Achieving affordable healthcare through sensible policy change

| August 8, 2019

The cooperative approach demonstrated by participants in the Australia’s Health 2040 report augurs well for the future of Australia’s mixed public private health system.

While stakeholders won’t agree on everything, we do know what the main issues are and what needs to be done. This process confirmed that.

We have already made significant progress with the private health insurance (PHI) reforms, and are working with the government to ensure our health system continues to deliver high quality, accessible and affordable care for all Australians.

Health care stakeholders understand that we need to reduce costs and waste in the system to put downward pressure on premiums. Health funds are committed to improving affordability for their members and we will work with government and other stakeholders during this next wave of reforms to achieve this goal.

Financial incentives for PHI participation will continue to reduce the public share of healthcare costs and these incentives must be sustained.

PHA economic research has clearly demonstrated that once means testing was introduced, the PHI rebate is a highly efficient way of funding non-emergency surgery, in-hospital mental health care and dental care. The government has committed to restoring the PHI rebate for low and middle-income earners when the budget permits.

Maintaining the balance between our private and public systems is vital. Without further reforms to address rising healthcare costs, people will be forced into the public system. This will result in longer hospital waiting times, and a shortage of beds for the people who need them most.

The healthcare sector has already demonstrated that by working together we can influence affordability through sensible policy change. The government’s PHI reforms introduced in 2018 meant this year’s premium increase of 3.25% was much lower than it would otherwise have been and the lowest recorded for almost two decades.

I am confident that with sensible stakeholder engagement and cooperation between health funds, medical professionals, hospitals and consumers groups we can repeat this successful collaborative effort.

Subscribers to the Australian Financial Review and the Australian can read more about the report in this interview with Martin Bowles and this overview of the issues presented.   

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