The health insurance industry must work with the government to reduce healthcare costs, which would result in lower premiums, Mr Craig Drummond, Chief Executive of Medibank, which is Australia's largest health insurance provider, has urged.
Saying that the sector is at a critical juncture and the time to act on reform is now, he pointed out that the country relied too heavily on unnecessary hospital treatment compared with other parts of the world, reported The Australian Financial Review.
Voicing concern over an affordability crisis in health insurance, he highlighted Australia's soaring cost of living which he warned is contributing to the mass exodus of young people from private health insurance policies.
"We should all be concerned about where we are at in the system. There are pressures; it is not dire and the best way to ensure it doesn't become dire is to deal with those issues," said Mr Drummond.
He added: " It is in our best interests if we can lower the costs of what we can do because we will have fewer customers dropping out.
"But the costs are being driven by the system. We are passing on costs; we are not generating the costs growth. But if we don't front into these issues, we will be subject to more scrutiny."
Worries over premiums, which have increased by 55% since 2009, have led to the federal government commissioning a Senate inquiry into the value and affordability of private health insurance.