Regulation, Private Health Insurance, and the Australian Health System

by Stephen Duckett and Fiona McDonald

Whether government should intervene in a private health insurance market is an open question. Why should government support an industry, such as the PHI industry, if it is no longer viable, or not as profitable, in changed market conditions? In this paper for the McGill Journal of Law and Health, Fiona McDonald from the Australian Centre for Health Law Research and Stephen Duckett from Grattan Institute write that any nation contemplating directly supporting the PHI industry should do what Australia has not yet done: conduct a full and open inquiry into the direct and indirect costs of a PHI regulatory framework, and the costs of other options, such as direct payment of private hospitals or additional funding to the public health care system.