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Prices and subsidies for Australian psychiatric services: A positive economic analysis

D.P. Doessel (Queensland Centre for Schizophrenia Research, The Park Centre for Mental Health, Wacol, Queensland, Australia)
Ruth F.G. Williams (School of Applied Economics, Victoria University of Technology, Melbourne, Victoria, Australia)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 1 May 2004



The production of specialist psychiatric services in Australia reflects the “mixed” system of public and private production of health services generally. This paper, an exercise in descriptive or positive economics, is concerned only with private production, i.e. those services provided by psychiatrists operating in “private practice” on a fee‐for‐service basis. It is shown that there is a sharp distinction in Australian institutional arrangements between psychiatric services produced in‐hospital and out‐of‐hospital. The main differences relate to the general coinsurance rates applied, 75 per cent in the former case and 85 per cent in the latter case. In addition out‐of‐hospital services are subject to a “gap” safety‐net provision. Using both algebraic and geometric expositions, the central relationships between gross prices, net prices, schedule fees and subsidies/rebates are illustrated in general, and in various special cases, e.g. where a psychiatrist “direct bills” or “bulk bills” the Health Insurance Commission.



Doessel, D.P. and Williams, R.F.G. (2004), "Prices and subsidies for Australian psychiatric services: A positive economic analysis", International Journal of Social Economics, Vol. 31 No. 5/6, pp. 544-560.



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Copyright © 2004, Emerald Group Publishing Limited

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