Essay On Health Economics


The Healthcare system has (HCS) a huge advantage in strengthening the economic position of a country. HCS is known as the effective system that provides adequate delivery of different complex services in different hospitals, medical care, and healthcare organizations. This system helps the injured person to recover with the help of advanced technologies. The Australian healthcare system is a well-recognized organization that has provided a significant contribution to the "Organization for Economic Co-operation and Development or OECD" ( 2014). This system has different layers of responsibility and effective funding that are supported by the government. Approximately 2/3rd of the healthcare cost in Australia is funded by the federal and state government and 1/3rd of the cost is funded through the public fund. During the year of 2019 and 2020 the government of Australia has spent over 81.1 billion Australian dollar which comprises of approximately 16% of the total cost ( 2020). However, over time the healthcare needs and demands of individuals have changed, creating immense pressure on the HSCs and organizations. With the advancement of technologies, the complexity of healthcare services has also changed, and this has enhanced the need for new policies and adequate healthcare models (Dixit and Sambasivan 2018). The present report explains the impact of the Australian healthcare system in the context of an Australian primary care and pathology organization Healius. The report also explains the importance of policymakers in reshaping the healthcare business model.

Context Of Case Study Operations

Healius is one of the major primary care and pathology centres that have been listed on the stock market of Australia (ASX) ( 2022). The company is well-known for its improved pathological service and improved policies. It can be stated from the half-year (2022) results of Healius that the company has improved its revenue from the revenue of 2021 (Openbriefing 2022). This indicates the implementation of improved policies which has helped in shaping the business. The Australian government has implemented different health policies such as Medicare policy and the policy scheme for adequate pharmaceutical benefits or PBS. These policies have helped companies in providing high-quality care and support to patients by reducing medication errors (Moran 1999). Apart from policies, funding is another essential aspect that helps in reshaping the healthcare structure. The Australian government has implemented approximately 50.6 billion dollars in healthcare which has helped in effective disease prevention. Private finance helps in covering the huge healthcare cost and is funded by both the citizens and by the federal government (Commonwealth 2022). Healius is one of the major healthcare organizations that provide equal access to all Australian citizens in getting affordable healthcare treatment. Healius maintains governmental policies and allows private funding in order to provide affordable healthcare access ( 2022). The private findings help in reducing the effective healthcare gaps and improving the overall healthcare quality (Commonwealth 2022). The healthcare professionals help in providing quality care to the patients by understanding and meeting their needs and requirements. Healthcare professionals ensure that every patient is getting high-quality care and they respect the patient's preferences for effective healthcare. In Healius a high-quality pathology centre, adequate diagnostic imaging centre and effective day hospital care centre is present which helps in providing excellent and affordable disease screening, laboratory reports and primary care with the help of healthcare specialists ( 2022).


According to the studies of Moran (1999), healthcare policies are one of the leading causes of providing high-quality care in different industrial nations. It has been observed that an effective binding can be observed between the overall healthcare systems and the adequate modern states. Healthcare policies are the leading aspects that have bound the modern states and the healthcare system. It has been observed that before the emergence of democracy, healthcare policies have effectively reduced the overall pressure of democratic politics and adequate competitive capitalism.

The Australian government has developed specific policies such as Medicare, PBS, different services for primary healthcare, and different services for "public health programs" etcetera (Medicare 2022). The public health program policies help in effective disease screening of different diseases such as cancer. This helps medical care professionals in taking adequate decisions. The diagnostic centre of Healius is responsible for approximately 70% of medical decisions and approximately 100% of decisions for cancer diagnoses ( 2022). During the covid-19 pandemic, Healius has provided affordable screening tests for every Australian citizen by following the governmental PBS policy. This has created a strong market and capital position for the organization and has enhanced its overall "cash flow conversion" by approximately 90% (Openbriefing 2022).

Policymakers ensure that every healthcare policy is being addressed properly in order to offer proper health and well-being to every Australian citizen. After BMC application the policy and regulations would be changed for the healthcare organizations, previously two primary policies such as Medicare and PBS were implemented for improving the healthcare quality and for providing resources for high equity health treatment to every individual. However, after the implementation of BMC, the primary focus of the government has shifted to effectively governing the correct usage of resources (Peters et al. 2015).

The governing occurs by both state and federal governments. The state government governs the resource spending by monitoring the tax and different allocated funding (McGreevy et al. 2020). BMC would help organizations by providing ways in which the process of the spending of allocated healthcare funding by the healthcare professionals can be monitored. Moreover, BMC would also allow the governing of private bodies which would help the private organizations in monitoring the ways insurance amounts are being spent (Kühne and Böhmann, 2018). These policy regulations would help healthcare organizations such as Healius in improving their overall healthcare quality (Hwang and Christensen 2008).

BMC helps new and developing companies in effectively attracting investments and recruiting more talented employees. BMC also motivates the administrative management and modifies the business plans (Kühne and Böhmann, 2018).  This helps healthcare organizations like Healius critically tackle different healthcare challenges. Decision-making is an effective key factor that helps in shaping public healthcare organizations and private healthcare organizations. Effective decision-making is done by collecting different data and this helps in decreasing the number of medical errors and improves the overall healthcare quality.

Public/Private Finance

The impact of private and public finance is undeniable in improving the healthcare system of Australia. The overall healthcare system of Australia is huge and has high complexity. The healthcare responsibilities are divided among the state and federal governments, and they bear an equal share of responsibilities ( 2019). It has been noted that the Australian healthcare organizations never bore entire responsibilities by themselves, and this helps in providing high-quality care and service in all healthcare sectors (Commonwealth 2022).  Financial availability is an effective aspect that determines quality care. Both governmental and nongovernmental organizations are responsible for managing the finance sector. The governmental organization maintains the funding allocation, proper policy implementation and effective regulation maintenance ( 2022). The non-governmental organizations on the other hand are responsible for effective cost shifting and reducing the healthcare gaps through their excellent quality care. One of the major advantages of non-governmental organizations is they reduce the service gaps of governmental organizations ( 2022). During the covid-19 pandemic, a huge service gap has been observed due to a lack of resources. However, Healius has shown a strong performance during the covid testing and more than 40000 tests have been done by the organization which indicates strong financial support (Openbriefing 2022). 

Figure 1: Private and governmental findings

The above figure shows the funding structure of healthcare by the private and the Australian government. The total health finance budget has been estimated to be 140.2 billion dollars and approximately 70% of the health budget has been government-funded. However, non-governmental organizations have also contributed approximately 30.3% of the funding which accounts for approximately 42.4 billion dollars. Healius has improved its overall healthcare quality through adequate finance management. From the half-yearly financial results of the company, it has been observed that the company has successfully enhanced its overall quality care delivery by reducing its total operating cost, proper use of the company's assets and correct interest payments (Openbriefing 2022).

Role And Power Of Healthcare Professionals

Healthcare professionals play a key role in increasing the overall healthcare quality of an organization. The Business model canvas (BMC) helps in providing effective ideas which can be used by healthcare professionals in improving the overall quality of healthcare (Sibalija et al. 2021). Healthcare professionals are required to properly address the needs and requirements of patients. They are also required for improving the recovery progress of patients through effective disease prevention (Yamamoto and Zhi 2019). 

Figure 2: Role of healthcare professionals
The primary role of healthcare professionals is to provide person-centred care, provide adequate lifetime care with dynamic efficiency and improve the overall health outcomes. This helps in reducing healthcare inequalities (Schot et al. 2020). The ideas of BMC would help Healius in providing high-quality healthcare through effective data-driven care, adequate patient care plan, team-based care and implementation of healthcare intelligence (automation). Healius has a wide range of professional healthcare leaders who are working tirelessly to provide quality care to Australian citizens. The pathology department, diagnostic imaging department and day hospitals are effective in providing quality care to the patients (Healius 2022). This has helped in reducing healthcare inequality. According to the sustainability report of Healius of 2020, the company has provided affordable and quality healthcare and pathology service which has helped the citizen of Australia from every socioeconomic background in getting quality service (, 2020). Through this approach the company has successfully reduced the healthcare inequality. The primary duty of healthcare professionals is to effectively provide services that can improve the overall healthcare access and adequate healthcare quality of patients. The healthcare experts of Healius are reliable to meet the exact requirements of every patient by providing accurate healthcare reports (Healius 2022). This helps the company in maintaining its strong capitalism in the market. During the covid-19 pandemic, Healius has increased its number of covid screenings which has helped in improving the company's revenue and also has helped in strengthened the company's position in the healthcare market (Healius 2022).

The vision of Healius is to provide access to healthcare services for all individuals. From the half-yearly results, it can be stated that the organization has aimed to reach the target by the end of the year. BMC implementation would help Healius in improving its performance and sustainability through effective ideation. This includes the creation of a customer-segment network commercial revenue, adequate holistic modernization (such as effective automation and adequate digitalization) of all the laboratories in the pathology department to improvise the nature of healthcare quality etcetera. Healthcare professionals can enhance healthcare quality by improving the patient's clinical experiences during staying in the healthcare organization. BMC implementation would help the healthcare professionals in achieving this.

Healthcare State Model 

According to Moran (1999), the Healthcare state defines the application and implementation of high-quality care and service access to every individual in order to reduce and prevent disease and injury risk. Moran has explained that over the decade numerous amounts had been allocated to improve healthcare quality. However, an effective political significance relies upon the actual service that is received by the individuals and the high amount of resources and funds that are being allocated. This indicates that in modern states most often high-quality healthcare does not signify high-quality welfare in healthcare services. The Healthcare state model is defined as a model which can be used for governing the overall resources, function and performance of a healthcare organization (Barnet J.R. and Brown 2006). The main purpose of this model is to analyse whether the resources and funding of public and government sectors are being utilized properly or not. In the case of Healius, it has been observed that the Australian health sector allocates a huge amount of finance for providing high-quality care and service to individuals. However, it is the duty of healthcare professionals to ensure that all the resources are being used properly and the individuals are getting proper care.

Although the half-yearly results of Healius have shown that the revenue has increased from last year, it does not indicate that the healthcare state has been maintained properly. Moran has stated that in the existing healthcare system the dominance of healthcare policies exceeds the actual healthcare system, and this has reduced the opportunities for providing quality care and support (Victorian Government Department of Human Services, 2009).

Effect Of Healthcare State Model In Shaping The Public And Private Sector Business Model

The primary role of healthcare institutes is to govern whether the healthcare resources are properly utilized to provide high-quality healthcare or not. The governing indicates both the state and the healthcare organization.

Figure 3: Healthcare inequalities
From the above figure, it can be stated that healthcare inequalities exist due to inadequate resource distribution and a lack of proper governing. This has enhanced the rate of chronic diseases among people in low-socioeconomic states. The inadequate distribution of funding has created a major issue in healthcare quality. According to a report by Turaga and Girotra (2020), due to the Covid pandemic, healthcare organizations have been forced to postpone surgery cases which have resulted in an effective backlog of surgery cases.

Healius has aimed to reduce this inequality and provide high-quality care and support to every Australian citizen. BMC and the healthcare state model can be used to reshape the unequal distribution of healthcare resources and achieve what is known as “the moran state of healthcare state” (Osterwalder and Pigneur 2010). The half-yearly report of Healius has shown that the primary issue of unequal resource distribution is the lack of proper planning which has enhanced the resource distribution in one sector while neglecting another. In private healthcare organizations such as Healius, the main business drivers are management of cost efficiency, adequate volume generation by patient attraction by the use of specialists and effective capital investment. However, the pandemic has disbursed the function as the majority focus of small organizations such as Healus has shifted to adequate disease screening and effective business transformation. This also has enhanced the overall country's GDP (Moran 2000).

Figure 3: Change in health expenditure
The main change in the situation can be achieved by enhancing the number of GPs by the 80/20 rule (effective restriction of healthcare professionals from >80 professional attendance on >20 days/year). This would eliminate the risk of not being available for healthcare services and would help in providing high-quality healthcare by increasing the health inflation from the CPI. Moreover, healthcare organizations can also improve their overall healthcare quality by effective redistribution of the overall spending on healthcare (Tuohy 2010).

Figure 4: Redistribution of spending
Figure 4 explains the redistribution of healthcare spending. It has been observed that healthcare organizations should prioritize their focus and should create strategic structures which would restrict them from political spending and would help them in providing quality care for every individual.

Business Model Canvas (BMC)

BMC is an effective tool that helps entrepreneurs and organizational managers in analysing the key areas of improvement which are essential for the improvement of organizational performance. BMC has 9 different stages which can be used in a healthcare organization in order to enhance their revenue and overall healthcare quality (Osterwalder and Pigneur 2010). According to Fredriksson et al. (2017), the use of the BMC model helps organizations in understanding the need for adequate healthcare quality maintenance. Every healthcare organization has aimed to effectively achieve the "Triple aim". This includes proper distribution of funding, effective service delivery and adequate regulation of policies (Fredriksson et al. 2017). Healius can achieve an effective marketing edge through the use of BMC. The business model canvas lends itself well to health care service planning as it incorporates the aiding factors into the business model's conceptualization and subsequent realization.

The overall emphasis of the business model is effectively placed on the overall understanding of the consumer’s value. BMC also helps organizations in understanding the demand of consumers and provides the steps for effective consumer value designing (Sharan et al. 2016). BMC model can be applied to the functioning of Healius by providing proper patient-centred care. This can be done by implementing automation in the diagnostic department and implementation of EHR, e-prescription etcetera in the daycare hospital. Implementation of telemedicine and eHealth also helps in improving the overall healthcare quality (Kimble 2015). Different studies have shown that the creation of patient-centred care facilities creates a specific market standard for different healthcare organizations. (Sibalija et al. 2021). It has been observed that patients most often play an effective role in value determination. Healthcare facilities on the other hand meet these values. The overall management of healthcare depends on acquiring multiple stakeholders' values. However, the implementation of BMC must address the needs and values of each stakeholder which can be used for improving healthcare quality.

Criteria For Success

It can be stated from the above discussions that Healius has successfully provided a high quality healthcare service. However, the organization have effective structural conditions which would help in improving the overall financial success. These are effectively understanding the overall needs of the healthcare community, effective engagement with all the healthcare service providers for implementing new services, understanding the overall capabilities of service providers etcetera (Dafny 2018). Moreover, healthcare organizations are also required to analyze the outcome and implement an effective design that can meet the needs and requirements of patients (Kaiser and Lee 2015). Healius can improve its financial success by generating volume/time and by maximising financial incentives, Fee for service and Practice incentive payments and by generating maximum revenue in time available. Healus can also enhance their financial success by effectively attracting revenue by generating workforce. Effective engagement with stakeholders, healthcare administrations, and healthcare representatives is required for providing an evidenced-based service. 


Therefore, from the above discussions, it can be stated that quality healthcare provides is the primary goal of Australian healthcare service. The federal and state governments of Australia have allocated a huge number of resources for effectively providing quality care. However, it has been observed that inadequate healthcare resource distribution has been observed which can be mitigated by the BMC and healthcare state model. This model helps in governing the total resource distribution and also provides ideas such as the implementation of telemedicine, EHR, and e-healthcare service to enhance the quality of healthcare and reduce the healthcare gaps.

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