Medibank chief financial officer Mark Rogers says Australia has one of the best health systems in the world, based on dual public and private care, but there needs to be a conversation about rising costs and falling participation.
Mr Rogers was part of a panel at the UBS Australasia Conference in Sydney last week with Robert Cooke from Connelly Health Consultants and Tim Daniel, CEO of St Vincent’s Private Hospital Sydney.
"We are paying up to three times the price for a medical device in the private system when compared to the public system and prostheses prices in the Australian private hospital setting are amongst the highest in the world," said Mr Rogers.
"A private hospital in London pays $AU27,000 for a St Jude Medical pacemaker. The same device in Australia is listed at $52,000 – meaning a 93% mark-up."
Mr Rogers said prostheses account for more than 13 per cent (around $2.1 billion) of total benefits paid for hospital cover in Australia. He said this represented a "material cost to private health insurers" and remains one of the key factors in the cost of premiums.
"We need greater action on protheses reform which would relieve a lot of pressure on our health system and ultimately our customers," he said.
The Medibank CFO said more needs to be done to encourage younger Australians into private health insurance.
One suggestion is a fringe benefits tax exemption for employers that provide private health insurance to their employees.
"Our world class health system is one that needs to be maintained for future generations," he said. "But there is a big job ahead for all of us to ensure that the quality and affordability of the system is to be maintained for future generations."