The Cost Of Good Health

There’s a saying that money is useless if you’re not healthy enough to spend it. But with Australia’s current public / private health care models it seems that the wealthier you are the healthier you are. This is not to say rich people don’t get seriously ill. They just receive much better treatment when they do. For young patients faced with serious illnesses and locked out of private health insurance the difference is clear. When you’re not rich enough for healthcare, the current system sucks.

When Medicare was introduced in 1984 it was supposed to ensure equal access to health services for all Australians. The idea behind Medicare was free or low-cost medical and public hospital care for all, with the option to choose private health insurance. However, the idea that private health insurance is a choice is false. It is a decision determined by cash, not conscience. For those who can afford it, it has become a way of jumping the queue and securing faster treatment. For those who cannot afford it, or have been denied it due to pre-existing medical conditions, it’s a form of discrimination.

So what’s the deal with private health insurance?

Private health insurance (PHI) reduces waiting lists for elective surgery—this is all surgery for non-life-threatening situations for example hip replacements and eye operations. The public health system is under huge amounts of pressure and elective surgery waiting lists are long, sometimes years long. People with PHI can fast-track their way to treatment because they have access to private hospitals as well as public ones.

Insurance policies range from basic hospital (which covers the cost of hospital accommodation and some medical expenses) to luxury ‘extras’ packages, which can cover specialist healthcare like dentists, orthodontists and naturopaths.

The cost ranges from less that $10 per week to much more.

PHI, in crude terms, tops up state and federal health spending. In the late 1990s the percentage of people with PHI fell to the lowest levels since inception. The federal government has since introduced tax incentives to encourage people to take up PHI.

The story of 22 year old Semaema highlights the huge difference in treatment available to public and private patients. She is suffering from lupus, an autoimmune disease attacking her kidney tissue. She was locked out of private health insurance because she had a pre-existing illness. Essentially, because she was sick she could not get private health insurance and therefore could not ‘buy’ fast and comfortable hospital access. This is one of her stories from a public hospital in Sydney:

“One night came—it happens in the winter flu season a lot—someone else needed my bed. I was moved into the waiting room. I just had to wait for another bed in the hospital to get empty. The woman in the bed next to me was also told to move to the waiting room but she told the nurse she has private health insurance and she pays for a bed. She was angry and she didn’t have to move out of the bed.”

How long did Semaema wait for a bed? All night.

Semaema stops short of criticising her doctors and nurses. To her, they are busy people doing a difficult job under very difficult conditions. Truth is, their job, and Semaema’s life, would be easier if more beds were available for public health patients, and for everybody. Dr. Leanne Barren, a GP in Brisbane, agrees. She says if you walk around many of the state hospitals you’ll find entire wards filled with empty beds. Then where’s the bed shortage?

When public hospitals discuss bed-shortages they are referring to a shortage of available beds. There are physical beds in hospital that are not ‘open’ because the funding and staff are not available. “The problem is it costs money to keep beds open. All the hospitals have to run to budget and the cheapest way is not to have patients,” Dr Barren said. And so the waiting lists for public patients keep getting longer as fewer beds become available.

The private health care sector saves the government money by turning health into an income-generating industry. The Australian government says roughly half of all Australians (44 per cent in 2007) have private health insurance. Most of the people without private health insurance are young Australians under 30. Young people are not insured for one main reason: money. Two-thirds of the people without private health insurance reported that they didn’t have it because they couldn’t afford it.

Hospital waiting lists and bed shortages for public patients sit uncomfortably in a country that likes to think health care is a right not a privilege. Sitting in the emergency department with Semaema last month, waiting until 3am for a bed to become available as her kidneys were failing, I began to wonder about the ethics of having private health insurance. The Australian government is not wrong to ask people who can pay for private health insurance to contribute to health funding. The problem is that the current two-tiered model not only rewards those who can pay but punishes those who cannot. For the system to be fair, the two-tiered system needs to be dismantled and medical care needs to be distributed on the basis of needs not means.

By Elizabeth

Act Now
30 April 2009


Australian Bureau of Statistics (2008)

Australian Institute of Health and Welfare (2008) ‘Health Expenditure’ p.15

Consumer Guides: Private Health Insurance (2006)

Cornford, Semaema. [Interviews with Liz Moorhead] 27 – 28 August 2008

Department of Foreign Affairs & Trade (2008) ‘About Australia: health care in Australia’

Dr. Barren, L. [Interview with Liz Moorhead] 18 August 2008

Meagher, Reba (2007), Hospital Performance Improves As Demand Increases (online). 29 June 2007. Available:


Private Health Insurance Administrative Council (2008) The Australian Government