nib's Mark Fitzgibbon ignited a political response earlier this week when he called for a dramatic long-term transformation of health insurance in Australia.
Writing in the Australian Financial Review, Mr Fitzgibbon questioned why the policy debate over private health insurance focuses on the product as "complementary" to the public health system rather than "substitutional".
The nib boss said the recent Grattan Institute "sidesteps" the reality that the private sector is dealing with the same challenges confronting the entire health system.
"That is, how do we continue to pay for a 'universal' healthcare system with an ageing population, burgeoning spending and ever-increasing dependency ratio of older retired Australians to younger taxpayers?" asked Mr Fitzgibbon.
"When Medicare (nee Medibank) was first introduced in 1974, Australia had over 10 taxpayers for every retired person. Today there’s a bit over five taxpayers and depending on who you believe, by 2050 there will be about three. As we did with other crucial social obligations, such as pensions with the introduction of compulsory superannuation in 1991, we have to somehow ease the burden and shift more healthcare funding responsibility towards those with the means to provide for their lifetime healthcare costs."
According to Mr Fitzgibbon, a "sensible policy approach would be to make private health insurance compulsory for all Australians with taxation devoted to subsidising the premiums for those who would otherwise be left behind. That is, high income earners would at one end of the scale pay the entire premium while at the other, those with low income would be fully subsidised."
He said compulsion would overcome the problem of younger people not participating and is "hardly a radical proposition when you consider Medicare is itself a compulsory 'social insurance' system."
He continued, "It’s not as if you or I can opt out of Medicare. And no different to the approach taken by many 'left-leaning' European governments that don’t feel it necessary to actually run a health insurance system to ensure cost-effectiveness and fairness."
Mr Fitzgibbon also argued for a 'near-term' reform to allow private health insurers to "cover the full spectrum of medical costs incurred by members."
"It’s a crazy anachronism that for example, the same doctor paid for by a health insurer for treatment inside a hospital can’t be funded by the insurer outside the hospital. It undermines the value of health insurance, confuses people, often leads to heavy out-of-pocket costs and a bias towards hospitalisation (often avoidable). In order to attract younger people with a better value proposition it’s the biggest non-regulatory lever we could pull," he said.
"Not being able to cover primary care treatment also constrains health insurers playing a more active role in supporting disease prevention and treatment in more cost-effective clinical settings."
He also said another "near-term opportunity" would be to allow people to totally opt-out of Medicare provided they take full coverage under private health insurance.
Mr Fitzgibbon's call for reform did not win political backing with health minister Greg Hunt saying "I have to say clearly and categorically that we reject that proposition. Clearly, categorically and absolutely."