Federal Politics Health

Medicare could outsource payment operations

The government is examining the outsourcing of payment processing for Medicare, the PBS and aged care. Image Credit: Dave Hunt

A can of worms was opened for the Turnbull government when it was revealed this week that it was investigating the outsourcing of payments for Medicare, the Pharmaceutical Benefits Scheme and aged care in an effort to modernise its payment systems and reduce costs look at this website.

If the government proceeds with the plan, the administration of $42 billion in payments would be handled by an external partner rather than bureaucrats. Presently around 1400 bureaucrats are employed to handle claims and authorise payments.

Health Minister Sussan Ley wants a payments system which is consumer-friendly and faster. The minister says that the current system dates back to 1984 and is hopelessly out-dated, relying primarily on cheque based payments.

The opposition has seized on the news, claiming that the government is planning on privatising Medicare – a message which will strike a chord with many Australians who fear any major changes to the health system. Unfortunately, Bill Shorten’s scare campaign is misguided – the government is looking at outsourcing some of Medicare’s processes not selling it off.

While the plan may have merit and result in some efficiencies, the major concern is with the contracting out of a government program to the private sector and the privacy of user’s data. Any attempt to outsource Medicare’s processes must be backed by strong privacy protections to avoid the misuse or profiting from patient data.