Andrew Podger, a former Health Department secretary and public service commissioner, writes:

I have no doubt Ragg is right in highlighting problems of inequality in Australia’s health system, but I am also not sure we should expect the system to achieve full equality even if it were operating well.

Slowly and surely governments are recognising that our reliance on insurance-based approaches – reimbursing people for seeing doctors and getting prescription medicines etc – is insufficient, particularly for Indigenous people and many rural and regional Australians, and indeed many in our cities.

We need to complement these arrangements with more directly-government-funded services such as Aboriginal Medical Services, or through special incentives to reward health professionals who work in areas of need, and with more investment in preventative measures.

Some regional integrated funding arrangement might facilitate much more even access to health services, and also address what I still see is our biggest structural weakness – the strict boundaries between types of care which inhibit people from receiving the most appropriate and cost effective care.

But should we strive for full equality? Is it wrong for some to be able to pay more to get more? Why is Ragg surprised (and dismayed) that people with PHI, who pay more of their own money despite also getting some subsidies from government (on average substantially less than those who are not privately insured), may actually get better health care including for cancer?

They are more likely, for example, to have regular endoscopies and colonoscopies. Whether these are cost effective or not  I do not know, but I would be stunned if the extra investment did not lead to more early detection of cancers.

The Rudd Government is as unclear as the Howard Government of its real view on the role of PHI vis-a-vis Medicare. I suspect Ragg would prefer either the UK approach (where essentially those who decide to opt out of the NHS pay the full price of any service they receive) or the Canadian approach (which outlaws private funding of Medicare-covered services).

Australia has always provided some support for those who choose to pay for private patient hospital services (by PHI subsidies or private hospital bed subsidies), and I for one have no objection at all. It is similar to allowing some government subsidies for private schools, offering choice within an essentially universal system.

The caveats are that the universal Medicare system is sufficiently generous and effective, that the private system is truly competitive, and that the private system takes genuine responsibility for the health care of its members.

In fact, the current arrangements are a dog’s breakfast. Rudd was right to move against the crude Medicare levy surcharge arrangement, which is a disguised means test and hugely distorting, but I have no idea where he plans to go from there.

There is much to do, to improve competition amongst funds and hospitals (for both public and private patients), and to make PHI more responsible and effective.

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