Rethinking Healthcare Co‐Payments to Improve Efficiency and Equity

Australia's healthcare system relies heavily on patient co‐payments, which account for around 16% of national health expenditure. Although this percentage is in line with the OECD average, the design of co‐payments is a major source of inequity and inefficiency. Current arrangements contribute to pro‐rich utilisation of specialist care, regressivity in household financing, geographic variation in access and distorted incentives that discourage efficient care. These problems will be amplified by demographic ageing and rising inequality. This opinion piece synthesises the empirical evidence on the consequences of Australia's current co‐payment structure and proposes reforms to improve consistency and predictability of financial signals across programmes as well as incorporate notions of capacity to pay. These reforms aim to reduce the harm imposed by current co‐payments and deliver a more equitable and efficient health system.