Competitive Health Markets and Risk Equalisation in Australia: Lessons Learnt from Other Countries

Preconditions for efficiency and affordability in mixed health systems: are they fulfilled in the Australian public-private mix?

The Australian health system is characterised by high quality care by international standards, produced by a mix of public and private provision and funding of healthcare services. Despite good overall results, three issues are of concern. The first issue relates to the public procurement of healthcare, whose flaws have impacted individuals' access to care, and the high out-of-pocket spending. The second issue concerns the sustainability of the private health insurance market, given the government's goal of relieving cost and capacity from the public scheme, incentivising participation. Third, there are existing inefficiencies and inequities related to the duplication resulting from the interaction between public and private schemes. To ensure a sustainable, efficient and equitable health system, structural reforms are necessary to achieve long-term performance improvements. Using a framework for mixed public-private health systems, we assess the extent to which the Australian healthcare system achieves preconditions for efficiency and affordability in competitive healthcare markets.