New plan to reverse steep rises in health insurance premiums

"I've already been meeting with private hospitals, insurers and medical leaders on the next stage in terms of private health insurance reforms," Mr Hunt said.

"My goal is to continue to reduce the pressure on health insurance costs, but also to increase the value proposition," he said. "You can only do it by actually taking out cost drivers."

The minister is looking for savings and wants stakeholders to come to him with suggestions, having already cut the cost of prosthetic devices such as hip and knee replacements.

"We've asked all of them to come individually but ideally to work together to identify any drivers that might have common ground," Mr Hunt said on Tuesday.

Private Health Australia chief executive Rachel David said insurers wanted to reduce the cost of hospital admissions - which make up 70 per cent of their expenses - by "making sure that care is delivered in the appropriate setting".

"There are some people being treated in hospital for things like [post-surgery] rehabilitation when they would be better off being treated in the home or in a day facility," Ms David said.

"We're looking at that as a way to bring premiums down, to make sure patients are appropriately triaged."

While some "old, frail" patients needed to be treated in hospital, she said, younger patients "who have nothing else wrong with them" should be able to go home.

Enabling this to happen would require a change to government regulations.

As critics on both sides of the debate call for radical changes to Australia's healthcare system - with some calling for insurer rebates to be abolished, while others want insurance to be mandatory - Mr Hunt said the government remained committed to the current "hybrid" system.

"It's a mixture of public and private and that allows people to have choice," he said.

"It means there are better opportunities for innovation, faster treatment."

The minister rejected calls by health insurer NIB's managing director Mark Fitzgibbon to abolish Medicare and make private health insurance compulsory, saying to do so would be "catastrophic".

"The vast majority of private hospitals would face an existential crisis... and the public hospitals would be under massive pressure," Mr Hunt said.

"We are committed to [Medicare] for life, forever ... But equally we're committed to private health insurance."

He dismissed a report by the Grattan Institute that portrayed the interaction of Medicare and private health as "muddled", saying its author "has long had an issue with the Australian system and doesn't support the notion of a public and private system".

Australian Medical Association President Tony Bartone said the government needed to "solve this situation and solve it soon".

With 70 per cent of elective surgery being delivered in the private system, he said, public hospitals "couldn't cope" if Australians abandoned private cover.

"We can't have increasing people dropping out, increasing cost being left in the system and increasing premiums," Dr Bartone said ahead of his speech to the National Press Club on Wednesday.

Any changes to reduce insurer costs must "increase value back to the consumer, the person insured, and make sure that it gives them choice," he said.

The speech, titled Time For Action, will call on the federal government to outline a clear agenda after taking few health policies to the May election.

"The government now has clear air, it's had its term of reviews, it's collated the information - it's got three years now to actually implement," Dr Bartone said.

He said the nation's health system needed better coordination as "many parts all come together haphazardly at the moment".

"There are bottlenecks, there are barriers, at times there are unnecessary delays for treatment ... we need to be more coordinated and more seamless."