1 February 2010
Means-testing the private health insurance (PHI) rebate will help ensure Australia's
public health system can provide care for our ageing population into the future,
according to the Australian Healthcare and Hospitals Association (AHHA).
"Given the ageing of our population and the increasing cost of medical technologies and
other treatments, the pressure on the health budget is growing. To ensure that
Australians can continue to receive high quality health care in the decades to come, we
must be certain that every dollar spent on health delivers maximum value," Prue Power,
AHHA Executive Director, said today.
"This includes reducing expenditure on failed strategies such as the private health
insurance rebate. Despite costing the community over $4 billion a year, it has never
been evaluated against its stated objectives of supporting people to take out PHI and to
reduce demand on public hospitals.
"In fact, research from a number of health economists has demonstrated that the rebate
is an extremely inefficient mechanism for increasing PHI fund membership and for taking
pressure off the public hospital system. This was acknowledged by Treasury in its advice
to the Prime Minister before his election that directing these funds towards public health
services would achieve much greater health gains.
.
"Based on this evidence, AHHA's preferred option is to phase out the rebate altogether.
However, means testing would at least eliminate this wasteful allocating of health
funding to those people who clearly do not need subsidies in order to afford private
health care.
"AHHA strongly refutes claims that any reduction in PHI membership would place
increased pressure on public hospitals. This is simply not supported by the evidence.
Public hospitals are under stress due to factors unrelated to PHI issues, such as
workforce shortages, ageing infrastructure and an insufficient focus on primary care and
preventive health.
"Means-testing the rebate would help direct scarce health resources into these areas and
be a much more effective strategy to reduce pressure on the public hospital system.
"AHHA calls on all opposition senators, in particular Senator Xenophon who we believe is
still considering his position, to support the Government's proposal to means-test the
rebate,” Ms Power said.
For further information/comment:
Ms Prue Power 0417 419 857
Means-testing health
rebate vital for public
hospitals
NEWS 
