More than one health insurer is too many: the case for a single insurer | DISCUSSION PAPER

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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):

  1. High administrative costs
  2. An inability to contain service providers’ costs.
  3. An inability and a disincentive to provide public goods.
  4. Difficulties in achieving equity (“community rating”).
  5. Fragmentation of health services delivery.

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