The New Daily

Medicare sale could lead to US-style health nightmare

Hiving off the Medicare payments system to the private sector could leave Australia with an uncontrollable juggernaut attacking the health budget.

Medicare sale could see US style health.

The Turnbull government’s proposal to sell off Medicare’s payments system represents the beginning of a slippery slope to an American-style privatised health system which costs twice as much as Australia’s and prices millions out of the market, some observers claim.

ACTU president Ged Kearney weighed into the debate, telling The New Daily that the privatisation of Medicare would compromise standards, threaten jobs and see Australians’ medical and health records handed over to a for-profit operator with no guarantees around privacy and security protection”.

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“You only have to look to the United States’ broken health system to see the dangers of heading down this path. Medicare is a national treasure and must be protected from any sort of creeping privatisation push,” Ms Kearney said.

Health Minister Sussan Ley has confirmed the government is looking at a Medicare partial privatisation and had asked “those who manage payment systems elsewhere how it might work in the back room technology that drives the Medicare payment system”.


It’s a dog of an idea, say opponents. Photo: AAP

Ms Ley said Medicare’s IT systems dated from 1984 and passing the payments system to private operators could allow it to “step into the 21st century”.

What’s on the block? 

Just what services the government is planning to outsource is not clear. Medicare’s payments systems turn over $21 billion – add in aged care and the Pharmaceutical Benefits Scheme and the figure comes to $42 billion.

But figures of over $50 billion have been suggested which unions say implies that the aged pension payments system will be outsourced as well.

A spokesman for the Community and Public Sector Union (CPSU) said the union had been unable to determine how much of the payments system the government wanted to privatise.

“We’ve tried to get documents under FOI (freedom of information legislation) but the searches come back 99 per cent redacted with most of the wording blacked out.”

Outsourcing the payments system could threaten the jobs of between 5000 and 10,000 public servants as the positions shift to the private sector.

“Sometimes jobs move in the public service but no decision has been made,” Ms Ley said.

Doctors concerned

Australian Medical Association vice-president Dr Stephen Parnis said he was “very concerned”.

“Medicare is a huge and complex system and there has been no consultation with medical practitioners,” he said.

“Tens of thousands of medical practices are essentially agencies for Medicare and how they will be affected is unclear. The issue of data handling is also a concern as the data has medical histories in it,” Dr Parnis said.

Professor Jeff Richardson, foundation director at the Monash University’s Centre for Health Economics, said it was “desirable” for them to improve the payments system with new technology.

However, those improvements could be made within the public service.

Doctors were not consulted. Photo:AAP

Doctors were not consulted. Photo: AAP

“The administrative costs of Medicare are very low and it’s a very, very efficient healthcare system,” he said.

“I’m not sure doing it in the private sector would be any advantage.”

Medicare, he said, was more efficient than private health providers.

Medicare the cheapest

“Medicare’s expenses are around two per cent of its overall turnover whereas in the private health funds it’s more like 12 per cent. We have to be very, very careful about handing a large government monopoly over to the private sector,” Professor Richardson said.

Stephen Duckett, program director of health at the Grattan Institute, said he didn’t think outsourcing payments system for Medicare and other services was a problem.

“I don’t think it matters who runs the processing technology,” he said.

“When you get a passport you go to Australia Post but the Department of Immigration and Border Protection still issues the passport and controls the process. Medicare could have agents to operate its payments system in the same way.

The important issue was the regulation of privacy, Mr Duckett said, adding that “strong contractual penalties of, say, $1 million for leaking private information” could be enforced.


  • ArghONaut

    How disingenuous. If Medicare systems are from 1984 put funding into it and modernise them. How difficult is that concept? Obviously too hard for a Liberal hell bent on putting dollars into private pockets. The problem is arguably a lack of sufficient funding to keep up, not that it has been neglected on purpose. The capitalistic countries that outsource everything pay more and get less with even less responsibility and accountability. The pollies and CEOs responsible never lose a pay cheque or a bonus no matter how bad it gets.

  • Angry Chair

    I can’t wait for Woolworths Healthcare to spill my medical history nationwide when they get their grocery rewards data mixed up with health data. If we had less fat smoking drunks in Astraya we wouldn’t have a health problem.

    • Ceci Pipe

      If we spent the money just used to subsidise private health insurance then not only would Medicare be in the black, we’d actually have the money to overhaul the system twice over.

      And that’s just private health insurance, there’s even more money spent on other areas of private health which we could put towards public healthcare.

  • g-lock

    If the current payments system requires between 5000 and 10000 public servants as claimed, it clearly needs to be dramatically overhauled. If only government didn’t have an atrocious track record delivering IT projects…

    • Take those numbers with a grain of salt.

    • Ceci Pipe

      Keep in mind those numbers 1) cover all of Australia, 2) sounds like it’s including at least some front line staff, 3) following on from 2 seems like they’re including absolutely everyone involved and not just a few techies maintaining automated systems. Any private party would either by accessing a much smaller portion of it and so be much more inefficient or having a monopoly would need that many people nation wide.

      Though knowing private they’d cut the amount of people and introduce wait periods for anything to be done.

  • very pissed off

    we should not go down this path. yes the system needs an overhaul but everyone who isn’t wealthy should be entitled to medical care. I’m sure they can find other ways to get more money out of us and unlike america people shouldn’t be left to die just because they don’t have insurance to cover them. How bad is it when we don’t even care about our own people anymore other than how much more taxes can they pay to fund the lifestyles of the wealthy

  • travellersjoy

    It’s the government that is stuck in the “greed is good” 1980’s, not our health system.

    The white shoe brigade took over Canberra after their successes in Brisbane and Perth – and useful idiots across the country voted to hand them our whole economy on a platter.

    They have taken great advantage of our generosity, asset stripping state and Commonwealth governments of trillions of dollars of value, and worse, income. We used to own and get the benefit of a whole lot of goods and services until we gifted them to millionaire and billionaire corporate players, mainly foreign.

    Hands off Medicare! Restore the integrity of public health, abolish all subsidies for privatised health services and private health insurance.

    • Yes that $30 billion a year wasted on private health insurance could be used to make the public system second to none.

  • Wayne Daubney

    I’m asking for a full copy of my medical records before they become ridiculously expensive to obtain.

  • John

    We get to vote and these idiots keep getting elected. We get what the “majority” deserve.

  • Mike at Old Bar

    It’s a kite flying exercise, as usual. Like the 15% GST.

    Kite flying is typical of governments both Left and Right “hey, look over there….”.
    Takes the sheeples’ attention off other things such as the failed NBN, detention of kids whatever.

    • Except that these things are core beliefs for the Libs.

    • Ceci Pipe

      Left governments? Where are these mythical creatures? Are you referring to the ALP because while they’re marginally left of the LNP they’re still a right wing party. Stalin was right wing, his proposed (but not implemented, even his bastardised version) economic system still ran with right wing ideology, it just had a few caps on it.

      No secondary wealth generation for instance, you’d work for your money and not get paid just because other people worked, but it still relies on an unspoken automatic, cosmic, karmic, immediate reaction to our actions, a reward for hard work.

      There’s the Nordic style but that’s resting right wing, they’ve just taken a little chance out of the equation.

      There are no left wing governments except in the feverish fantasies of the far right.

  • The “Grattan Institute” supports it well that’s one Liberal think tank that does so no surprise there.

  • Reverse Robin Hood is all the Liberals know.

  • wallabyted

    When has privatisation (supposedly more efficiently administered) reduced the price of anything ? My phone bill (including line rental) went up after Telstra was sold, Medibank health insurance premiums definitely went up (despite the Dept of Finance recommendation stating there was no reason to expect premiums to increase after privatisation). The modus operandi of private companies is to make money for its office holders and shareholders, why would anyone expect anything else from privatisation ?

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