Health Reform News

Private Health: Who Benefits?

Private healthcare – who benefits? That was the topic for debate by three of Australia’s health policy experts at the National Press Club on Wednesday. An audience of those that matter in health were treated to an animated session where all speakers recognised the need for reform, however fundamentally disagreed on the best way forward.

In quoting the statistic that, currently 60% of surgeries that are performed in private hospitals, AMA President, Tony Bartone, emphatically answered the question as to whether a private component to the healthcare system is needed. Even with this level of activity, public hospitals are ‘fighting a losing battle when it comes to waiting lists and resources’.

Dr Stephen Duckett, Director Health Program, Grattan Institute, offered three policy options for the Government to (1) directly support private health care, (2) support via private health insurance (PHI) or (3) do not support at all (the ostrich approach).

During the panel session, Dr Rachel David, Chief Executive Officer of Private Healthcare Australia, contended that if Government incentives to join a health care fund were removed, the savings would ultimately be spent in servicing the increasing demand on the public health system. Dr Duckett has modelled behaviour associated with PHI and has found that if the, now means tested, 30% premium rebate was removed, the over 65 year old cohort would continue to buy coverage, as they get value. This was echoed by Dr Bartone who noted that while young people are dropping out of PHI; older Australians are commencing cover despite the Life Time Health Cover loading as they are claiming above the average.

Despite the incongruence of taxpayer funded support for businesses that operate to make a profit, Dr Bartone felt that health funds should return more revenue to members. “There must be a minimum amount returned to the health consumer for every dollar going in,” he said. 

The perverse impact of Government attempts to control costs by means testing and freezing rebates, resulting in higher out-of-pocket charges being borne by patients, was not lost on the speakers.

Although Bartone insisted that increased transparency of costs and fees will help promote efficiency and build confidence in the healthcare system, despite being inundated with information and data, the differing viewpoints lead to the conclusion that health is contestable. Health numbers matters.

Interestingly, the raft of changes to simplify PHI announced by Minister Hunt in 2017, were not touched upon. Funds have until April 2020 to introduce the reforms including coverage by tiers (Gold, Silver, Bronze or Basic).

PHI challenges are multifactorial, and as such we need all stakeholders to contribute to efforts to find solutions. Even if we have a good, not perfect healthcare system, reform is necessary and we shouldn’t be afraid of pursuing it.

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