The money could have been put into hospitals. There is no reason why public patients could not be treated in private hospitals if there is a shortage of public beds. Only government can contain health costs, not the private individual or private health funds. The higher expenditure in the US has generated phenomenal incomes for health providers and investors and worse national health outcomes in terms of infant mortality, morbidity and longevity than either Australia or Britain. Subsidising private health insurance premiums, and abandoning community rating in an attempt to drive more young people into buying unnecessary private health insurance, is a recipe for a long-term explosion in health costs.
Private hospitals exist to make money for their private shareholders by selling medical procedures.
According to a study by Professor Geoff Richardson of Monash University, the chances are two to four times greater that private patients admitted for heart attack will have angiography, bypass surgery, angioplasty or stenting procedures compared to public patients. The study showed no discernible difference in health outcomes for the two groups of patients. The Government claims it wants to take pressure off the public hospital system. The simplest, fairest and most efficient way to finance health is through the levy, which should be set at a level to cover health costs, with a compensating reduction in general taxation. Such a system provides automatic lifetime community rating and the Government has a big incentive to hold down health costs.