Medibank submission to the Australian Labor Party's Discussion Paper on the proposed Productivity Commission inquiry into the Private Health Sector
Medibank’s response to the Australian Labor Party’s Discussion Paper on the proposed Productivity Commission inquiry into the Private Health Sector
All of us want a health system that is more affordable, easier to use, and creates greater customer value. We are working hard within our business to achieve this, but it cannot be solved by private health insurers alone.
The Australian Labor Party is exploring the possibility of a Productivity Commission inquiry into the private health sector and we welcome the opportunity to contribute to this.
Health costs have risen by more than double the rate of inflation over the past decade, with hospital cost inflation and total health expenditure both increasing by around three times the rate of inflation.
Dealing with this in a significant and sustainable way requires reform to the system.
We believe it’s imperative that a Productivity Commission review results in meaningful and wide-ranging reforms that address the cost drivers in the healthcare system.
We have something really special which we need to future proof – our mixed public and private health system which delivers world-leading outcomes for Australians.
All Australians benefit from private health insurance as it takes pressure off the public health system, provides greater consumer choice, and reduces costs for taxpayers.
But healthcare costs are rising well above inflation and are the fundamental reason why private health insurance premiums keep increasing. Some of the reasons for this are unavoidable, such as population growth, increased life expectancy, and improvements in technology and treatment methods. However, inefficiencies in the health system, including poor information transparency and well-intended regulations are resulting in higher costs and poorer outcomes for consumers; as is low-value care, with the Productivity Commission estimating that 10% of healthcare spending either has no effect, causes harm or it is not worth its cost.
Addressing out-of-pocket costs for consumers, promoting greater cost and quality transparency for patients, tackling higher than necessary prostheses prices, and pursuing alternative models of care (particularly for chronic disease) are readily achievable reforms that will make the private health system more sustainable.
We firmly believe that if we all work better together – insurers, hospitals, providers and government – we can shift the cost issue and ensure a sustainable healthcare system for all Australians in the future.