The West Australian reported on Tuesday that it was considering outsourcing the $50 billion Medicare and aged-care payments system to the private sector to replace back-office operations performed by bureaucrats.

Federal Health Minister Sussan Ley confirmed the department was investigating ways to digitise its transaction technology but emphasised no decision had been made.

"Everyday Australians use cards to make 'tap and go' payments, and apps to make payments, and yet Medicare has not kept up with these new technologies," she said.

Opposition health spokeswoman Catherine King was quick to swoop, labelling the concept "an utter disgrace" and questioning whether patients' confidential data would be safe in private hands.

Community and Public Sector Union state regional secretary Jessica Munday said such a change may have a great impact on regional areas, including Tasmania.

Fourteen of 20 Medicare staff transferred to the Boland Street one-stop-shop for government services in 2014 and Ms Munday said bureaucrats remained fearful following the closure of the Launceston arm of the Australian Tax Office and the Bureau of Meteorology shopfront.

"We are worried about what this means for regular jobs, and we call on the government to clear up its plans," Ms Munday said.

Health analyst Martyn Goddard said there was little evidence the private sector could perform such operations more cost-effectively than the public sector and noted the privatisation of services would be a hard sell for a Coalition government.

"The public is going to have to be convinced that Medicare itself is not under attack and that will be a hard task for the conservative parties," he said.