The public hospital system is now so good Australians can get away with not purchasing private health insurance, major investment bank Morgan Stanley has found.
In a 63-page analysis obtained by News Corp the investment bank warns “many people now see the free public hospital system as adequate catastrophe cover”.
Morgan Stanley’s executive Director Daniel Toohey says the private health industry has become lazy and the government should refuse any premium rises for three years to force the industry to sort itself out.
The report even dismisses the government’s tax penalty that forces higher income Australians into private health cover as losing its sting as premiums skyrocket.
The revelations come as health funds are under fire for covering less and less of their member’s health bills as profits surge.
Rising premiums and declining value is behind a continuing fall in health fund membership, which has declined from a peak of 47.4% in 2015 to 45.8% in September 2017.
Morgan Stanley predicts health fund membership will continue to fall placing pressure on private hospitals but it says public hospitals will be able to cope with increased demand.
“Our analysis suggests that under a status quo scenario, the public sector could feasibly absorb the excess demand caused by an ageing population and falling participation in the private hospital sector,” the analysis says.
Recent multi-billion dollar state government investment in public hospitals means they now have more single rooms placing private hospitals under threat.