Catholic Health Australia calls for a greater focus on member benefits

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Catholic Health Australia has criticised private health insurers for an increase in management expenses over the past four years.

According to the private hospital and aged care provider, the insurers increased their management experiences by 17.43 per cent between 2019 and 2022. Management expenses, which include operational and administration costs, represent around 10 per cent of total premium revenue.

Catholic Health Australia said the growth in management expenses for the four year period compares to a 4.64 per cent increase in benefits.

The comparison is complicated because the period used has been significantly covered by the pandemic that saw an extended shutdown of health services with private insurers forced to retain a 'deferred claims liability'.

Catholic Health Australia policy director Caitlin O’Dea said, “When insurers receive $26 billion a year from everyday Australians, including $7 billion in government subsidies, there should be some oversight on how that money is spent.”

“It is totally indefensible that during Covid the money spent on executive salaries, plush offices and perks by some funds is growing at a faster rate than the money they are spending on treatment and care for their members. This is a very worrying trend.”

Ms O’Dea said greater funding from insurers for claims was essential to assist hospitals in their treatment of patients amid soaring costs due to inflation.

“Hospitals are facing extraordinary inflation pressures – with costs for PPE rising at a staggering 600 per cent – and yet health funds are able to ratchet up their management expenses while simultaneously pulling back on hospital treatment,” she said.

“Australians need to have the confidence that their health fund will pay for their treatment when they need it, not when it suits the insurer,” added Ms O’Dea.