 1, 2014

    • Plans cannot have pre-existing condition exclusions for adults (age 19 and over).

    • Plans cannot have annual dollar limits.

    • Employers will be required to separately report the value of an employee’s health benefits to the federal government (in a form to be developed).

    • Waiting periods for coverage will be limited to 90 days.

    • Employers can offer employees rewards of up to 30 percent of the value of coverage for participating in wellness programs and meeting certain health-related standards.

    • Children must be covered until age 26 even if they have access to their own employer-sponsored coverage.

    • Employers that have more than 50 employees and do not offer coverage must pay a $2,000 fee per full-time employee (excluding the first 30) if any of their full-time employees receive a premium tax credit.

    • Employers that have more than 50 employees and offer coverage but have at least one full-time employee receiving a premium tax credit must pay a $2,000 fee per full-time employee or $3,000 fee per employee receiving the tax credit (whichever is less).

    • Employers that offer coverage must offer low-income employees a “free choice voucher” that the employee can use to apply the value of the employer-provided coverage to the cost of enrolling in a state-based Health Benefit Exchange.

    Effective January 1, 2018

    • An excise tax will be imposed on health insurance issuers and plan administrators of employer-sponsored health plans with aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage. The tax will be equivalent to 40 percent of the value of the plan that exceeds the threshold amounts. Vision and dental coverage will not be counted as part of value of employer-sponsored coverage if it is provided under a separate policy, certificate, or contract of insurance.

    Bill Crounse, MD

  3. john smith says:

    what is now on offer although not perfect is far better than what we have now and where we are heading,

  4. Roger says:

    Ive been to Sydney once and loved it!   Great Blog !

  5. Roger says:

    ya, the place where healthcare is headed is very scary !

  6. hlthblog says:


    Thanks for your comment.  I don’t think the future needs to be scary.  In fact, the healthcare industry can be much improved with technology and a greater focus on improved care quality, safety, and satisfaction.  The industry must move from one focused only on sick care to one focused on prevention and better health.

    Bill Crounse, MD

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