I Think There Should Be No Private Healthcare in Australia!

This is a provocative statement.

It captures what seems to be a growing sentiment, that private healthcare is unnecessary, inequitable or driven by profit rather than patient care.

But before we accept that narrative, we need to examine the economics.

In late 2025, NASOG surveyed private obstetricians across Australia, with approximately 50% of those in practice responding. The results showed that the cost of administering a full-time private obstetric practice in Australia approaches $500,000 per specialist per year before any income, superannuation or personal drawings are taken. Even part-time practices carry fixed costs closer to $400,000 annually.

These are not discretionary expenses. They include staffing, rent, compliance, medical indemnity, accreditation, digital software subscriptions, equipment, consumables and regulatory overheads. Capital equipment alone can run into six figures and requires ongoing maintenance and accreditation.

Small business economics in Australia are relatively consistent across industries. A common rule of thumb is that approximately one third of gross revenue covers operating costs, one third goes to taxation obligations and one third represents pre-tax income. That income is then taxed again at marginal rates.

If baseline operating costs are approaching half a million dollars annually, viability requires gross revenue approaching $1.5 million per practitioner. Gross revenue is not a doctor’s income. It is the total business turnover required to keep the doors open, staff paid, equipment accredited and services compliant.

This financial reality sits in stark contrast to the public funding framework.

Under the National Health Reform Agreement activity-based funding model, an antenatal consultation in a public hospital attracts approximately $320 in net activity-based funding. In private practice, the Medicare rebate for a subsequent antenatal consultation is $42.00.

The difference is $278 per consultation.

Expressed as a percentage, $320 is approximately 662% higher than $42 — meaning public funding for that consultation is around 7.6 times the Medicare rebate paid in private practice.

In the private system, the funding gap is carried directly by the patient through out-of-pocket costs. In the public system, the full cost is carried collectively through taxation.

Public care is not free. It is funded differently.

Australia’s health delivery was deliberately designed as a blended system — neither fully nationalised nor vertically managed by insurers. The coexistence of public and private care was intentional, built to preserve universality and patient choice.

When private care is viable and accessible, it reduces demand pressure on the public system. Patients who are willing and able to step outside the public queue create capacity for those who most need comprehensive public services. This includes patients with complex medical, social or cultural needs.

However, that balance only works if private practice remains economically sustainable.

There is a significant knowledge gap in Australia about how healthcare funding operates. Many patients do not understand activity-based public funding, federal Medicare rebate structures or the small business economics underpinning specialist practice. That knowledge gap fuels a simplified “greedy doctor” narrative that does not reflect the structural funding reality.

If private viability collapses, patient demand does not disappear, it shifts. The public system absorbs it. And public funding per encounter will not decrease when volume increases.

If the argument were to be that Australia should move to a fully nationalised system, then that is a legitimate policy debate. But that debate must be honest about cost, taxation and system design.

The current blended model works because it distributes responsibility.

• It allows patient choice.

• It preserves workforce flexibility.

• It supports regional retention.

• It creates capacity buffers in times of strain.

The issue is not whether care should be affordable. It definitely should.

The issue is whether funding structures align with real delivery costs — and whether public discourse reflects economic reality rather than assumption.

Marcus Tullius Cicero wrote: “To be ignorant of what occurred before you were born is to remain always a child.”

If we are to protect healthcare affordability and accessibility for Australians, we must first understand how our health system was designed, and why.

That is a key part of the program of our upcoming Insight Series.

Alongside clinical updates and advocacy briefings, we will hold O&G specialist only sessions, to allow frank, lawful discussion about fees, funding structures and economic sustainability.

This is not about price setting.

It is about understanding cost, transparency and system design so that we can collectively improve affordability and access for women in Australia.

If you are serious about shaping the future of obstetric and gynaecology care, not reacting to it, join us.

Insight begins with informed conversation.

Learn More and Register for the Insight Series