Does Government subsidy for costs of medical and pharmaceutical services result in higher service utilization by older widowed women in Australia?

In Australia, an in-situ experiment in older women’s use of medical services and pharmaceuticals can inform health service policy on the effectiveness of alternative models of health funding. Different models of health service funding and charging are applied for medical services and pharmaceuticals under Australia’s universal health care system (‘Medicare’), and the special health care coverage provided to Australia’s war veterans and their widows.

Medicare ensures eligible Australian residents have access to free treatment as a public patient in public hospitals, free or low cost out-of-hospital medical and optometric care and subsidized access to pharmaceuticals. Residents may choose to pay for private insurance for hospital and other health services not covered by Medicare (e.g., allied health). For each out-of-hospital visit to a general (family) practitioner (GP) (equivalent to U.S. primary care physician) or medical specialist, Medicare pays 85 to 100 % of the Medicare Benefits Schedule (MBS) fee, depending on the consultation type (MBS fees are set annually by Government), potentially leaving a ‘gap’ payable by the patient. Many practitioners charge more than the schedule fee; the difference between the Medicare benefit and the practitioner’s actual charge is the patient’s eventual out-of-pocket cost. The basic architecture of the Medicare system is shown in Table 1 and while a minority of Australian residents incurs some cost for health care, there are levels of protection safeguarding individuals with excessive health care needs against paying too much.

The Australian Government also subsidizes the costs of many prescription medicines for residents through the Pharmaceutical Benefits Scheme (PBS), also illustrated in Table 1. Individuals pay a maximum co-payment per script for prescription medications listed on the PBS, regardless of their actual cost. The level of co-payment is lower for concession card holders such as pensioners. There is also a PBS Safety Net to protect individuals who require numerous medicines.

Separately, the Australian Government funds the Department of Veterans’ Affairs (DVA), to provide benefits and services to eligible veterans and their dependants for injury, disease or death related to Australian Defence Force service (similar to the U.S. Civilian Health and Medical Program of the Department of Veterans’ Affairs (CHAMPVA)). War widows are entitled to a war widow’s pension and gold repatriation health card (Gold Card) from the DVA if their husband’s death was due to war service or other eligible defence service. With a Gold Card, war widows are always bulk billed (meaning that they pay nothing personally) and the benefit paid is higher. War widows are also entitled to receive from DVA more health services than Medicare covers for other Australians, for example all allied health services and private hospital costs. War widows with DVA Gold Cards are entitled to all medicines listed on the PBS and the Repatriation Pharmaceutical Benefits Scheme (RPBS) at the concessional co-payment rate. The RPBS includes some additional pharmaceuticals specifically for the veteran population. Thus, war widows are a unique group of Australian women. Regardless of their own health needs, once their spouse dies they receive their own Gold Card if they are eligible, which entitles them to a wider range of free medical and other health care (including treatment in private and public hospitals) and a larger range of pharmaceuticals at the concessional rate than other similarly aged Australian women.

Research has shown that abolishing or reducing the costs of health care leads to higher usage of health services [1]. As financial disincentives for using health care services are largely abolished for war widows, it might be expected that they would also make higher use of these services, particularly as widows often have poorer health, higher mortality and higher use of health services compared to partnered women [2, 3]. Little research has examined this issue.

For this paper, we hypothesized that war widows with Gold Cards would use more medical services and pharmaceuticals than widows without a connection to DVA. To test this, we analysed data from a large community-based cohort study of older Australian women.

The fourth ALSWH survey was completed by 7158 women. Of these, 1534 (21.4 %) were married at Survey 1 and widowed by Survey 4. Of these, 999 (65 %) consented to Medicare linkage. The final sample was the 730 women for whom their relationship with DVA could be correctly ascertained and who were Australian-born. Of these 730 women, 407 (56 %) had no connection to DVA and 323 (44 %) were DVA Gold Card holders. Table 3 shows selected demographic characteristics of the 730 women. The groups differed statistically on ability to manage on available income. The strongest contributor to this result was that longer-term widows without a connection to DVA were more likely to report having difficulty managing on their income. The groups did not differ statistically on age or self-rated health.

We hypothesised that war widows with Gold Cards would use more medical services and pharmaceuticals than women without a connection to DVA, thereby costing the Australian Government more. This hypothesis was based on the premise that the removal of financial disincentives would lead to higher use of services. This hypothesis was not substantiated. DVA support reduced the out-of-pocket costs for medical services. However despite having access to gap free treatment, Gold Card holders neither incurred higher total costs, nor made more claims for medical services or visits to GPs. Indeed, between 5–10 % of war widows in this study did pay a gap. These findings suggest they are not making increased use of almost free medical treatment. In an analysis of GP visits by people aged over 70 years before and after free GP services were introduced, Layte et al [9] found no significant increases in number of GP visits. He suggested that the impact of other factors such as personal mobility, transport and information may be more important than costs in determining frequency of GP visits. In an analysis of factors determining use of GPs in Australia, Zhang and colleagues further identified issues such as social support, perceptions about the value of good health and attitudes about health care as being important [10].

Having a Gold Card did appear to influence use of pharmaceuticals by war widows in a limited way. These Gold Card holders, in particular longer-term widows, presented more PBS(RPBS) scripts than women who were not Gold Card holders but the total costs of their pharmaceuticals and total number of claims were similar. Possible explanations for this finding include: Gold Card holders made more visits to a GP – which we have discounted; GPs wrote more scripts per visit; and/or lower cost pharmaceuticals were prescribed. Our data did not allow us to analyse whether GPs wrote more scripts for the DVA Gold Card holders than women with no connection to DVA. However, in a survey of GP consultations (2000–2003), Britt et al [11] found that longer consultations were more likely for patients with a DVA Gold Card, and those who were older and female, but that the consultations resulted in fewer medications being prescribed and used. This practice by GPs could also reflect the influence of the DVA Prescriber Intervention and Feedback program (PFP) from 1993–2003, and/or its successor, the Veterans’ Medicines Advice and Therapeutics Education Service (Veterans’ MATES) programs. These programs assist GPs and veterans manage medicines in order to prevent medication-related problems such as adverse effects or drug interactions [12].

Another possible explanation for why these DVA Gold Card holders had more scripts but not higher total costs for pharmaceuticals is that they do not fill all prescription repeats, possibly indicating non-adherence. Hynd et al [13] reported significantly less dispensing of PBS prescriptions following the introduction of the co-payment price increase in 2005, the same year our data were collected. They found that pharmaceutical dispensing was 2 %-9 % less for people with ‘social security cards’ (including age concession cards) than for the general population. This change to the system, which would have also impacted on Gold Card holders, might partially explain our finding.

Few other studies have looked at similar issues. The most relevant is an Australian Institute of Health and Welfare [AIHW] report [14] which analyzed Australian medical and pharmaceutical usage by veterans and war widow(er)s who were Gold Card holders from 1997–2000 and showed that female Gold Card holders aged 70–84 years (mostly World War II widows) had an 11 % higher use of local medical officer/GP services than the rest of the Australian community, matched for age. Additionally, in 1999–2000 female DVA Gold Card holders aged 70–89 years had 4 %-8 % lower use of pharmaceuticals than similarly aged women in the Australian community. The authors raised the possibility of under-reporting of PBS claims if Gold Card holders did not use their Gold Cards or used other non-DVA concession cards when presenting scripts. We can discount under-reporting as our complete linkage to Medicare data enabled us to cross check the women’s DVA status and concession card status for all claims. The AIHW report found the cost per script to be 16 % lower for female Gold Card holders aged 70–79 years, and, like us, could not explain this apart from hypothesising that DVA Gold Card holders are prescribed less expensive drugs. However, comparisons with our study are not straightforward as the AIHW study did not separate widows and married women, restricted the MBS data to local medical officer and GP (out-of-hospital) services, and used pharmaceutical use data estimated from multiple sources because PBS(RPBS) data were incomplete at that time [14].

In Australia, like the United States, the government shows its appreciation of the service and sacrifice of its war veterans and their spouses and dependents by providing significant ongoing support for their health care needs. This support is significant both in terms of cost and extent. In December 2011, there were an estimated 83,562 war widows of World War II veterans in Australia, and a further 77,400 World War II veterans receiving income support [18], many of whom will be outlived by their wives. Our results suggest older war widows are not using more medical services and pharmaceuticals than other older Australian women despite having financial incentives to do so. The main implication is that the current funding model is providing an equitable amount and type of support and access to health services to war widows compared to others. Given the strengths of the ALSWH, these findings can be viewed as being broadly representative of war widows in Australia. The extent to which such behaviour might be displayed by other demographic groups is unknown. Generalizations to other countries are more tenuous but the implications for the United States or the United Kingdom for example, are that spouses of older veterans do not necessarily exploit free services.

However, whether these results apply to policies for future funding models is uncertain. In Australia there is potentially an upcoming demographic of war widows of the estimated more than 47,100 men now aged 55 years and older who fought in the Vietnam War and who receive income support [18]. This cohort of women may well have a different sense of entitlement and attitudes to health service access and use than that displayed by the older generation of war widows.