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Medicare: Policy Issues and Options

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journal contribution
posted on 23.10.2017 by Richardson, Jeff
By international standards Australia's health scheme, Medicare, is relatively efficient. Despite this, it is structurally unstable. The private health insurance and hospital industries operate at full cost and in competition with a public sector that is free' at the point delivery. Despite claims to the contrary this has not, to date, resulted in a decline in the size of the private hospital sector. However, over time, this must occur and a decision must be made about the desired balance between the public and private sectors. Theory and evidence indicate that the full privatisation and deregulation of health care is not a sensible option. Alternative options include the use of an ad hoc subsidy to prevent the decline of the private sector, a movement towards a largely government dominated industry, and the adoption of managed competition' to activate the internal market' in health care. In principle, the last of these options has the greatest potential for the achievement of allocative efficiency.

History

Year of first publication

1994

Series

National Centre for Health Program Evaluation

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