Younger consumers are spending more on private hospital insurance, but getting less value for their money. The industry faces major issues, as costs for older people rise and younger people leave. This report lays out a transition to make private hospital care better value for both consumers and taxpayers, and viable for the long term.

Private health insurance premiums could be cut by up to 10 per cent if private hospitals were made more efficient and stopped over-servicing, according to this Grattan Institute report. The report also highlights the additional costs generated by a handful of ‘greedy’ doctors charging their patients more than twice the official Medicare Benefits Schedule fee.

Australia’s private health insurance industry fears it is in a death spiral, and politicians need to rethink whether or to what extent taxpayers should continue to subsidise the industry. This paper finds that Australians are increasingly dissatisfied with private health insurance, and policy reform is urgent.