Medi-fraud remains a significant drain on the resources of the health system in Australia, despite the monitoring of doctor practices via Medicare. Federal and state governments have been unwilling to address the systemic causes of medi-fraud. However, the rise of managerialism and the consequent influence of economic rationalism over health policy is resulting in the medical system coming under scrutiny as hospital administrators search for cost containment. The required quantification of hospital practices and the introduction of competition principles into the public health sector have the potential to curtail medical autonomy and combat medi-fraud. Whilst such reforms may combat medi-fraud, they consequently may undermine the access and equity tenets of universal health insurance and result in the ultimate demise of Medicare itself.