Bupa reported a small increase in revenue but a decline in profit for its financial year 2020 with the company highlighting the combined impact of severe bushfires and the COVID-19 pandemic.
CEO Hisham El-Ansary said, “Overall, across our health funding and health provision businesses, Bupa delivered a solid result in challenging circumstances with underlying profit down 28% on the previous year. Financial performance was significantly impacted by the effects of the pandemic, investment in improving our operations and measures to support our customers and our people, combined with strong competitive pressures.”
“Our top priority during 2020 was to invest in supporting our customers, residents, and employees as well as the broader community through one of the most significant health crises of our time,” said Mr El-Ansary.
“As the health and economic impacts of the pandemic took hold, we launched a $50 million financial hardship relief package and delayed premium increases for our health insurance customers. We also put new safeguards in place to protect our aged care residents and front-line workers, introduced paid COVID leave and mental health support for our employees.”
Bupa said revenue in its health insurance business was "down slightly" to $6.84 billion. The company attributed the reduction to competitive market pressures and the actions it took to support customers in response to the pandemic.
Mr El-Ansary said, “Almost 50,000 customers have accessed our COVID-19 support packages so far, offering premium waivers, discounts and suspensions for health insurance customers. This, combined with delaying our 2020 April premium increase for six months saved customers $184 million.”
The company said its market share remained at around 25 per cent. "Incurred claims were lower due to lockdown restrictions on health providers and suspension of non-urgent elective surgery, with an expected rebound supporting the requirement to establish a provision for deferred claims in 2020," it said.
In response to the pandemic, Mr El-Ansary said, “We were the first health insurer to fund claims for services delivered via telehealth. We also introduced new mental health support, access to a digital fitness wellbeing app, innovative diabetes management options and a new physiotherapy treatment service delivered by virtual reality. Customers responded well to these initiatives with improvements in both our NPS scores and retention rates.”
Bupa said its health provision businesses were heavily impacted by the pandemic with clinic closures, additional employee costs and increased use of Personal Protective Equipment (PPE).
"As a consequence, these businesses generated an underlying loss of $52 million, which was $29 million higher than the previous year. Revenue increased by 18% to $1.98 billion, with a full year of operations under the Australian Defence Force contract, stable medical visa assessment volumes and improvements in our dental clinics and optical stores," it said.
"While revenue improved in these businesses, profitability was adversely impacted by pandemic restrictions despite the receipt of JobKeeper financial support for eligible optical and dental employees. This support enabled us to retain jobs and meet community needs for services as lockdown restrictions eased."
On aged care, Mr El-Ansary said, “Throughout 2020, we made significant investments to improve the quality of care and our operating model, as well as addressed previous compliance issues, with our last home coming off regulatory sanction in May.
“Bupa welcomed the recent release of the final report of the Royal Commission into Aged Care Quality and Safety. We are confident that with government and providers delivering on the recommendations together, older Australians will receive the quality of care they deserve, both now and into the future.”
Mr El-Ansary said while the pandemic had disrupted the industry placing pressure on our health systems, it also accelerated key consumer trends such as in-home care and adoption of telehealth.
“The transformation of the healthcare sector towards empowering the consumer has never been more important,” added Mr El-Ansary.