This is the approach that advocates of health reform must adopt now that the Abbott government's co-payment initiative appears doomed to defeat.
This is why the CIS has developed a health reform 'Plan B' designed to eliminate the political obstacles that frustrated the government's modest health cost-sharing proposal.
Instead of trying to force everyone to pay something for GP and other medical services, we should flip this proposition. Instead, we should give people the option of taking control over their own health dollars and let them save and spend their own money on health care as they wish.
What is needed is a new vision for healthcare in Australia, one based on the low cost Singapore Health Saving Account (HSA) model, which delivers First World standards of care and health outcomes.
While Singapore devotes less than half the amount of GDP to health, and spends far less per person on health than Australia, the UK and New Zealand, life expectancy is superior to all three countries.
In Lessons from Singapore: Opt-Out Health Saving Accounts for Australia, David Gadiel and I argued that Australia could emulate the cost-effective Singapore model by allowing people to voluntarily trade their Medicare entitlements for an annual 'Health Voucher' worth average per person government spending on health – approximately $4,500 in 2012-13.
This voucher would be deposited in a HSA linked to a person's superannuation account, and HSA funds would be used to meet the cost of specified health expenses including GP services and health insurance premiums to cover the cost of chronic and catastrophic conditions.
In an ageing Australia, using the funds accumulated in HSAs – rather than taxes – to pay for health, would relieve future health cost pressures on government budgets.
Over a person's lifetime, the savings generated by more cost-conscious use of services and lower insurance premiums would accrue as higher superannuation balances and retirement incomes. The financial advantages would make HSAs an attractive option.
Adapting the HSA model within a framework of introducing greater choice into the health system is also politically feasible, since those who wished to remain with Medicare could do so.
Dr Jeremy Sammut is a Research Fellow at The Centre for Independent Studies.
Home > Commentary > Opinion > Health reform needs a ‘Plan B’
Health reform needs a ‘Plan B’
This is why the CIS has developed a health reform 'Plan B' designed to eliminate the political obstacles that frustrated the government's modest health cost-sharing proposal.
Instead of trying to force everyone to pay something for GP and other medical services, we should flip this proposition. Instead, we should give people the option of taking control over their own health dollars and let them save and spend their own money on health care as they wish.
What is needed is a new vision for healthcare in Australia, one based on the low cost Singapore Health Saving Account (HSA) model, which delivers First World standards of care and health outcomes.
While Singapore devotes less than half the amount of GDP to health, and spends far less per person on health than Australia, the UK and New Zealand, life expectancy is superior to all three countries.
In Lessons from Singapore: Opt-Out Health Saving Accounts for Australia, David Gadiel and I argued that Australia could emulate the cost-effective Singapore model by allowing people to voluntarily trade their Medicare entitlements for an annual 'Health Voucher' worth average per person government spending on health – approximately $4,500 in 2012-13.
This voucher would be deposited in a HSA linked to a person's superannuation account, and HSA funds would be used to meet the cost of specified health expenses including GP services and health insurance premiums to cover the cost of chronic and catastrophic conditions.
In an ageing Australia, using the funds accumulated in HSAs – rather than taxes – to pay for health, would relieve future health cost pressures on government budgets.
Over a person's lifetime, the savings generated by more cost-conscious use of services and lower insurance premiums would accrue as higher superannuation balances and retirement incomes. The financial advantages would make HSAs an attractive option.
Adapting the HSA model within a framework of introducing greater choice into the health system is also politically feasible, since those who wished to remain with Medicare could do so.
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