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10 Oct 2017


Private Health Insurance is a current topic of interest to Federal Council, with reviews and submissions having been presented.  AMA, with its diverse views and interests, must contemplate the distinction between private medicine and the self-serving private health insurance industry, with its tax-payer subsidised high profits for local and overseas shareholder owners and (apparently guaranteed) executive performance bonuses. 

It is clear that if the current arrangements were invented today, they would be laughed out of the building, from the tax-payer subsidy of very high private income to the invention of “junk” policies, borrowing the term from the financial bond markets, and much based on poorly comprehended avoidance of a taxation stick. 

With falling rates of membership due to assessed high cost and poor value, and routine stiff premium increases annually, the private health insurance lobby has tried to lay much of the blame for its woes on the public hospital sector.  Instead of critically examining the value of its own products, it has decided to attack the rights of patients for having the temerity to use the private health insurance for which they have paid in a public hospital.  

In its efforts to be seen as doing something to address premium increases, the Federal Government has leapt on the insurers’ almost pathetic sob story and responded with the release of a paper titled: Options to reduce pressure on private health insurance premiums by addressing the growth in private patients in public hospitals. 

As always, the landscape has changed in response to alterations in payments for healthcare.  All the options raised in this paper would simply reduce the level of funding available to public hospitals in favour of private health insurers, and thus significantly reduce the health care choices available to patients possessing private health insurance, the very customers of the same private health insurers seeking to maintain their own privileged lifestyles. 

Lead by expert advice from the Council of Public Hospital Doctors, the AMA has rejected out of hand any policy proposals that limit patients’ ability to use their private health insurance for treatment in a public hospital, warning that such a move would both restrict patient choice and further disadvantage public hospitals. 

There are very good reasons why a patient may choose to use their private health insurance for treatment in a public hospital.  In regional and rural areas, there may be no other option available due to the lack of private sector services. Public hospitals are generally equipped to handle the most complex of medical care requirements and, in many cases, may represent the most appropriate clinical setting for best outcome medical treatment. 

In a constrained funding environment, the supplementary revenue to public hospitals and salaried medical practitioners (and generally without any out-of-pocket charges to the patient, such that those practitioners accept the arbitrary scheduled payments invented by the various health insurers based on their own interests) generated from private patients makes an important contribution towards the recruitment and retention of medical practitioners, improved staffing, teaching, training, and research, and the purchase of modern new equipment.  

Put simply, the private health insurance lobby can’t have it both ways.  On the one hand, the industry is offering and promoting public hospital-only private insurance policies, but at the same time objecting to more and more of their members opting to use that very insurance in a public hospital.  It is thus guilty of blatant hypocrisy. 

The reality is that Insurers and governments only have themselves to blame for patients increasingly choosing to be treated as a private patient in a public hospital. 

The private health insurers offer a bewildering array of products in the tens of thousands, with varying levels of cover and many exclusions, requiring high intelligence to be able to decipher and comprehend.  On top of this, public hospital funding has failed to keep up with community demand for services, with the Commonwealth and the States and Territories guilty of under-delivering in this area for many years.  This is well laid out in the AMA’s Public Hospital Report Card – worth another visit to digest its information. 

It is little wonder then that public hospitals are choosing to promote the option for patients to be treated privately and that patients are taking it up eagerly.  The answer to the Government’s dilemma is simple – fund our public hospitals properly and make private health insurers offer patients quality products that don’t leave them with unexpected “bill shock” when they are treated in a purely private system.  


Published: 10 Oct 2017