PHA rejects reform critics as implementation nears

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Private Healthcare Australia chief executive Dr Rachel David has rejected the claim health insurance is "not value for money".

In a radio interview on ABC Sydney, Dr David said research by the sector over two decades has shown more than 80 per cent of people with private health insurance consider it "value for money", particularly in terms of avoiding waiting lists and having doctor of choice.

Dr David said reforms in the process of being implemented, including the categorisation of all private health insurance policies, were not based on "a snap decision or something pushed by the private health insurance industry as we heard earlier as well."

"These reforms were developed based on intensive research over a two and a half-year period and it arose out of a committee of experts and leaders from the private health sector, which included doctors, the people that run private hospitals, public hospitals, consumers, more than one consumer group was involved, aged care, Allied Health and the AMA and medical groups. And in fact, even the CHOICE organisation was involved in some of the input into the consumer information," she said.

Dr David rejected the assertion costs in the private system are rising higher than elsewhere, with costs in the public system rising 6.5 per cent per year compared to this year's average premium increase of 3.25 per cent.

"So that is driven by the fact that over the last hundred years, we've gained an extra 30 years of life and in that 30 years, people are using more services to maintain a good quality of life. And the cost of some of those services has gone up as technology has improved.

"So you know, a few years ago people would've had one hip replacement and then maybe sat on the couch for a couple of years and then that was the end of their life, they passed away. Now, they're having hip replacements, they're going skiing, they're probably still working, they're playing tennis and in ten years time they're having another one.

"A few years ago, if you started to have heart troubles, you may have taken a bit of medication for your heart failure and you would've increasingly gone downhill and maybe passed away in your early 70s. These days, no one dies of heart failure. There are a number of cardiac implants that people can use to basically, tide them through until they pass away from something else in their 80s and 90s."

Dr David continued, "In Australia, we have amazing outcomes from our healthcare system. But it does come at a price and increasingly as we have this demographic change and technology change that the economy is still coming to grips with, both the tax system and the private health system is still evolving as to how we deal with that."