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Is Australia Moving Towards a US-Style Health Care System?

Sally Aquire July 31st, 2014 0 comments

Health experts have warned that the Australian government’s private plans to shake up health care could have a devastating impact on the Medicare system. According to anonymous senior health sector professionals, the Health Minister is secretly keen to allow private health funds to cover GP visits. This has led to fears that it is the first step towards the introduction of a US-style health care system that will lead to inferior care for public patients.

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Why Is There Concern?

Greater involvement by private health funds in primary health care is already being trialled by some Medibank Private and Bupa health fund members in Victoria and Queensland, with Medibank Private members receiving guaranteed access to GPs within 24 hours and the option of after-hours home visits.

Health insurance Australia

Image by Olga Lednichenko

In the Queensland trials, Medibank has effectively been taking advantage of a legal loophole. Rather than illegally subsidising fees for GP services, they are avoiding a breach of the Private Health Insurance Act by contributing to “administrative” clinic costs. Mr Dutton has hinted that this would enable existing legislation to be unchanged, while the Health Department were less certain. They have inferred that Medibank “appeared” to be complying with legislation.

The Australian Medical Association (AMA) has has expressed concerns that encouraging health funds to be involved in GP services could lead to a two-tier health care system (as is currently in existence in the United States) with superior care for private patients if it is rolled out across Australia. “If people go too far or the role of private health insurers is unchecked, it could have very significant consequences and produce greater inequality,” warns AMA President, Professor Brian Owler. As part of the current system, everyone receives the same level of care from their doctor – regardless of whether they are a public or private patient.


The Australian Medical Association is not completely adverse to the idea of private health funds having greater involvement in primary care but Professor Owler has urged the government to be cautious in their approach towards doing this. “We have a good health care system in Australia and the US model is not one we should be trying to emulate,” Owler has stressed.

Andrew Wilson, Medibank Executive General Manager of Provider Networks and Integrated Care, has strongly denied that Medibank health fund members are being prioritised over other patients. “The pilot is not about displacing other patients or creating a two-tier system,” he insisted.

The move could also allow more GPs to charge higher fees, suggests Stephen Duckett, health program director at the Grattan Institute. This would mean that consumers and taxpayers would ultimately pay more for health care.

Shadow Health Minister, Catherine King, has suggested that the government’s plans are an attempt to “dismantle” the Medicare system. “The Abbot Government has already approved the biggest increases to private health insurance premiums in almost a decade, and now they want Australians to pay even more,” she said. This accusation has been strongly refuted by the Australian government, who have reiterated their continued support for Medicare and insisted that there are definitely no plans to introduce a US-style health care system.

In defence of the trial, Mr Dutton has insisted that it is designed to allow health care providers to spend more money on keeping individuals healthy so that less money is spent on hospital treatments, and that there is no intention to provide superior levels of care for health fund members compared to public patients.

A decision will not be made imminently, with the current trial being used to influence a verdict as to whether health funds will ultimately be able to cover GP services. “The Minister has made it clear that he wants to see the outcome of the trials before considering what, if any, role private health insurers can play in primary care,” a spokesman for Mr Dutton confirmed.

However, senior sources have told The Sun Herald that Mr Dutton is actually laying the foundations for a system shake-up, despite the assurances that the Australian government strongly supports Medicare.

If the proposed plans for private health insurers to have greater involvement in general practice go ahead, experts are concerned that it will pave the way for a two-tier health care system in which private patients receive superior care from GPs. The initiative is currently being trialled by health fund members in some areas of Australia, with experts fearing that a nationwide implementation would open the door to higher fees for GP services and a two-class system of patients that would undermine the Medicare system.

Health Minister, Peter Dutton, has insisted that the Australian government continues to have a strong commitment to Medicare and that there are no plans to introduce a US-style health care system, while a spokesman admits that much will depend on the outcome of the current trial.

Disclaimer: The above information is correct and current at the time of publication.

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