5AA Mornings program interview with Dr Rachel David on health funds returning additional savings to members

Station: 5AA
Program: Mornings
Date: 8/04/2020
Time: 11:08 AM
Compere: Leon Byner
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


LEON BYNER: Now, the private health insurance companies already said: look, we’re not going to – because of COVID-19 – we’re not going to put your rates up later on – which they were going to do, which I think a lot of people said that’s good, that’s good. But of course, the private hospitals decided to stop elective surgery and then there was also the issue that if you’ve got membership for these private funds there could well be a lot of things like glasses and other things to which you would be entitled. But of course, some of the operators of these services have shut for reasons you would understand. So what I thought I’d do today – and this is really a good news story – so I love bringing you good news. I really do.

So let’s talk to the CEO of Private Healthcare Australia, Dr Rachel David. Rachel thanks for joining us today.

RACHEL DAVID: Pleasure, Leon.
LEON BYNER: So tell us- first of all, you’d said: right, no rate increases that were coming. What’s happened now since when we’ve seen that there’s no elective surgery, and indeed many of those extra services for which you pay your premium – they’re not available because frankly the shops have, for safety reasons, shut.
RACHEL DAVID: Well, that’s exactly right. And what we’ve always been clear about is health funds will not profiteer out of this crisis. So if it looks like we are accumulating unexpected profits as a result of a slowdown in elective surgery, we’re going to have a look at that and work out a way to pay that back to our members.

Now, we’re not exactly sure how that’s going to happen yet. We’re viewing the situation on a month by month basis, but we’ve been- we want to be very clear that if it does look like we’re accumulating excess profits, we will either pay members that through a reduction in the premium or as a rebate.

And just to be clear on the other point, I mean, we are still seeing some urgent elective surgery going ahead – it’s about 43 per cent of what we normally do, but that still can add up to big dollars if this crisis continues for more than a couple of months. And we want to make sure that our members are looked after.

LEON BYNER: So how long before the health funds make a decision as to what their income is according to what cannot be used by the members who pay the premium?
RACHEL DAVID: We’re going to review it on a month by month basis with our regulators, and as soon as we know and as soon as they’ve got the data we will look at that retrospectively – and at that point make a decision.
LEON BYNER: All right. So that- might it be a substantial amount? Do you know?
RACHEL DAVID: Look, we just don’t know yet, Leon – there are so many things that need to be factored in. The other thing is we need to take a little bit back, not much, but a little bit back because we are expecting a very big backlog of surgery to build up over the next few months. And that’s not just in the private sector – we’re expecting a blow out in public hospital waiting lists because they haven’t been able to do elective surgery effectively during this time.

So we’re thinking- we’ve had one analyst who’s looked at this and said wait times would flow out to 1.5 years in public for some common elective surgery procedures. So we’re expecting there’ll be a large amount of pent up demand for private elective surgery and so we’re expecting that to factor into the second half of this year. But that being said, we are seriously considering giving rebates to customers if it looks like we’re building up profits we didn’t expect.

LEON BYNER: All right. Another question is so, let me get this right: anybody that’s got private health will not see a premium increase that was being planned – that’s been put aside?
RACHEL DAVID: It’s been put aside.
LEON BYNER: Okay. So that won’t happen for the foreseeable future?
RACHEL DAVID: No, we’ve said that it should be reviewed by ourselves in the department and our regulators in six months as to whether that will be necessary this year.
LEON BYNER: Alright. So in six months time – which what- nearly, not far from Christmas – where we hope we were in a different position by then. So if people have got inquiries about their particular issue you’ve still got call centres that can handle the inquiries – the different people with different funds, whether it’s Bupa, or HCF, or whoever?
RACHEL DAVID: Absolutely. Absolutely. Both small and large funds, we’ve got call centres that are happy to take calls from members, particularly if they’re in financial distress – those people that have lost their job or they’ve had their hours dramatically reduced as a result of the crisis, we want to do what we can to keep those members …
LEON BYNER: [Talks over] Yeah because they want it- they want to be able to continue to be insured, wouldn’t they? Yes.
RACHEL DAVID: Well the thing is, if you drop out you then face a penalty for getting back in. And if you tried to do that later in the year and you needed surgery, there’s- we’ve got this issue of the public hospitals not being able to just turn elective surgery back on – so we are expecting quite a lot of demand at that point. But we want to do everything we can to keep those people in. And every fund that’s a member of PHA had set up a hardship trust to look on a case by case basis of people who may have lost their jobs…
LEON BYNER: [Talks over] So if you’ve got an issue, please call the phone and have a chat with them.
RACHEL DAVID: Yeah – before you consider dropping your health insurance which, at this time, would be the worst thing to do knowing the crisis we’re about to face with waiting lists – please contact your phone first and have a chat about it.
LEON BYNER: Rachel, thank you for joining us. That’s Dr Rachel David, CEO of Private Healthcare Australia speaking on behalf of the private healthcare funds.
* * END * *