So which is more important? Sharemarket success for huge health insurance companies banking massive profits, or sending money overseas to medical equipment providers? Or a third option - some creative thinking from a government that's prepared to back our own producers in this rapidly changing and developing hi-tech industry? [Don't hold your breath hoping, because the big players are doing everything they can to keep this choice off the table.]

Let's start at the beginning.

In 14 weeks' time the government will make a critical choice: how to pay for the medical equipment items used by private insurers. That's everything from replacement hips and prostheses to hospital beds and all that other multitude of other devices that have become so vital to healthcare today.

When the health system divided into (publicly funded) Medicare and the (government-subsidised) private system, medical devices weren't a significant cost. Even a decade ago the three-way split was, basically, between paying for doctors and staff, funding hospital infrastructure, and making a profit. Unfortunately, today costs are growing faster than inflation. There's also a new player, medical technology, crashing the party. Dividing up revenue has become a four-way tug-of-war. Nobody wants to give, and the fight's getting ugly. The gloves are off.

Specialists, professionals and hospitals are safest: there's no "give" left and, more importantly, nobody wants to be seen to be attacking the front-line workers providing care. This leaves insurers and equipment providers fighting over what's left of an (inadequate) pool. Just like financial companies everywhere, the insurance industry thinks it deserves the money more than those making the equipment. It points noisily to a few instances of genuine price-gouging on the part of equipment providers.

Because the government doesn't want to buy into the fight, it's saying "sort this out among yourselves". The equipment providers have suddenly realised they've only got a couple of months left to sort this out.

The trouble is, many of the providers are big multinationals. They quite simply don't care. If the insurers won't pay for the latest and best prostheses, for example, they'll just send us their old, second-best hips and joints. But these cuts will have a disastrous effect on our own nascent med-tech industry. If we want to grow small Australian manufacturers and support development, these stunning businesses need a signal guaranteeing this country has a future as a supplier of equipment, and not just a buyer of hips and knees made elsewhere.

Abandoning this industry now would be catastrophic. This doesn't mean it won't happen, however, because it's much easier for government to close the door on an industry that's just starting up than attempting to wrestle dollars away from the huge funds.

Just think. Companies like Medibank Private, Bupa, HCF, Nib and HBF are the five biggest funds. They're well-known and big players. They insist they're trying to keep premiums as low as they can by screwing the best deal possible from equipment providers. So they are, but the problem is we'll get what they pay for, and they've got no interest in establishing a vibrant industry here. That's why the fight is now getting dirty. Both sides are accusing the other of putting profits before patients.

For 18 months now, fears about COVID have caused a great deal of elective surgery to be postponed. As a result, the insurers' profits have skyrocketed. They say they're quarantining these for the future, while buying up front-line medical groups and bolstering their profit at the expense of equipment manufacturers.

The industry lobby group, the MTAA (Medical Technology Association Australia) is pointing out the funds are currently banking super-profits, nearly double that of pre-COVID times, underpinned by soaring revenues and nearly flat claims. Chief executive Ian Burgess - who does his interviews using MS Teams wearing a T-shirt and looking as if he's just come from the gym - is, unsurprisingly, using these huge spikes in profit to demand the funds return money to members who've been paying out without the possibility of having surgery scheduled. He points to the extra $1.4 billion the insurance industry has banked and the recent profits of companies like Medibank, where profit soared a massive 14.4 percent to over $500 million. Insurers, he says, "should not take advantage of the pandemic to generate bumper profits and pay executives big bonuses".

Burgess wants this money returned to policy-holders, although there's fat chance of that happening. What his angry words and the sentiment behind them does demonstrate, however, is just how serious this fight's becoming.

With just over three months remaining to sort out a deal, it's become obvious the insurers aren't leaving anything on the table for the equipment providers. Most of us won't be any the wiser whatever happens. It will add to the pressure on public health, as more people will desert private health funds when they realise they're prioritising profits and aren't offering value. Those wanting good private medical care will simply go to Singapore for operations. A rickety system already being held up by Band-Aids and sticky tape will become increasingly unsustainable.

This will, eventually, further squeeze the funds, but that's the sort of thing they can worry about later, by which time the chief executives will have left with significant bonuses. The government, similarly, has seemingly no interest in sorting out a sustainable future for the industry because the polls are looking tight and every dollar spent buying hips isn't available to bribe voters and keep them happy.

The window is closing. It's time to develop a medical technology sector here.