There is plenty for Australia to learn from the health systems of other countries, including Taiwan.<\/p>\n
Australia\u2019s health system is among the most fragmented in the world. It sits awkwardly between a universal public system and a subsidised private insurance market.<\/p>\n
Funding is split, and responsibilities are blurred, with no single actor accountable for outcomes. It\u2019s highly incoherent, with inevitable consequences: rising inequity and declining value<\/a> for our growing healthcare spend \u2013 the opposite of what we tell ourselves our system strives for.<\/p>\n But the health systems of Taiwan and various European countries show that other approaches are cheaper and, more importantly, deliver better outcomes for patients.<\/p>\n Taiwan: single payer, hybrid provision<\/p>\n In Australia, close to 40 entities pay for healthcare. This includes nine governments (state, territory, Commonwealth), 29 private health insurers, and patients themselves (e.g. when you pay to see the GP or a specialist<\/a>).<\/p>\n In contrast, healthcare in Taiwan<\/a> is financed through a single national insurer \u2013 the National Health Insurance Administration (NHIA).<\/p>\n The NHIA acts as the system\u2019s central purchaser and negotiator, while care is delivered by a mix of public and private providers.<\/p>\n Having a single payer has several advantages: it reduces administrative duplication; eases the coordination of care across the system; and increases accountability for outcomes and performance. It also grants greater leverage to control costs through negotiating fees and reducing low-value care on behalf of all Taiwanese people.<\/p>\n The Taiwanese system performs remarkably well<\/a> compared with other high-income countries.<\/p>\n It\u2019s also cheaper. Taiwan\u2019s health expenditure is around 7% of GDP<\/a>, compared to the OECD average of 9.3%<\/a>. Australia\u2019s multi-payer system costs more than the OECD average \u2013 around 10.3% of GDP.<\/p>\n Through Medicare and the Pharmaceutical Benefits Scheme (PBS), we already have elements of a single-payer model. The PBS illustrates the power of a single purchaser. Australia spends US$540 per person<\/a> on prescription drugs. As shown in the chart, that\u2019s below the average of other high-income countries and less than half of the US, which has a highly fragmented purchasing system.<\/p>\n<\/p>\n Extending this approach \u2013 by making the Commonwealth the main purchaser of hospital care \u2013 could simplify funding and improve equity. Private insurance could still play a role in ancillary services, but hospital care would be funded through a single public entity.<\/p>\n Private hospitals would negotiate with one purchaser, not 29 private companies, creating more certainty and stability. A standardised \u201cnational efficient price<\/a>\u201d\u2013 something that the private sector has been calling for<\/a> \u2013 would become the norm.<\/p>\n Patients would no longer require private health insurance, thus would not have to worry about penalties or lifetime loading. The $12 billion <\/a>in annual public subsidies directed to private insurance could flow directly to hospital care.<\/p>\n Europe\u2019s Beveridge model: public funding and delivery<\/p>\n Another option is for the public sector to finance and deliver healthcare \u2013 known as the Beveridge model<\/a>.<\/p>\n People often associate this model with the NHS in the United Kingdom, but variants are used across much of Europe, including Denmark, Sweden and Norway, all high-performing systems<\/a>.<\/p>\n Under the Beveridge model, hospitals are publicly owned, and most care \u2013 often spanning primary care, aged care, dental and even social care \u2013 is provided within a single national system.<\/p>\n This creates a high degree of alignment between funding and delivery, which ensures clear accountability for access, costs, and outcomes. The model prioritises equity and universal access, with services largely free at the point of use.<\/p>\n For patients, a well-functioning Beveridge model means more equity, convenience, and coordination. Because patient data is held by just one organisation, duplication is reduced. Different parts of the system can easily exchange information with one another. This is difficult in our hybrid system.<\/p>\n Introducing the Beveridge model in Australia would be a major undertaking \u2013 even if limited to just hospitals. But recent experience, such as the return of the Northern Beaches Hospital<\/a> to public control after the collapse of its private operator<\/a>, suggests that nationalising hospital ownership is possible.<\/p>\n Indeed, rather than continued subsidies, might it not be better to nationalise private hospitals before they go broke?<\/p>\n The more significant challenge would be convincing the workforce \u2013 particularly specialists<\/a>, a politically influential group who are well served by current arrangements. Given the reaction to calls for greater fee transparency<\/a>, securing their engagement would be resisted vigorously.<\/p>\n The Netherlands: A regulated, multi-payer model<\/p>\n In the Netherlands<\/a>, funding is provided by multiple private insurers, but within a tightly regulated system. All insurers must offer a standardised benefits package, accept all applicants, and compete on price and quality.<\/p>\n Insurance is compulsory. Community-rated premiums (everyone pays the same regardless of their health status, age, sex, or claims history) and income-tested subsidies ensure that access to care is based on need, not ability to pay.<\/p>\n Provision is also predominantly private but also strictly regulated. Hospitals, for example, must be not-for-profit entities.<\/p>\n Crucially, insurers are expected to actively manage care. They negotiate with providers, steer patients towards higher-value services, and are held accountable for outcomes.<\/p>\n Australia has some of these elements \u2013 like community rating and risk equalisation \u2013 but in a weaker form. Crucially, insurers fund care<\/a> but have limited ability<\/a> to influence how it is delivered.<\/p>\n For patients, this decentralised quasi-market model means more choice but requires more administrative effort than Beveridge or Taiwan. One drawback is that the data is held by the various entities<\/a> providing insurance and services. Specific policy and legal frameworks are needed for data to follow the patient around the system.<\/p>\n What should Australia do?<\/p>\n The Taiwanese, Beveridge and Dutch models all achieve universal coverage through different means. Yet every country mentioned here outperforms Australia on the key metric of keeping people healthy (see chart).<\/p>\n<\/p>\n This suggests that these are system designs that predominantly drive equity and value.<\/p>\n No system is perfect. What matters is coherence \u2013 not whether a system is public or private.<\/p>\n Australia\u2019s current model lacks coherence. It sits awkwardly between single-payer and a fully functioning multi-payer system. Responsibilities are split between governments, insurers, and providers, which has resulted in duplication and diffuse accountability.<\/p>\n So, which direction should Australia take?<\/p>\n A move towards a single-payer model would prioritise simplicity, equity, and system-wide coordination. A move towards a Beveridge-style system would strengthen alignment between funding and delivery. A more regulated multi-payer model would retain a role for insurers but require stronger rules, greater transparency, and a clear expectation that they actively manage care.<\/p>\n However, any of these approaches would represent a more coherent model than the current one.<\/p>\n Because ultimately, the question is not whether care is public or private.<\/p>\n It\u2019s whether it delivers value for all Australians.<\/p>\n Luke Slawomirski is a health economist and former clinician, has worked for State and Commonwealth governments, the OECD in Pariw and is a Visiting Lecturer at Imperial College London. He will be a keynote speaker and panellist at our upcoming The Great Prevention Pivot Canberra Health Leaders and Workshop summit in Canberra on June 16 and 17. You can see the program and get tickets at www.wildhealth.net.au. As an HSD subscriber you are entitled to a 20% discount on all tickets using the following promo code: HSDT1HCS-4f3o9W<\/p>\n Missed the earlier parts of this series? Read Part 1<\/a> and Part 2<\/a>.<\/p>\n This article was originally published on The Point<\/a>. Read the original article<\/a>.<\/p>\n