Consumer costs impacting membership: PHA


Private Healthcare Australia says the latest APRA quarterly statistics showing an increase in out-of-pocket costs for consumers has driven a further decline in the number of people with private health insurance.

The statistics show out-of-pocket payments for hospital episodes in the September quarter increased 5 per cent compared to the corresponding period last year - from $284.20 to $298.55. Out-of-pocket payments for medical services, where one was payable, rose 19.3 per cent to $154.

The proportion of services with no gap increased in the past year from 86.2 per cent to 88.1 per cent.

At the same time, the number of insured Australians fell over the past year.

According to PHA chief executive, Dr Rachel David, while 84 per cent of Australians with private health insurance believe it represents value for money, their main concerns are premium affordability and out-of-pocket medical costs.

“Health funds are restricted by law from controlling what doctors’ charge, and from providing cover for medical services provided out of hospital. The minority of private health services attract a gap payment and this is great news, however gaps charged tend to be in critical and highly emotive areas like cancer treatment, reconstructive surgery, childbirth and anaesthesia. Gap payments charged for services are increasing on average at a rate higher than CPI. 

“Health funds understand the MBS freeze has impacted the ability of doctors to offer no-gap services, but health fund gap cover simply cannot chase rapidly increasing fees without putting premiums up for everyone. There is a critical need for GPs and their patients to be given access to likely out-of-pocket charges before referral takes place, to give price-sensitive consumers the ability to choose the most cost-effective option between specialists with equivalent qualifications. There is also an urgent need to relax restrictions placed on health funds from negotiating with specialists to cover the gap for some essential services provided out-of-hospital, like cancer treatment. Failure to do so will lead more consumers to desert private health, for fear of being left out-of-pocket.”

Dr David said a whole-of-sector commitment to transparency around issues including hospital and specialist fees was required.

“Health funds invested millions of dollars towards improving transparency during the reform process, to develop policies such as the Gold/Silver/Bronze/Basic model with a focus on reducing complexity and simplifying consumer choice. It is vital that consumers know what they are buying, what they are not buying, and that their policy of choice is not only affordable, but meets their health and life-stage needs.

“It’s time to extend the reach of transparency across the whole sector, so hospitals, medical device suppliers and medical specialists are all held accountable for reducing waste and low value care in private health, and keeping the lid on rising premiums and out-of-pocket costs," added Dr David.