Ignoring it doesn't mean it doesn't exist

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According to CEO of the Consumers Health Forum, Leanne Wells, on health minister Greg Hunt's recently announced private health insurance reforms, "On the day of the reform announcement, the share price of the biggest publicly listed health fund, Medibank Private, touched a year-long high of $3.12."

Ms Wells made the statement in a wider comment published in the 'Pearls and Irritations' online journal.

The comment, which talks down private health insurance and Greg Hunt's reforms, is odd given the organisation she leads came out clearly and strongly in favour when they were announced.

“The Government’s health insurance reforms appear likely to deliver not only lower premium increases in the medium term but hopefully clearer consumer-friendly policies," said Ms Wells at the time. "This should be a breath of fresh air for families and individuals under pressure and contemplating dropping their cover after years of above inflation premium rises each year."

Now, according to the CHF boss, "While the 'major reforms to make private insurance simpler and more affordable' as described by Minister Greg Hunt are voluminous, their real world impact won’t hit until after they are implemented in 18 months."

Setting aside the fact Medibank's share price has settled back to lower levels, Ms Wells' comment reveals what appears to be an unfortunate prejudice against private health, not to mention a misunderstanding of how markets value a company.

On the share price, investors had probably priced in uncertainty in the lead up to Mr Hunt's announcement, discounting the company's value as they waited to know what was going to happen. Clarity on the reforms simply removed this uncertainty.

Would the CHF boss really have preferred the altenative; that investors reacted badly to the reform announcement? 

She continued, "The notable feature of Australia’s heavy investment in health insurance is the lack of hard evidence to support the cost and performance of subsidised private health insurance."

This is simply untrue.

According to a recent study commissioned by Private Healthcare Australia and conducted by social policy research firm, Evaluate, government spending on the rebate is economically efficient, both in terms of direct economic costs and overall welfare gains.

Yet it seems that for some "hard evidence" is only ever acceptable if it supports their arguments. Ignoring evidence that does not support your arguments does not mean it does not exist.

It remains a confounding and very confusing reality that a group, so often leading the charge against private health insurance over affordability, appears committed to massively increasing its cost for millions of Australians through removal of the rebate.

Then the suggestion government should redirect the rebate to direct commonwealth funding for public and private hospitals. 

"We don’t know the answers to such questions and whether the same amount of funding invested in a different way, say direct to public hospitals and private hospitals, would deliver a better bang for the buck," said Ms Wells.

Well, we actually do know because Evaluate's report found, "...there are some respects in which health expenditure via the PHI Rebate is more efficient than direct expenditure through the public system."

As for direct funding of private hospitals, who would fulfil the current role of private health insurers in monitoring, managing and containing costs? Another bureaucracy?

"Two aspects of the PHI package which hold out some hope of improved insight into the cost benefits of health insurance are the proposed establishment of two committees to explore out-of-pocket costs and 'low value' care," concludes Ms Wells.

Committees - seriously?