Ms Ley’s department has set up a taskforce to consider the “commercial provision of health and aged care payment services”.
“We’re not privatising Medicare… but shouldn’t taxpayers demand we step into the 21st century when it comes to the payment system?” Ms Ley told ABC Radio National.
“I want to see less dollars for that backroom bureaucracy and more dollars at the frontline for payments.”
Health Department Secretary Martin Bowles told a Senate estimates hearing the 30-year-old payments system was outdated and needed to be “revitalised” through technology.
He insisted the taskforce was still exploring options and no decision on whether to outsource or not had been made.
But Mr Bowles conceded the department probably would not be the most innovative.
He stressed the taskforce was engaging consultants to look solely at the Medicare payments system and not health services.
“I want to be able to explore options without having to say that we’ve made a decision that we’re outsourcing Medicare, I just think that’s outrageous,” Mr Bowles said.
“What we’re doing is we’re exploring options on how to make better use of public money in the delivering of fundamental services to the Australian community.”
Labor opposes the move and has raised concerns it could jeopardise patient data and move it offshore.
But Mr Bowles dismissed those claims as “madness”.
“Just because something is done by some other group doesn’t mean you hand over the keys to the kingdom on everything,” he said.
“So I think we’ve got to be really careful about the idea that just doing this will give everyone’s health information to everyone around the world.”
Labor Senator Doug Cameron saw the comment as directed at him.
“Are you accusing me of being mad because I said this morning that if you follow the banks, then the Philippines and India are where lots of these transactions go?” Senator Cameron said.
“Are you saying that’s not the case?”
Mr Bowles said the Health Department was very sensitive to the data it holds.