Informed debate on health funding is impeded by misunderstandings and misrepresentations of the views and analysis of reformers.
This paper presents the case for a single national health insurer to replace the 38 private insurers now operating in the market. It does not claim private insurance is mis-managed, or that it is exploiting consumers. In fact, private insurance is placed in a difficult situation by government policy which seeks to achieve community rating, to restrain budgetary outlays, and to contain inflationary pressures. Nor is it to argue for a nationalized health care sector. The delivery of health care services is separate from the funding of health care services, and there is no reason why the presence of a single insurer should alter the balance between private and public provision of services. Australia already has such a model administered by the Department of Veterans’ Affairs, which provides health services for 300 000 veterans and their dependants. The Department acts as the single insurer, but most services, including two thirds of hospital services, are provided by the private sector. There would be significant economies and improvements in equity in extending the single insurer model to the delivery of all health programs.
Download More than one health insurer is too many: The case for a single national insurer
Five shortcomings of private insurancethat could be overcome by a single insurer (NB These shortcomings are inevitable when a nation tries to use private insurance to fund health care):
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Ian McAuley is a contributing author to CPD’s recent publication More Than Luck: Ideas Australia needs now. Ian’s chapter Living off our resources looks at how we use our resources in an era where environmental capital is fast-becoming our scarcest resource of all. Ian lectures in Public Sector Finance at the University of Canberra. His research interests are in public policy, with a specialisation in health policy. His academic qualifications are in engineering and business management from Adelaide University and in public administration from Harvard University. Besides his academic work, he has assisted consumer and welfare organizations in financial and economic policy matters. He has been a strong advocate for integration of the components of health care into a coherent consumer-focussed system. He has been a critic of successive governments’ piece-meal approaches to health policy, particularly the government’s subsidies for private health insurance because they bring neither the benefits of market competition nor the benefits of strong government control. Ian is co-author of a number of papers for the Centre for Policy Development, including ‘Reclaiming our Common Wealth: policies for a fair and sustainable future‘, ‘A Health Policy for Australia: reclaiming universal care‘ and ‘You Can See a Lot By Just Looking: Understanding human judgment in financial decision-making‘.