An Unhealthy Conflict: Private Interests and the Public Purse

The growth of private health insurance in Australia has been at substantial cost to the taxpayer and the current situation is not sustainable according to the contribution of Australian researchers to a new international survey of the ideologies and inefficiencies that have shaped health care reform.

Professor Jane Hall and Associate Professor Elizabeth Savage have contributed a chapter on the role of the private sector in Australia to the book The Public-Private Mix for Health, released recently in the UK.

In the article Hall and Savage argue that the public-private mix in Australian health care is more complicated than most comparable countries, and made more so by the recent Howard Government strategy on private health insurance.

The authors say that this complexity has resulted in substantial opportunities for cost shifting and barriers to coordination.

"The private health insurance incentives have proved to be expensive, and indeed have increased the Commonwealth Government's share of total health care expenditure. The impact has been regressive, with proportionately more of the benefits accruing to higher income groups.

"The conflict between private interests and the public purse is now being seen in the pharmaceutical benefits scheme and in general practice."

The Public-Private Mix for Health, edited by Professor Alan Maynard of the University of York, has brought together leading international experts on the funding and provision of health care to consider the limited success of government reforms during the past 20 years.

Professor Maynard said health care systems around the world were wrestling with common problems by adopting, abandoning and reintroducing discarded and unproven policies.

"Fundamental issues in public policy are ignored to garner votes by reform wheezes and patients' care is hazarded by avoidable deficiencies in health care delivery," he said.

"The recycling of failed policies worldwide, in private and in public institutions, does not control expenditure inflation, does not ensure value for money for the payers of insurance premiums or taxpayers, and does not deliver care equitably to different social groups."

The book examines the reform frenzy in health care markets worldwide and the similarities faced in policy challenges.

Alan Maynard, Alan Williams, Cam Donaldson, Karen Gerard, Craig Mitton, and Rudolf Klein separately discuss various aspects of policy in the UK; Uwe Reinhardt writes on USA policies; Bob Evans and Marco Vujicic on Canada; Nicholas Mays and Nancy Devlin on New Zealand; Kjeld Møller Pedersen on Scandinavia; Martin Pfaff and Axel Olaf Kern on Germany; and Lise Rochaix and Laurence Hartmann on France.