Why is everyone talking about Medicare privatisation?

Malcolm Turnbull has started saying the Government won’t privatise Medicare. Is that even a thing? We explain.

The West Australian newspaper revealed a big secret in February this year. The newspaper’s respected federal politics editor Andrew Probyn reported:

Medicare, pharmaceutical and aged-care benefits would be delivered by the private sector under an extraordinary transformation of health services being secretly considered by the Federal Government …

… the $50 billion-plus outsourcing would be the first time the private sector has delivered a national service subsidised by the government.

That’s big news, because Medicare pays for most health care in Australia. Medicare is how the Government pays the doctor for you. In Australia, you don’t usually need cash or a credit card when you are treated by health professionals such as GPs and specialists. That’s what your Medicare card is for.

This is why you use a Medicare card when you go to the doctor — because that’s how Medicare makes sure that you get health care and that the doctor gets paid. That system is run by the Government and it’s owned by the Government. It is paid for out of taxes like the Medicare levy, and you can rely on it.

But some people argue that it should be run and owned like a business — the way banks or credit card companies run EFTPOS machines and credit card terminals and automatic tellers. That idea, letting a business run Medicare payments for a profit, is the plan to privatise Medicare.

Bill Shorten and the Labor Party absolutely reject this plan.

Now Mr Turnbull and the Liberals have started saying this won’t happen.

But what have the Liberals been saying up to now?

Well, just after the West Australian revealed the privatisation plan, the Health Minister Sussan Ley told the Sydney Morning Herald:

This is why the Department of Health is investigating ways to digitise its transaction technology for payments to a more consumer-friendly and faster format …the work continues.

The same newspaper article revealed top public servants were running a Medicare privatisation task force. The task force has proposed trials forcompanies like the big banks and Telstra would take over parts of Medicare to get ready for a full sale.

That is how Medicare would be privatised. A few weeks ago Bob Hawke, who was the Prime Minister who started Medicare, said:

You don’t start a Medicare privatisation taskforce unless you aim to privatise Medicare.

Then new information came out about the Government’s plan.

Media reports showed that Mr Turnbull and the Liberals have told the Productivity Commission to investigate privatising all human services including Medicare.

The terms of reference include examining “private sector providers and overseas examples like the United States” for alternative service delivery models.

And new details have come out that show how many companies would like to buy the Medicare payments system. The Australian Financial Reviewreports that 48 different operators have expressed interest, including big banks, telecommunications companies, and even Northrup Grumman, a multi-national security company.

There was even a $5 million contract with PricewaterhouseCoopers to manage the digital payments transition, concluding at the end of the year.

So what will happen next?

The only way to be sure to save Medicare is if Bill Shorten and Labor are elected on 2 July.


About Michael Cooney

Michael Cooney

Michael is a former Executive Director of the Chifley Research Centre. He was previously Speechwriter to Prime Minister the Hon Julia Gillard MP, Senior Adviser at the HR Coombs Policy Forum, Crawford School of Public Policy at the Australian National University, and was Principal Policy Advisor to Federal Labor Leaders Kim Beazley and Mark Latham.

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