One of the first initiatives of the newly elected Whitlam Labor government in 1972 was the nationalisation of the Australian health care system. Every doctor in Australia was bleating about "the doctor-patient relationship", when it was obvious the only relationship the doctors were interested in was the relationship between the patient's wallet and the doctor's bank account. The health system didn't implode as the doctors had predicted, but it did cost them money.
Compared to the US system, the Australia health care system is a model of sanity. No-one asks, if you have a heart attack, who is your insurer? Everyone is covered for these events. However, if you have private insurance, which is subsidised by the government, you will go to the head of the queue for elective surgery, such as hip replacements, knee operations and so on. Thus, private insurance is a discretionary item.
The Australian healthcare system is a mixture of public and private. It is impossible to meet the demand for health care, as it is always expanding. As the population ages, as in Australia, health outlays will grow and the demands on the healthcare system, especially for elective surgery, will expand. Having a vigorous private health system makes good economic and political sense.
For many years, Australia has had a strong private health insurance industry. Most states had a major insurer, usually mutually owned, such as the Hospital Benefit Fund (HBF) in Western Australia. In other words, it was a not-for-profit model. Now, the health insurance sector operates on a profit based model. Some of the main players are BUPA from the UK and the acquisitive NIB.
Medibank Private was established in 1976 to provide competition to the private sector insurers. No government would dare interfere with the basic model of health care in Australia. That would be political poison. The doctors whine they don't make enough money, but I haven't seen any of them claiming low income benefits at Centrelink. Medicine is like anything else. Stars like ophthalmic surgeons make a motza while the average general practitioner can make around $250,000 if he or she is in a high volume practice.
Shadow Treasurer Joe Hockey announced in February 2010 that Medibank Private, which is wholly government owned, would be sold off by an incoming Coalition government. Medibank Private is the government's ;private health insurance company. The incoming Liberal Treasurer needs to find $60 billion fast. As for the Libs so called "razor gang" finding this sort of money through savings in the bureaucracy, having seen several in action, I have three things to say -- "ha ha ha". To do this, they would have to find savings equivalent to abolishing the Department of Defense, the biggest department in the federal government. If you believe the razor gang can find these sorts of savings, I have a nice near-new bridge going cheap.
Medibank Private is a profit maximising entity. The substantial annual dividend it pays to the government is very much appreciated. No reason exists why the government should own it. From personal communication, Medibank Private does not attempt to restrict premium increases to the rate of inflation. Premiums are increasing at about twice the rate of inflation. Due to the "community rating" model, policy holders liable to catastrophic injuries due to the nature of their employment or recreation, such as professional sportsmen and skiers, pay the same premiums as everybody else. Changing this would open a can or worms no-one would like to confront. The private health sector is one of those things Labor "doesn't like" because "rich people" use it to jump the queue. Queues are the essence of socialism. Private health will get a much better deal from the Coalition.
If Joe Hockey were wise, he would aim for an initial public offering (IPO) rather than a trade sale. A trade sale to industry would raise a lot of money quickly, but it would put the noses of millions of policy holders -- or "members" as Medibank Private prefers to call them -- out of joint. A float along the lines of the Commonwealth Bank of Australia IPO would make Joe Hockey a very popular man.
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