John Menadue argues that private health insurance in its current form is unsustainable. He criticises the government's $3 billion subsidy for being inefficient. It is skewed towards affluent Australians and private health insurance funds passively pass on rising costs to customers rather than negotiating for better deals. On balance Menadue believes that private health insurance must be accepted, but he calls for the $3 billion subsidy to be diverted towards more efficient and socially beneficial areas.