Both Canada and Australia have universal health-care systems. However, mental health care is not fully covered in either.
Sources describe access to mental health care in both countries as highly fragmented and underfunded.
“There are very, very significant gaps,” said Mark Cormack, a professor and health‑system policy expert at the Australian National University.
“Most people that you would speak to in Australia would not be completely satisfied with the level of coverage [and] the level of accessibility.”
Over a series of articles, Canadian Affairs has been exploring what Canada can learn from Australia, which consistently places at or near the top of the Commonwealth Fund’s ranking of high-income health systems.
Mental health, however, is not a central focus of the fund’s analysis. And sources say Canada and Australia have both failed to make mental health a central part of their own health systems.
“Australia still has probably one of the best health systems in the world,” said Sebastian Rosenberg, a mental health policy expert at the University of Canberra.
“But that assessment ignores mental health.”
In this fifth installment, we examine why mental health care remains fragmented in both countries — and what lessons can be drawn from European countries that mandate residents to purchase insurance that covers mental health.
Patchwork systems
Health-care systems in Australia and Canada share a similar structure.
National governments provide some funding for mental health. But provincial or state governments fund and deliver most mental health-care services. These include inpatient psychiatric units, crisis services and community mental health teams.
Alongside their public systems, the private sector also plays a major role. Many people access counseling and other mental health services through private insurance or out-of-pocket payments.
“It is a bit of a patchwork,” said Cormack, who has represented Australia at the OECD and World Health Organization.
Funding levels are similar too. Both countries spend about seven to eight per cent of total public health-care budgets on mental health.
Experts say that is not enough given the scale of the problem.
In Canada, about 10 per cent of people are diagnosed each year with a mood, anxiety or substance use disorder; in Australia, it is more than 20 per cent.
“[Governments] are not moving nearly fast enough in terms of expanding access to mental health providers, including psychologists,” the Canadian Psychological Association, a professional association, told Canadian Affairs in an email.
The association recommends provinces allocate 12 per cent of their total health budgets to mental health care, their statement added.
Rosenberg, at the University of Canberra, makes a similar point, noting that mental health and substance use account for a much larger share of overall disease burden than current spending reflects.
“The burden of disease, represented by mental health and drug and alcohol, is 15 per cent,” said Rosenberg, who was formerly a senior official in Australia’s federal and state health departments.
This patchwork in mental health care resembles Canada’s approach to drug coverage: an incomplete mix of public and private funders leads to gaps in access and care.
Why reform fails
Australia introduced major reforms to its health-care system in the 1990s. But mental health care was treated as a peripheral issue.
“[Mental health care reform] kind of ran parallel with, but was not really a key part of the … universal health-care reforms,” said Cormack.
Australian health economist Andrew Wilson says a core problem is that Australia never clearly defined the role of public and private providers, leaving the system to “grow in a topsy turvy sort of way.”
This has left Australia, like Canada, with a system that primarily responds to crises, rather than prioritizing prevention or early intervention.
“If you are floridly unwell, then you might stand a chance of being admitted [to a psychiatric hospital],” said Rosenberg.
“There’s a large group of people we would call the ‘missing middle’ … and that group of people are largely uncared for.”
The result, he says, is “a jarring juxtaposition of universal insurance with inequity.”
Both Australia and Canada have introduced successive mental health plans aimed at improving coordination between funders and providers. But Rosenberg says they have not changed the underlying dynamics.
“A particular MP kicks up a big fuss, or three young people die by suicide … and it’ll cause a kerfuffle,” said Rosenberg.
“We will address the kerfuffle by plonking a service or a band-aid. But not only will it not address the underlying need for systemic planning, it will likely perpetuate fragmentation.”
The Bismarck system
When reflecting on what Australia might have done differently, Cormack says some European countries offer a better model.
“More of a social insurance model, like many of the Euro nations do, would probably be a better alternative than our mixed public and private system,” he said.
Countries including Germany, France and the Netherlands have health systems built on the Bismarck social insurance model. This model is named after the 19th-century German chancellor Otto von Bismarck, who introduced one of the world’s first health insurance systems.
Under this model, workers and employers contribute to regulated insurance funds through payroll deductions, while governments cover retirees, students and the unemployed. For workers, insurance is mandatory and must cover mental health care.
States define the benefits package and regulate insurance prices.
These systems see substantially higher spending on mental health care. France spends about 15 per cent of all health spending on mental health care; Germany and the Netherlands each spend about 11 per cent.
Private health insurance is also an important part of Australia’s health-care system, Canadian Affairs previously reported. But in Australia, insurance is optional and supplementary. It mainly covers private hospital care, faster access to elective treatment and “extras” such as dental, vision and physiotherapy.
By contrast, in the European systems, insurance is mandatory and is the central financing mechanism for most medically necessary care, including mental health.
Australia’s insurance model leaves gaps in coverage, Rosenberg says, which pushes people into an under-resourced public system.
“We only have a small number of beds [for mental health care], so the bar to get access to hospital based care is very high,” he said. “You have to be extremely unwell — at risk to yourself or others.”
Wilson, of the University of Sydney, says mixed public and private systems can work, but only with careful design.
“You have to think about what are the incentives in the system … [and] the funding model that you use, because that will drive what actually happens within that system.”
For Rosenberg, the gaps in Australia’s mental health-care system also expose a blind spot in international health system rankings.
“[The] statement about [Australia having] one of the best health systems in the world, and indeed, the tables that come out and support that sort of thing from organizations like the Commonwealth Fund, don’t take mental health into account properly,” he said.
“That’s a real problem.”
