Dear Pericles,

I'm not as confident in there being any saving graces with the privatisation of MBP.

Just look at the current differences between MBP and BUPA which, undoubtably would not be as great after its sell off.

MBP benefits paid as a percentage of contributions are higher than BUPA. It has lower management expenses as a percentage of contributions, 8.9 to 9.7. BUPA's surpluses are 20% higher and their management cost of $272 per policy are 25% higher than MBP's.

MBP has a market share of 28.4% but only fields 23.4% of the industry's complaints. The figures though for BUPA are 9.7 and 10.4.

In my opinion any sell off would continue our march toward the disaster of the US system.

I take your point that “Fluctuations in its traded value have zero impact on the cost of funds “ but your position was “the "dividend" is closer to a "cost of funds" equation than rewarding shareholders.” I would argue that 6.25% bond returns would be superior than any share dividend before any capital gains considerations.

But ultimately it doesn't matter what we call these commissions more the fact that they are appropriated from the health spend.

If this whole lot were government managed then it would negate the need for finding money on the open market or paying a shareholder dividend. Also there would be large savings on administration costs as most health transactions have a Medicare component in them regardless of their source. I might have to leave your health management question until tomorrow to do it justice.

Dear Yuyutsu,

I have an inkling that what you consider to be “corrupt, unfair and coercive.” may not be what I consider them to be. Sounds a little Ron Paulian to me but would welcome clarification.

A question of your scheme if I may; if a person goes an uses all the vouchers at their disposal to take the alternative medicine route to tackle their ailment, what happens to them if they are no longer in a position to afford a life saving conventional medicine remedy?

Dear Csteele,

"Sounds a little Ron Paulian to me but would welcome clarification"

-As far as I can tell, Ron Paul opposes any form of public health, which is too extreme and certainly "un-Australian". No Australian party ever suggested we should go down that path.

In fact, my above favourite policy is a variation on the Australian LDP's health policy: http://ldp.org.au/policies/1155-health-returning-control-to-the-consumer

"if a person goes an uses all the vouchers at their disposal to take the alternative medicine route to tackle their ailment, what happens to them if they are no longer in a position to afford a life saving conventional medicine remedy?"

To begin with, any responsible person should only avoid all forms of health-insurance if they have a backup option. The transition to my scheme will involve an education campaign that will make that clear.

In my personal circumstances for example, since I can afford paying myself for all but the most expensive medical operations/treatments such as liver-transplant, I will use a portion of my vouchers to purchase a health-insurance with about $50,000 excess, thus covering only those rare treatments which I cannot afford paying myself.

Back to your story, that ill but irresponsible person should have NO CERTAINTY of treatment, because certainty encourages irresponsibility. In practice however, in 99.999% of the cases s/he WILL end up getting the conventional treatment somehow -either:

1) s/he will have funds, a house to sell/mortgage, a car to sell, superannuation, etc.
2) their family would help.
3) somebody will give them a loan (a friend, an employer, a stranger).
4) a charity will provide.
5) a doctor will volunteer to provide the treatment for free.
6) the ill person will give a film-producer rights to make a movie out of his/her story, receiving treatment-funding in return.
7) the government will give them a compassionate exceptional loan beyond the letter of the law.

Note that persons who DELIBERATELY seek to abuse and take advantage of the system shouldn't receive assistance.

As per the above link, "The LDP believes government should intervene only on a case-by-case basis, where other avenues have been exhausted."

Depends which way you look at it, csteele.

>>I would argue that 6.25% bond returns would be superior than any share dividend before any capital gains considerations.<<

Don't forget that approximately Stg 1 billion debt currently supports BUPA's world-wide operations. Last year they paid Stg 80 million in interest, on a total debt of Stg 1.4 billion. That's not a significant number, a little over 1% of revenues.

Translated to the BUPA's Australian operation, that would equate to a local interest bill of A$47m. Last year NIB paid investors 13c a share, around A$60m, and they are less than a quarter the size.

As a method of funding it would appear to be considerably less onerous than keeping a bunch of shareholders happy.