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The Australian health system is a balance between the public and private sectors.

The private hospital sector now performs 40 per cent of all admissions and 65 per cent of elective surgery in Australia. It is a key part of Medicare and the public hospital system could not survive without it.

Previous Governments have supported private health insurance participation through measures such as Lifetime Health Cover, the Medicare levy surcharge, and the private health insurance rebates.

Most out-of-hospital medical services are provided by private medical practitioners and Medicare rebates assist patients with the cost of these services. Over time, failure to properly index Medicare rebates has meant that they have not kept pace with the cost of providing medical care in the community, and this has led to increasing out-of-pocket costs for patients.

Instead of increasing Medicare rebates, the Extended Medicare Safety Net (EMSN) was introduced to assist patients with high out-of-pocket costs for medical services provided out of hospital. The EMSN structure helps share these costs between patients and the Government. In 2009, the Government shifted more of the burden of these costs onto patients by introducing a cap on the total EMSN benefits paid for some medical services.

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Patients want the choice of affordable access to private hospital services, especially for elective surgery. They want a strong viable private sector so that the public hospital sector can be there for those who really need it.

Under Medicare, the Government subsidises medical services to ensure they remain affordable for patients.

Government subsidies for private health premiums and the EMSN alleviate the financial pressure faced by many Australians in accessing private hospital treatment and private medical services in the community.

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The private hospital system is now the dominant provider of elective surgery. Private health insurance also provides financial support for various preventative health services.

It is a good investment for the Federal Government to support private health insurance because high membership maintains the balance of the hospital sector. High private health insurance membership brings private dollars into the health system and, in turn, means that the Government funding required is less than it would otherwise be.

Similarly, access to private out-of-hospital medical services in the community must remain affordable so that patients can seek early medical attention. Delayed diagnosis and treatment, as well as being detrimental to patients’ health, will simply add to the cost of other parts of the health system. Further, there must be Government programs that provide access to clinically appropriate dental services, giving priority to people who are financially disadvantaged.

There is a good argument that the Government should increase the Medicare rebates for patients. But, in the absence of this, an ongoing commitment to retain the EMSN is the next best alternative.

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Support for private health insurance

The next Government must ensure that there are effective measures to encourage private health insurance participation and ensure that membership remains at levels whereby there is no shift of the burden from the private to the public hospital sector.

Medicare Safety Net

The next Government must also commit to retain the current EMSN with appropriate indexation of the safety net benefits payable.

* For a full pdf version of the Key Health Issues for the 2010 Federal Election click here