Australia should abolish Medicare and force people to take out private health insurance instead, according to the boss of one of the largest health funds, who argues it would solve an impending funding crisis in both the public and private sectors.
NIB managing director Mark Fitzgibbon's proposal - which one health economist slammed as "self-serving" - comes amid growing concerns about the sustainability of the private health insurance industry, as more healthy, young people abandon their cover, taking premiums that subsidise older members with them.
Mr Fitzgibbon on Tuesday said Medicare faced a similar demographic threat as private insurers, as the population aged and the ratio of taxpayers to retirees narrowed.
Compulsory private insurance - with the government paying for the cover of those unable to afford it - would maintain universal healthcare while propping up funds with more healthy members, he said, and mean the government would not have to support people who could pay their own way.
"We love this word Medicare, it's like Bambi," Mr Fitzgibbon said. "I don't want to be seen as the one who wants to shoot Bambi, but I think there's a better way of delivering universal healthcare which is more efficient and fairer."
The same demographic reality is what led to the introduction of compulsory superannuation, Mr Fitzgibbon said, while also arguing that privatising the Medicare "monopoly" and adding competition would create a more efficient system.
But Stephen Duckett, health program director at the Grattan Institute, an independent think tank, said the public no longer believed privatisation was inherently beneficial after failures in electricity and gas, and that Mr Fitzgibbon had not made any compelling argument for change.
"It's self-serving," he said. "All it does is transfer onto the public purse more directly responsibility for the woes of the private health insurance industry."
Mr Duckett said the argument that wealthy people were getting unnecessary handouts from Medicare did not hold water, because most wealthier people contributed far more to the system through tax than they drew from it through Medicare.
"And most poorer get more from Medicare than they pay - that's how Medicare works."
Federal Health Minister Greg Hunt said the government would not consider the proposal.
"The government is absolutely committed to Medicare and rejects this idea," Mr Hunt said in a statement.
Mr Fitzgibbon acknowledged his proposal would be politically divisive, but said a number of countries in Europe had similar systems in place.
He said within five to 10 years he would like people with private health insurance to be able to drop out of Medicare, and for private insurance to become mandatory within 20 years.
All public hospitals should be privatised, he said, because that would mean all patients would have the same waiting periods for treatment, as opposed to the current two-tiered system.
The ASX-listed NIB is Australia's fourth largest health fund, with about 8.5 per cent market share, sitting behind Medibank, Bupa and HCF.
Analysts expect Australian health funds will come under continued financial pressure because of younger members cancelling their insurance, and as healthcare costs rise faster than funds can increase premiums.
The Grattan Institute has previously called this a "death spiral" and questioned whether about $9 billion in government subsidies the industry receives is money well spent.