Australia: Call for choice between Medicare or private health cover

October 16, 2008,

Australians should be able to choose either private health cover or Medicare to ensure a more efficient and fair system and help reduce public waiting lists, a health care economist from The Australian National University has proposed.

Dr Francesco Paolucci – a Research Fellow at the Australian Centre for Economic Research on Health (ACERH) at ANU – says the current public/private mix in health care financing leads to duplication, high-transaction costs, and long waiting times in the public health sector.

"Although the policy goals of subsidising private health insurance in Australia are, among others, to decrease the pressure on the public system, increase choice and affordability of health coverage to Australians – the current arrangements have led to some perverse incentives and undesirable effects" Dr Paolucci said.

"Giving consumers a choice between Medicare and private health insurance (PHI), combined with a system of risk-adjusted subsidies, would improve incentives for efficiency and increase stability in the PHI market."

Dr Paolucci says Australia should explore introducing consumers' choice of health plan and leave Medicare and the private insurers to compete with each other to be a 'prudent buyer of care'.

"The crucial element of this approach is that it removes duplication of coverage by allowing individuals to choose to be enrolled in one plan or the other. Private health insurers would have to cover all types of services and pay all health care expenses, which is not the case now.

"An essential component of the 'Medicare/PHI choice' would be that as compensation for covering all health care costs, PHI holders or funds receive a risk-adjusted subsidy. In the long run, both PHI and Medicare might receive the same risk-adjusted subsidy from the Government who collects the funds, and manages the risk equalisation fund."

Source: Research Australia

Explore further: Obesity drives US health care costs up by 29 percent, varies by state

Related Stories

Obesity drives US health care costs up by 29 percent, varies by state

February 7, 2018
The prevalence of obesity has risen dramatically in the U.S., but there has been little information about the economic impact of this trend for individual states.

Not all genetic tests should be publicly funded — here's why

February 1, 2018
New genetic technologies hold great promise in their potential to treat patients based on their individual genetic information. Advances in mapping the human genome mean the cost of doing a genetic test has fallen dramatically, ...

Drug discount program aimed at improving care for low-income patients generated gains for hospitals

January 25, 2018
A 25-year-old drug discount program aimed at boosting resources for hospitals treating low-income patients did not deliver on its promise to enhance care for the needy, according to research from Harvard Medical School and ...

Deceleration in health care spending growth in 2016

December 12, 2017
(HealthDay)—Health care spending growth slowed in 2016 following faster growth in 2014 and 2015, according to research published online Dec. 6 in Health Affairs.

Making insurers participate in marketplace could cut volatility

December 15, 2017
(HealthDay)—Requiring insurers that participate in Medicare or Medicaid to also participate in Marketplaces in the same geographic area could improve access to insurance, according to a study published in the December issue ...

A Medicaid challenge: Poor health, but a drive to improve

December 7, 2017
It's one of Medicaid's challenges.

Recommended for you

Smartphones are bad for some teens, not all

February 21, 2018
Is the next generation better or worse off because of smartphones? The answer is complex and research shows it largely depends on their lives offline.

Tackling health problems in the young is crucial for their children's future

February 21, 2018
A child's growth and development is affected by the health and lifestyles of their parents before pregnancy - even going back to adolescence - according to a new study by researchers at the Murdoch Children's Research Institute, ...

Lead and other toxic metals found in e-cigarette 'vapors': study

February 21, 2018
Significant amounts of toxic metals, including lead, leak from some e-cigarette heating coils and are present in the aerosols inhaled by users, according to a study from scientists at Johns Hopkins Bloomberg School of Public ...

Why teens need up to 10 hours' sleep

February 21, 2018
Technology, other distractions and staying up late make is difficult, but researchers say teenagers need to make time for 8-10 hours of sleep a night to optimise their performance and maintain good health and wellbeing.

Electronic health records don't reduce administrative costs

February 21, 2018
The federal government thought that adopting certified electronic health record systems (EHR) would reduce administrative costs for physicians in a variety of specialties. However, a major new study conducted by researchers ...

Low-fat or low-carb? It's a draw, study finds

February 20, 2018
New evidence from a study at the Stanford University School of Medicine might dismay those who have chosen sides in the low-fat versus low-carb diet debate.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.