Healthcare reform

The government is currently considering a range of options for reforming the government health system in Australia.

Having pursued a policy of ever-growing government spending and control in health over the last 40 years (including 5.8 percent annual growth over the past 10 years), people are increasingly coming to the conclusion that the system is broken.

Unfortunately, the answers being suggested are more government spending and more government control. Once again, the bureaucracy is being rewarded for failure.

The socialist approach is unlikely to work in the short-run and destined to fail in the long-run. According to the governments own estimates, by the middle of this century government health costs will go up by about 3.5 percent of GDP, which would require the GST to more than double. And that doesn’t include new government schemes like Denticare.

These challenges cannot be fixed with by throwing ever more money into a failing system, or by centralising the system with the Commonwealth government. And the answer certainly shouldn’t include an 8.5 percent tax hike on low-income workers. Instead, the government should consider structural reforms, such as those recently introduced in the Netherlands.

The Dutch have introduced a market-based system where people buy all their health cover from a range of regulated private providers, with the government providing a partial subsidy for all people and an additional subsidy for low-income people. Similar ideas have been suggested by the Australian Centre for Health Research.

The government is right to be re-thinking our health system. But instead of increasing taxes on low-income workers, throwing money around and centralising the system, the government should instead be looking at market reform that makes the system sustainable.

6 thoughts on “Healthcare reform

  1. More central government control with more money thrown at it? I’ve come from a country that does healthcare that way. The UK’s NHS has become so bad that the Department of Health no longer asks staff if they’d be happy to be treated in the hospital where they work because too many are saying no (see here). People are often denied treatment only to find out that it’s funded elsewhere in the country – the so called ‘postcode lottery’. There are apparently more admin, clerical and management positions than there are hospital beds, and thousands come down with hospital acquired infections every year (including me, though unlike some I’m still around to talk about it). If Rudd & Co can’t look at the NHS and see it as a warning not to take Australia down the same route then I’m worried the ALP may have fallen for the “envy of the whole world” guff that British politicians of all three main parties tend to come out with whenever Health is mentioned.

  2. It is unbelievable. I wonder what merit is there is fixing the problem by using more resources? any of us can do the same.
    The real merit would be to improve efficiency and quality with the current available resources.

    But as you would expect form typical socialist … to any given problem the answer will always be MORE STATE, MORE REGULATION, MORE INTERVENTION and of course lest not forget : MORE TAX BURDEN on us.

  3. We need strong competition. Get all the hospitals privatised and get them fighting over the welfare.

    The goverment can also lower the cost of health by lowering the restrictions that they place on doctors. Don’t give the power to a 3rd party to approve and license doctors, this just makes them a union that will reject people to keep their pay high. We should be encouraging doctors to come here from overseas and lower the average doctors/sugeons wage.

  4. Have look at the graph posted with the article on the 12 August. Australia seems to have close to the lowest health care cost per head. Facts are so inconvenient when trying to push a ideological position aren’t they.

  5. No it doesn’t. Please re read the graph and realise that you have conflated private and public spending, and equivocated costs with expenditure.

    “Facts are so inconvenient when trying to push a ideological position aren’t they.”

    I don’t know charles. Maybe that’s why you misread the graph?

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