Private health system in a 'death spiral', says expert, but what can be done to save it?

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Private health system in a 'death spiral', says expert, but what can be done to save it?
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Private health system in a 'death spiral', says expert, but what can be done to save it? | pwhatch Dana_Adele

Health minister Greg Hunt says he's determined to keep funds' premiums increases to 3 per cent this year.But he has also backed one of the health funds' core ideas to bring down their hospital spending, by allowing them towhere costs are lower. The first stage of Hunt's policy - for mental health and orthopaedics - will launch by mid-2020 to allow funds to factor the changes into their 2021 premium rises.

Leanne Wells, chief executive of Consumers Health Forum of Australia, which advocates on behalf of patients and customers, also backs a Productivity Commission inquiry to examine how to ensure health insurance provides "value for consumers who use insurance and for the taxpayers who subsidise it”. According to the Grattan Institute's Duckett, the $6 billion a year spent subsiding the private sector through the insurance rebate is only money well spent if private hospitals are being run more efficiently than public hospitals and, on his analysis, they aren't.

“The whole industry needs to be looking at how we can make it more efficient. But the reality is, in this country as in every other country around the world ... health care costs rise at a faster rate," he says. “If Australia wants to start to rationalise services - not provide some services that the community expects - sure, that’s a way we can save costs in the system, but I don’t think the population will find that acceptable.

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