Demanding Supply: Mixed Healthcare Financing in Australia

This paper will analyse the financial relationship between private and public health insurance in Australia. Private health insurance in Australia is both highly regulated and subsidised with the argument often being it provides support for the universal public system. With private health insurance providing duplicate insurance in Australia, I present a theoretical analysis of how the private and public system may interact when duplication occurs. I investigate the theoretical arguments for and against the use of private duplicate health insurance. Empirical analysis is performed on both Australia and the OECD to provide numerical evidence of the theoretical arguments. The unique relationship of the private and public health systems is evidenced in the results which provide many interesting and complex policy issues for both Australia, and possibly other similar healthcare systems around the world.