MTAA: Insurance industry's latest attack on health 'defamatory and a new low'

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The CEO of the Medical Technology Association of Australia (MTAA), Ian Burgess, responds to a recent opinion piece from Private Healthcare Australia.

In a recent article published in HealthDispatch, big corporate insurers, through their mouthpiece, Private Healthcare Australia (PHA), disgracefully attacked the character and professionalism of every single dedicated and hardworking front-line medical technology (MedTech) worker, in-theatre technician and innovator – another new low from insurers.

To the doctors, hospital staff and, principally, our great MedTech community, you should continue to hold your heads up high and be proud to work in an industry that is responsible for saving the lives of thousands of Australians each year, not just during the pandemic. Without you Australia’s world-leading health system wouldn’t be what it is today. Keep up your outstanding work for Australians.

It’s sad to see the multi-billion dollar corporate insurance lobby - funded by its members including HCF, Medibank Private, BUPA and NIB - defending an industry in the grip of crisis by attacking doctors, hospital staff, consumer groups and MedTech workers with a steady stream of misinformation, media spin and gaslighting.

The fact is, rather than coming to the table with positive and constructive suggestions to reform Australia’s private health system to deliver for consumers, these big corporate insurers are far more interested in controlling and restricting surgeon and patient choices, lining their own pockets and blaming everyone else for rising premiums.

While thousands of their customers continue to question the value they’re getting from their private health insurance, the insurance industry responds by attacking the integrity of doctors, threatening hospitals, scaring consumers and blaming the medical technology community.

MTAA and the MedTech community believes the insurance industry has crossed the line with its disgraceful public statements about the men and women working in our community. These are the same men and women who, when the pandemic hit, put aside their own interests to support the Australian Government’s response to COVID-19. It was the MedTech community that secured more than 7,500 ventilators, sourced COVID testing kits and provided the vitally needed personal protective equipment for Australia’s front-line health workers and sick patients.

All the while the corporate insurers have profiteered during the pandemic by charging struggling Australians for services they weren’t receiving. The latest APRA data shows that they have pocketed more than $1.8 billion which they are yet to give back to consumers.

Insurers' big lie

To listen to the big corporate insurers you would think industry has no plan for reform. The simple fact is MTAA is the only group that has put forward a clear plan to make medical devices more affordable. Our plan maintains the patient access and doctor choice guarantee of the Prostheses List, while reforming benefit levels to save the insurers more than $750 million in costs over four years. While we’re working to support clinicians, hospitals and consumers, corporate insurers continue to gaslight the government with outlandish and exaggerated claims that misrepresent reality.

The big corporate insurance lobby persists in falsely claiming that the cost of medical devices are the reason they’re hiking up premiums on consumers at twice the rate of inflation. But here are the facts:

  1. Medical devices only account for approximately 9 per cent of the total benefits paid by insurers;
  2. The average benefit per medical device insurers are currently paying is 14 per cent less than four years ago; and,
  3. The latest data from the Australian Prudential Regulatory Authority (APRA) shows that in the last year, insurers paid 5 per cent less in total for medical devices.

These declining medical device costs come despite more patients in the system, an increase in chronic disease, and an ageing population. Reductions in medical device prices have provided the corporate insurance industry savings of $1.2 billion over the last four years, which they are yet to pass on to consumers.

Insurers’ continued campaign to mislead Australians about their rising premiums has hidden their real agenda: the introduction of a managed healthcare system in Australia. A system where insurers can overrule doctors and restrict patients from accessing life-saving therapies and medical devices. This is the real issue that every single Australian patient should be worried about. In an attempt to protect their profits, these big corporate insurers want to be the ones who determine your treatment. Whereas we know there is only one person a patient should trust with their care – their doctor.

Insurers prioritise profits and perks over patients

According to data provided by APRA, between 2014-15 and 2019-20, corporate insurers increased their ‘management expenses’ from $1,775 million to $2,396 million – a whopping total increase of over $600 million.

One prime example of this can be seen by reviewing Medibank’s Annual Reports, which show that in 2015 Medibank had seven board members receiving more than $1,000,000 in fees, in total. By 2020, there were eight members receiving $1,976,000 in total fees. This equates to a remuneration boost for each board member of 9.5 per cent per year. Compare that to the meagre 1.5 per cent of average wage growth many of their customers experienced over the past 12 months.

So, what does this mean? Well, an analysis done by Australian Health Policy Analyst, Charles Maskell-Knight, determined that if corporate health insurers’ ‘management expenses’ had increased between 2014-15 and 2019-20 at the same low rate as total expenditure on prostheses (2.1%), insurers would have only spent $1,967 million on management fees and executive salaries in the last year, instead of the $2,396 million they did spend.

In short, this would have meant a saving of $429 million or about two per cent of total premium costs that should have been passed on to consumers.

FACT: Insurers’ ‘management fees’ are skyrocketing and they now spend more on themselves than medical devices

Reforming private health insurance should be about delivering the best health outcomes for patients by ensuring they maintain access to life-improving and life-saving medical technology, not attacking the health workers who are saving lives.