The Australian government announced it is taking applications from private companies hoping to process Medicare and pharmaceutical benefits claims. The decision to privatise medical payment processing is indicative of the government's recent trend toward fiscal efficiency, more privatised services and, in the end, savings for taxpayers.
According to The Australian Financial Review, more than $30 billion in payments through the Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Scheme (PBS) are likely to be outsourced by the Department of Health. The move comes at the recommendation of the Commission of Audit, which found that outsourcing payment processing could result in huge savings for Medicare, and subsequently Australian taxpayers.
The organisation selected for the task will face numerous policy changes and would have a heavy mission to accomplish. Processing MBS and PBS payments would involve conducting about 630 million transactions per year for the Department of Health, for a combined total of $29 billion in claims. It would also involve processing $2.5 billion in claims for the Department of Veterans' Affairs.
"We're determined to put into place a 21st-century payment system that will be more efficient for patients and doctors," Health Minister Peter Dutton said, according to the source. "It will reduce red tape for doctors and streamline their administrative processes and, we believe, deliver a saving to the taxpayer."
It is likely that the processing will be taken over by either the Australia Post or one of the four largest banks in the country. The financially troubled Australia Post had to cut about 900 jobs in June, and will likely be willing to take over the medical benefits processing in order to secure revenue. Should the mail carrier go public, a contract with the Australian government could be beneficial for valuation.
Though the change may mean good things for the Australia Post should it be chosen for the job, it may not bode so well for Medicare employees. With private Australian health insurance offerings already being highly valued by many Australian citizens, supporters of Medicare may have cause for concern. The decision to outsource payment processing will result in many public sector job losses, according to the source, and may mean big changes ahead as the government considers whether or not to outsource other processes, such as welfare payment processing. Australian citizens will continue to watch the transaction from public to private in various industries in the coming months.