Malcolm Turnbull says Medicare must update its technology to make it simpler and faster to deal with the health care agency.
Opposition Leader Bill Shorten used question time on Tuesday to ask the prime minister whether media reports about the privatisation of Medicare were correct.
"A 21st century government looks at innovative ways to improve every element of the government's services," Mr Turnbull told parliament.
Opposition health spokeswoman Catherine King asked whether the electronic health data of Australians could be sold to a foreign company.
Human Services Minister Stuart Robert told parliament it was important to "embrace the digital revolution".
"I would have thought those opposite ... would embrace the idea to use technology to make lives easier for Australians," he said.
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