The soaring price of healthcare highlights that health system funding needs an overhaul, University of Newcastle Professor Francesco Paolucci says.
Professor Paolucci's comments coincided with the state government announcing on Thursday a Special Commission of Inquiry into healthcare funding in NSW.
"It's timely for government to do this exercise in a way that might lead finally to a system that minimises the pressure on out-of-pocket spending for individuals," said Professor Paolucci, a health economist.
The professor will host a seminar on Friday on "the future of healthcare financing" at the University of Newcastle's business school.
He said there were "strong reasons" to examine the direction of health system funding, governance and organisation.
"The issues are clearly structural because the pandemic is well over," he said.
The commission of inquiry will examine the "existing governance and accountability structure of NSW Health" and the way it "funds health services delivered in public hospitals and community settings".
It will examine "strategies available to address escalating costs, limit wastage and identify areas of improvement in financial management".
It will also look at the "impact of privatisation and outsourcing on the delivery of health services and health outcomes to the people of NSW".
Professor Paolucci said healthcare costs were "rising faster than inflation".
He said the private health sector was "meant to alleviate the pressure on the public system".
While the "current private health system does that", he said the private health insurance offset [the government's contribution to private health insurance] "isn't as optimal as it could be".
He added that the system needed a "more efficient regulatory framework".
"It's not creating the right incentives for the operators of the system to be as efficient as they could be. That means there are continuous pressures on spending and premium increases."
Professor Paolucci said the private and public health systems need to be "integrated" to overcome problems with duplication and fragmentation.
"That means one passage for everybody and if you want more services offered by public and private providers, you buy additional coverage," he said.
A single "overarching regulatory framework" was needed to co-ordinate healthcare for people "from prevention and primary care to acute care and aged care".
He said the health systems in the Netherlands, Switzerland and Germany were good examples to follow.
