'Reform needed to support clearing of elective surgery backlog'

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Private Healthcare Australia CEO Dr Rachel David says Australians are taking out private health insurance in record numbers to avoid catastrophic delays in essential non-emergency surgery.

The COVID-19 pandemic has demonstrated it is critical Australians have affordable and accessible healthcare.

More Australians than ever before have realised the value of private health insurance and now a record 14.116 million Australians have private health cover.

The latest report from the Australian Prudential Regulation Authority (APRA) shows there have been six consecutive quarters of growth in membership with record growth in both hospital and general treatment policies.

Private health insurance is the most effective way to clear the backlog of surgery and take pressure off the public hospital system.

Yet unless our national policymakers commit to dealing with rapidly rising costs in our private hospitals, our public health system remains at risk.

According to APRA data, over the last two years, generic medical devices used in surgery were the single biggest rising cost in private hospitals, and therefore the most significant driver of private health insurance premium increases.

In the year to December 2021, compared to the year to December 2019, benefits expenditure for medical devices in hospitals increased by 3.8 per cent compared to a 3.0 per cent increase in medical services benefits and a 2.6 per cent increase for hospital accommodation benefits.

In Australia, it costs between 30 and 100 per cent more for the same generic medical devices used in hip replacements, knee replacements or pacemakers, compared to the UK and New Zealand.

A hip replacement stem used in surgery costs more than $4,000 in Australia, while in New Zealand and the United Kingdom, it costs $1,800.

The 2021 Federal Budget included a commitment to start slowly reducing the cost of overpriced medical devices in Australia, saving consumers tens of millions of dollars and reducing the cost of living pressures on families.

This promise should be implemented now before demand for essential non-emergency surgery starts to escalate again.

With the cost of living now a major issue for most Australians, it is time for the Government to get serious about the affordability of healthcare. In addition to reforming medical device pricing, it is time to restore the PHI rebate to 30 per cent (it is currently less than 25 per cent) for battlers.

Australian retirees and working mums with children are all relying on their private health insurance for timely access to healthcare. The government has an obligation to do the right thing by them and introduce reforms to reduce costs wherever possible.

Health funds are doing everything in their power to keep PHI affordable in spite of an ageing population and inflationary cost pressures driven by inappropriate pricing of medical devices.

Last year they delivered the lowest average premium increase in 21 years at 2.7 per cent. Many funds have deferred the premium increase and are progressively returning any savings accumulated as a result of COVID lockdowns to their members.

The upcoming federal election is an opportunity for both the Coalition and Labor to give iron-clad commitments to reform medical device pricing and restore the rebate to ensure private health insurance remains affordable for the working mums with kids and retirees who choose to have it for security and peace of mind.