How does Medicare decide which services to subsidise?

• A. Subsidises all services equally
• B. Prioritises the most necessary services for greatest health gains
• C. Subsidises only medicines
• D. Provides subsidies randomly

Answer: (B)

Medicare prioritises funding for services that deliver the greatest health benefits to the community with the resources available. The idea is to use evidence on how much a service improves health and how cost-effective it is, so the subsidies go to those interventions that are most necessary and achieve the most meaningful health gains. This approach helps reduce health inequities by focusing on high-value care that benefits the largest number of people, especially those in greater need.

In practice, decisions about what to subsidise are based on evaluating clinical effectiveness and value for money, then adding those services to the schedule that determines rebates. This is not about subsidising everything equally, nor about subsidising only medicines, and it isn’t done randomly.