This research, which consists of a number of sub-projects, aims to understand a range of issues relating to private health insurance (PHI) utilisation in a New South Wales (NSW) public hospital. There has been controversy around the Australian Federal and State Government funding arrangements in relation to healthcare services in Australia, and added complexity is seen with the increased uptake of PHI in Australia. The controversy generally revolves around which body (State or Federal Government, PHI company, patient) should fund the ever-increasing cost of healthcare in Australia, as well as the decision from a patient's perspective when electing which body will fund their care when visiting public hospitals. This thesis focuses on the latter part of the problem; the complex and controversial nature of this topic motivated the researcher to gain a deeper understanding of the decision-making process of patients when it comes to choosing to use PHI. While much has been written about the interaction between PHI and Medicare systems, and the healthcare funding arrangement in Australia in general, very little research has been conducted into the factors that influence the utilisation of PHI in public hospitals. This shapes the relevance and importance of the study, because there are several reasons as to why the utilisation of PHI in public hospitals is important. Firstly, using PHI in public hospitals provides patients with a financial choice. Also, it serves as an incremental source of income for public hospitals. In this way, patients (and PHI funds) provide a way for public hospitals to cover their capacity costs (infrastructure, medical technology). This, in turn, could make public healthcare more sustainable in the future. In this research, the rationale behind why patients choose to use or not to use PHI in public hospitals is surveyed. The results of 336 out of 450 respondents (indicating a 74.67% response rate) identified several main reasons as to why patients chose to use their PHI for the public hospital admission: the possibility of admission to a single room; the ability to choose their own preferred doctor; the opportunity to help the hospital and the community; and the occasion to avail of some of the other benefits that come with using PHI. The results have also identified several main reasons as to why patients have not chosen to use their PHI: they did not know they could use their PHI for their public hospital stay; they were worried that their health insurance premiums would increase if they used their PHI; and fear of out-of-pocket expenses. In the second part of this research thesis, a financial model was developed to aid the analysis of the cost and revenue impact of encouraging patients to use PHI. It has been found that during the 2011/12 financial year at Canterbury Hospital, a revenue of approximately $3 million (AUD) was raised, with a cost of $519,176.14. The return on investment (ROI) was 5.59 (i.e. the net revenue was 5.59 times that of the cost or 559%), indicating an excellent return versus cost. These results reaffirm that the efforts that public hospitals have devoted to encouraging patients to use PHI is worthwhile. These results surrounding PHI encouragement-strategies could potentially be used to develop possible methods for how PHI capture-and-conversion rates could be improved in other NSW public hospitals. However, while some have argued that public hospitals should not actively encourage patients to use their PHI given the multiple pressures bearing down on the Australian healthcare system, as well as the fact that the pitfalls of a mainly government-funded universal healthcare systems have been well documented , it is difficult to justify that the taxpayer-funded free Medicare public healthcare system would always be a sustainable sole-funding system in the future. Instead, allowing PHI to play a more active role in supporting a system under pressure, and allowing patients to have a choice, may assist in increasing the longevity and sustainability of the nation's public healthcare system.