Health insurance: managing risk in the private sector

Abstract

How does Australia, in both its private and public sectors, provide the health care that Australians want and need at prices they can afford to pay? If this is to be sustainable in the private sector health funds need to be given a capacity to manage their risk exposure. Provided insurers continue to insure sick people, costs will be driven not so much by the age profile of the insured population (though it will have some effect) as by technology and its capacity to supply and create the demands of the aged (not ageing per se). Handling these costs is the real challenge for the future.