The Federal Government’s blueprint for Australia’s health care system currently lacks clarity, let alone consensus. There is a lack of vision and direction, but not of reviews. The Medicare Benefits Schedule (MBS) Review and the Primary Care Review have been joined by a review of the private health insurance sector. These reviews are set […]
The Federal Government’s blueprint for Australia’s health care system currently lacks clarity, let alone consensus. There is a lack of vision and direction, but not of reviews.
The Medicare Benefits Schedule (MBS) Review and the Primary Care Review have been joined by a review of the private health insurance sector.
These reviews are set against the backdrop of reform of the Federal and State health funding arrangements. And in the midst of these reviews is a debate about tax reform, including a potential 15% GST on health.
Without a coherent long-term vision for our health care system, this is a recipe for uncertainty and misadventure.
The private health insurance review is needed. A strong private insurance sector, which supports our public health system, is vital to our health care system.
Affordability of premiums, a driver of the review, is important to maintain high rates of private health insurance.
The challenge is to ensure that the value of insurance is not the casualty of more affordable premiums.
The interrelationship between the MBS and private health insurance is complex, which leaves people with insurance wondering why they have out of pocket costs for cancer treatment and other serious conditions.
The core value of private health insurance is patient choice of doctor and timely access to hospital care. It is not availability of alternative therapies of no proven value, gym memberships, or other marketing gimmicks.
It is to insure patients for unexpected medical treatment or surgery at some stage in the future. Recently, some health funds have been actively downgrading their policies.
By removing higher cost procedures from policies, then writing or emailing members to let them know that if they need coverage for those procedures they would need to upgrade their cover, these funds have increased exclusions, reduced their costs, and improved their bottom lines.
One of my patients who knew she would likely require cervical spine surgery presented to emergency only to find that her fund had downgraded her policy and she was no longer covered.
She was unaware of the downgrade, even though she had received a loyalty bonus of discount theme park tickets from the same fund.
The health funds have also been involved in tense negotiations with private hospitals over contracts, with some funds, led by Medibank Private, looking to not pay for treatments and procedures that may involve up to 165 so-called preventable events.
Is it no wonder that complaints to the health ombudsman are at an all time high, and that the largest source of complaints is patients who do not understand their policies and are unaware of their exclusions?
The review of the private health insurance system must ensure that junk policies, such as those that are aimed only at avoiding the Medicare surcharge, are a thing of the past.
The best example of junk policies are those that provide cover for being a private patient only in a public hospital. Despite the rhetoric, the costs of private health insurance premiums are not driven by doctors or their fees, which represent a relatively small amount of expenditure (15%).
Rather, the highest costs are incurred through hospital costs (70%). While the AMA has concerns that the MBS Review will be a cost cutt ing measure, and may inappropriately restrict services to patients, savings to Medicare will also result in signifi cant savings to private health insurers.
Whatever our health care system looks like in 10 years, it should be a system that builds on its strong foundations.
The AMA welcomes Health Minister Sussan Ley’s public commitment to protect general practice, and her denial that a US-style managed care system is in the wings.
This is important, as some private health insurers have stated that they would like to import the US managed care system here.
On this basis, we are concerned that the government’s private health survey raises the prospect of risk stratifi cation by adjusting premiums based on smoking or other patient characteristics, just like in the US.
When it comes to private health insurance, ensuring that everyone has access to health insurance, without risk stratification and premiums based on pre-existing conditions or physical characteristics, is a key foundation of our health care system.
We have taken many of the foundations of our health care system, which has delivered excellent results relatively efficiently, for granted.
They are characteristics that patients in other countries such as the US are fighting hard for.
Australia must be vigilant to protect these foundations.
AMA President Professor Brian Owler
