Sustainable Funding for Australia’s Future Health Care

Like many other countries, Australia is facing significantly increased costs in the future in maintaining the health of its people.  In coming decades we will have more people suffering from chronic and debilitating health conditions such as diabetes, a higher proportion of older people with complex health care needs and burgeoning costs from new diagnostic and treatment technologies including pharmaceuticals. Another motivation for concern with current health financing arrangements is duplication in health insurance coverage.  Duplication arises because the Medicare coverage for public hospital services cannot be used for private hospital services.  Those who purchase private health insurance therefore have to pay a premium that covers the full cost of private hospital services and not just the additional cost of those services.  A large part of private health insurance coverage is therefore duplicate coverage while only a small part is supplementary coverage. Australia already spends around ten percent of its GDP on health care and some estimates show this increasing to over fifteen per cent by 2020 – an additional $50 billion each year. How will we pay for this? Are there better ways of financing and providing health care? This seminar discussed financing options based on Australian and international research undertaken through the Australian Centre for Economic Research on Health (ACERH) at ANU. The Speakers were Professor Jim Butler, Director ACERH; Dr Francesco Paolucci, research fellow ACERH; and Henry Ergas, Chairman, Concept Economics.