“No amount of political posturing is going to change the fact that Australians are each year spending somewhere between 5% to 6% more on their healthcare and that we’re simply running out of taxpayers relative to our retired to fund the Government’s massive share of the costs," says nib CEO Mark Fitzgibbon.
The company described Labor's controversial proposed two per cent cap on premium increases for two years as "clearly a threat to stability and orderly system improvement."
Announcing the company's first half result, Mr Fitzgibbon said evidence of the issues can be seen in the increasing reliance of public hospitals on funding from private health insurers, with payments of more than $1.5 billion to state governments in calendar year 2017.
“That means about 6.5 cents in every dollar we collected in premiums effectively went to State governments," he said. "And hopefully, the community has noticed the quarrel currently going on between the Commonwealth and States over the Commonwealth’s share of public hospital funding. The States are all arguing the Commonwealth paying them an additional 6.5% every year isn’t enough!”
Recently negotiated public hospital funding agreements between the federal and some state governments include specific measures designed to resolve the practice of states 'harvesting' privately insured patients through their accident and emergency wards.
Under the agreements, governments will, "...develop reform initiatives to improve admission policy and practices to support patient choice, and to deliver comprehensive data provision and more consistent financial reporting on private patients."
Mr Fitzgibbon said the best protection for consumers on affordability relies on transparency, robust competition and less regulation at every step in the healthcare supply chain. He said it was largely treatment volume growth driving spending in both the public and private healthcare systems.
nib announced an 8.9 per cent increase in group revenue to $1.1 billion for the six months to the end of December. Its Australian health insurance business reported a 9.1 per cent rise in revenue, to $905.6 million, accounting for 83.6 per cent of the company's total revenue for the period.
Benefit outlays of $752.5 million was up 9.7 per cent of the corresponding period in 2017. The company said the integration of specialist business-to-business private health insurer GU Health, which was in October last year, is going to plan. It contributed $28.4 million in revenue for the final two months of 2017.
It also said that, while sales and market conditions remain tough, nib has accounted for over one-third (35.6 per cent) of industry growth.