2UE Afternoon (Weekend) – New System of Ranking Private Health Insurance Policies

Station: 2UE
Program: Afternoon (Weekend)
Date: 12th June 2016
Time: 12:25 PM
Compere: Clinton Maynard
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia
CLINTON MAYNARD: We’ll talk to Rachel David, who’s from the Private Healthcare Australia organisation.

Dr David, thanks for your time.

RACHEL DAVID: Oh, thank you very much.
CLINTON MAYNARD: This seems like it is an effort to try to clean up, which is a very complicated system. I know it’s only been announced today but what’s your take on it?
RACHEL DAVID: Look, Australia’s health funds are really encouraged by the Coalition’s desire to reform private health insurance to make it more accessible for consumers. The announcement today, we are prepared as an industry to put a significant investment behind co-developing policy in this area so that we can get the policy settings right to help consumers choose and use their health insurance.
CLINTON MAYNARD: So, what this would mean; there’s something like 40,000 private health insurance policies, or products, out there. Products would be divided into three categories: gold, silver, or bronze. From your understanding, how will that work, Rachel?
RACHEL DAVID: Look, one of the reasons why products have proliferated in that way is to do with some of the regulations around private health insurance that means, for instance, that different products with different terminology need to be offered in different states. So, that kind of thing, we can begin to look at those regulations and how we simplify them.

In terms of the categories, what that relates to is the fact that some lower-cost health fund products have exclusions and they’re targeted to young people whose risk of being admitted to hospital is quite low compared to older people so they pay a lower premium.

What we need to do is to work with the Government- regulators to makes sure that what’s an exclusion for one fund is described in the same way as it is for another fund so we have common medical terminology used between funds.

CLINTON MAYNARD: Because that language often confuses people. When you’re looking at different policies and deciding where to go, the language between the different policies can be pretty complicated.
RACHEL DAVID: Absolutely, that’s right. And there’s no standard at the moment to make that language uniform which describes what is in and out of a particular policy. So we’re very keen to work on that with the Government, we acknowledge that consumers have difficulty finding products that are right for them and we believe that this can only enhance the value of private health insurance in Australia.
CLINTON MAYNARD: The bugbear for mine, Rachel, has been the complications surrounding not knowing when you go to hospital or you’re seeking treatment what you’re going to be out of pocket for. Is this going to clear that up?
RACHEL DAVID: Look, we are doing some substantial work on this issue as well. The bit- the issue here is that for historical reasons, health funds cannot control what a doctor charges out of pocket, unless it enters- unless health funds enter into a specific arrangement with an individual doctor to cover the gap, so that there is- unless the doctor gives informed financial consent, or discusses their fees with the patient in advance, it’s very hard for the patient to fully understand what bills they’re going to get.
RACHEL DAVID: We are working very closely with other participants in the sector – hospitals and doctors – to help the general practitioner when they refer a patient to a specialist, to be able to navigate between specialists based on what they charge and the sort of work that they do. We think this is very important and the type of work that the Government is looking at will enhance that process as well.
CLINTON MAYNARD: So, can a private insurance company, can they actually direct or recommend to their customers, their patients, their members, go to this particular doctor or this particular specialist or this hospital because they are signed up to our agreement so there won’t be a gap?
RACHEL DAVID: Look, a number of funds do publish details of doctors that are offering no gaps treatment but it’s very much up to the individual fund at the moment. Introducing that transparency across the whole system is another stage of work but I think it’s very uppermost on the agenda of the Government, consumer groups, and our industry to ensure that that happens.
CLINTON MAYNARD: So, many of our listeners have been in this situation, but I’ve been in the situation of requiring emergency treatment in a public hospital being asked did I want to enter as a public or private patient. And you’re put on the spot there, you’re in a difficult situation because you’ve got an emergency on your hands, and my immediate reaction was, oh put me as a public patient because I’m worried about a potential gap or out of pocket expenses.
RACHEL DAVID: Look, I think in that situation what people need to realise is the choice is absolutely yours. If you’re an Australian citizen, you’re covered by Medicare and you’re entitled to treatment free of out of pockets in the public hospital system, whether it’s an emergency or not.

So, if you are asked to make that choice you need to bear that in mind. If you do choose to go private under those circumstances, you will be able to get your choice of doctor and that means that, you know, in a big teaching hospital that means that your doctor will be fully trained in that speciality; they’re not always if you go in as a public patient.

But under those circumstances, the hospital absolutely needs to provide you with informed financial consent. So if you elect to go private, with your choice of doctor, they need to tell you up front whether there will be out of pocket costs.

CLINTON MAYNARD: So, is your understanding of this gold, silver, bronze system it’s not as simple as, okay, if you sign up to a gold premium package it’s going to be more expensive but you’re covered for everything; it’s not that simple?
RACHEL DAVID: Look, it’s what we will need to do is ensure that any exclusions are described in a common way between funds. But, yes, there will be a top tier of cover similar to top hospital cover now.

But we need to remember that medical out of pocket costs are not determined by the health funds, they’re determined by the doctor. So in terms of knowing what your out of pockets will be, what we can do is work with doctors to help patients navigate that system but we can’t control those costs directly.

CLINTON MAYNARD: Thanks for your time today, Rachel. Interesting information.
RACHEL DAVID: It’s my pleasure.
* * END * *