I believe the Private Health Fund system is inefficient as there are too many funds which leads to much duplication of services. At the least the government should reduce the number of funds offering private insurance. This could be done by only allowing them. a reduced premium increase and letting market factors take their course. Those collapsed fund's members should be able to move to another fund without losing their accumulated benefits.
Better to put the several billions spent on private health insurance annually into public hospitals.
One of the great myths of the health insurance debate is that there is merit in having a single health insurer — that competition somehow leads to duplication.
The obvious extension of this logic is that all the clothes shops in Chapel St should be closed down, except one, since there is duplication. And while we’re at it, let’s close down all the souvlaki shops because, you know, there is duplication.
Where duplication does exist in health insurance, say in the number of actuaries employed, competition makes up for it through the innovation of new insurance products. Moreover, it is competition, not government mandate, that will eventually lead to lower insurance premiums — although the extent that this will occur will depend on how health care costs are controlled.
So if we have a single health insurer, why not make it publicly owned? And if we have a single clothes shop why not make it publicly owned too? Hell, why not combine clothes shops and souvlaki shops into Fur and Meat Emporiums and have the waif-thin fashionistas (‘That looks great on you’) teeter on high heels slicing lamb off the gyro.
Real reform to private health insurance can only be achieved by getting the right balance between private and public health insurance, and then deregulating health insurance to permit real competition. But we don’t like competition in health insurance.
‘Would you like yoghurt or sauce on your insurance policy, sir?’
Back of the envelope
- Cost --- Many billions
- Expected impact on average earnings --- Soviet era style living standards
- Expected impact on economic growth --- Big cut in GDP from reduced competition
- Impact on incentives --- Crappy customer service, poor health outcomes
- Impact on government spending --- big increase
- Impact on taxation --- big increase
- Winners --- Party officials
- Losers --- Everyone