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New study proves what the PHI rebate really means for Australians

5 October 2017 - 10:12am

The World Health Organisation regularly ranks the equity, efficiency and quality of health systems around the world. In their most recent report, Australia ranked in the top 20 per cent again, above the United States, and even our neighbours across the Tasman. 

This success is in part thanks to the successful coexistence of our private and public systems, which give Australians choice and improves our system as a whole. A recent independent study by research firm Evaluate has demonstrated this, revealing the efficiency of the government's private health insurance rebate. 


Every dollar spent on the PHI rebate is 15 per cent more efficient than a dollar spent of the publix system. Every dollar spent on the PHI rebate is 15 per cent more efficient than a dollar spent of the public system. Every dollar spent on the PHI rebate is 15 per cent more efficient than a dollar spent on the public health system. 

The true value of the PHI rebate

The Private Health Insurance (PHI) Rebate is a government initiative that encourages Australians to purchase hospital, general treatment and ambulance cover. It does so by awarding tax rebates of up to 34.6 per cent of the cost of relevant premiums, dependent on age and income. 

The aforementioned study found that this initiative is incredibly efficient and effective. In fact, the research discovered that every dollar directed to the PHI rebate is up to 15 per cent more efficient than a dollar spent on the public health system. 

Suzanne Still CEO at HICA commented on what these findings mean for Australia's health system as a whole:

"The PHI rebate is about giving people a choice, and encouraging them towards private care so that those who really need it can use the public health system." 

"These findings prove the value of the private sector to Australia's overall health system. They show that the government's expenditure on rebates is justified, and that the private health system is well placed to continue to take the pressure off the public system."

The combined effectiveness of private and public

Australian Prudential Regulation Authority statistics show that over 11.3 million Australians (46.1 per cent of the population) have hospital cover. Every one of those 11.3 million take pressure off the public system, allowing it to better serve those who need it - reducing wait times and improving service quality.

In her commentary, Suzanne Still described the effectiveness of the rebate in improving equity of access to healthcare:

"The PHI rebate (and private health insurance in general) is about giving people a choice, and encouraging them to use private healthcare so that those who really need it can use the public health system. The PHI rebate helps achieve this by sustaining a $23 billion dollar industry, with a relatively small (and very efficient) investment."

Australia's healthcare system is a brilliant example of public and private sectors working together to provide a better service for all Australians. If you're not covered yet, get in touch with the team here at HICA, and we'll talk you through how the PHI rebate could save you money.