6PR Perth Live interview with Dr Rachel David about PHA’s Budget submission 2019-20

Station: 6PR
Program: Perth Live
Date: 30/01/2019
Time: 4:07 PM
Compere: Oliver Peterson
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


OLIVER PETERSON: I’m wondering if you have abandoned your private health insurance – has it become all too expensive for you, you’ve just walked away, you’ve dropped it. Because one thing’s for sure – it’s going up again this year, and it’s probably going up by around 5 per cent. According to Private Healthcare Australia, around 54 per cent of us have private health insurance, that was back in 2018. But the current prediction is that by 2030, or 2035, only 30 per cent of the population will have private health insurance.

Has private health insurance become too expensive for you? Is it just a luxury or has it become unaffordable? 922-11-882.

It’s got a wish list, Private Healthcare Australia, and it is getting on the front foot ahead of the federal Budget. Its chief executive is Dr Rachel David and she joins me on Perth Live this afternoon. Dr David, thank you for your time.

RACHEL DAVID: G’day, Oliver.
OLIVER PETERSON: What is top of the agenda on behalf of Private Healthcare Australia?
RACHEL DAVID: Well, I think we’ve become acutely aware that people have been struggling with health fund premiums as they’ve been going up and we know that people with private health insurance really value the quick access to surgery and mental health care, dental care that it provides. But one thing that we struggle with, as well as the public hospital system, is that health costs in Australia and around the world have been going up every year by over 5 per cent because of the aging population and new technologies.

So, top of our list is that battlers, or people on low and lower middle income earners, have for many years received a rebate on their premiums, but that’s been frozen by the Government now for close to 10 years and we think it’s time to restore that to its original level of 30 per cent on premiums, to give battlers a bit of a hand with their health insurance premiums, because these people are contributing to their own healthcare and if they drop out, the impact and the amount that would be needed to pay for their care in a public hospital is far greater than would actually be spent by the Government on actually restoring the rebate.

OLIVER PETERSON: 922-11-882 the talkback number – if the Government was to listen to Private Healthcare Australia and restore the private health insurance rebate from – I believe Dr Rachel David will inform us in just a moment – from 25 per cent to 30 per cent, would that entice you back to private health cover? Is that what it is, 25 per cent now?
RACHEL DAVID: Yeah, look, it’s declined to 25 per cent over time. Originally, it was 30 per cent when it was introduced back in 1999. It’s means-tested – it is only available to people who are struggling in many ways to afford household costs, but we think it should be put back up to 30 per cent and the Government, in addition, needs to work with us and really look at some of the costs driving up premiums and reduce some of the more wasteful things that occur in the sector so that we can do both – we can help people meet the cost of their premiums, reduce waste in the sector, and thereby make premiums more affordable for low and middle income earning Australians.
OLIVER PETERSON: Alright. What about the Medicare Benefits Schedule? Is there anything that could be taken off that?
RACHEL DAVID: Well look, we know there is. There are a number of procedures that have been identified by both the Government’s MBS review and by a global collaboration of experts called Choosing Wisely that we know probably do more harm than good, and unfortunately some of them still occur in Australia. We’ve gone to some lengths to research this with the University of Sydney and other experts. And we have recommended that more action is taken to reduce those and reinvest that taxpayers and health fund members fund in treatment that really works.
OLIVER PETERSON: Alright. I know it became quite confusing. We tried to have what this gold, silver, and bronze level of private health cover to really simplify the process, and eventually try and entice more people to either take it up, or at least they could understand what they were getting coverage for. Do you think that’s happened though? Because as your predictions are at the moment, 54 per cent of Australians have private health cover. It’ll drop to 30 per cent by 2030, 2035. So has it become a little more simple for customers to navigate, or are they still confused by all of the packages and offers out there?
RACHEL DAVID: Well, look, that system hasn’t started yet. It’s due to start completely by 1 April, although some people will already be receiving letters from their health fund to inform them about what tier their product is in and whether it’s likely to change or not. I think this will be an improvement. It will help people, firstly, understand what product they’ve got, and whether it’s suitable for their health status and life stage. And secondly, if people are choosing products for the first time, it will help them choose the right ones, so they’re not paying for [indistinct] of things that really they- for conditions that really they’re never going to experience. And I think that this will actually be a very helpful system.
OLIVER PETERSON: Will you be eventually able to just opt in and opt out of the coverage you want? Are there always going to be packages. I might not need a knee replacement, but if I took the gold standard of coverage, that would be included in my level of health insurance?
RACHEL DAVID: Look, there are always going to be packages of care because we have a system in Australia called community rating, which means that for health insurance, as opposed to other forms of insurance, the health fund can’t deny someone coverage, or put their premiums up if they’re already sick, or if they’re susceptible to a medical condition. So because of community rating, we need to fund a broad range of people for a broad range of treatments. Otherwise, the system breaks down; it doesn’t work and premiums become very expensive.
OLIVER PETERSON: Alright. But when we’re talking about some of those items, and then let’s go back to the Medicare benefit scheme for a moment, maybe if they’re wasteful as you’ve said, they’re low value- what are you talking about here, is it items that are not helpful, or are they items that people just simply don’t use very often?
RACHEL DAVID: No. They’re things that in some cases occur quite frequently, but they’re things where the actual cost of the procedure is greater than any benefit it provides. So there are few things that are on that list?
RACHEL DAVID: One thing was arthroscopy, or stitching a little tube in a camera into the knee to look for, or do a minor procedure in people that had arthritis. That’s known- for people that are older, that’s known to be of no value. So we can quite effectively move away from that and use simply a clinical diagnosis or a medical examination to treat that- to diagnose and treat that condition.
OLIVER PETERSON: Oh well then people will say: I need private health insurance. And they sign up.
RACHEL DAVID: Well, that will help reduce some of the unnecessary costs of the premium, and it also will mean that health funds can reinvest in members funds and things that where we do know are helpful. And things like extra options for dental care, preventive care – the list goes on.
OLIVER PETERSON: Yeah. And there’ll certainly be demand on health care, we know that, particularly preventative health care. Dr Rachel David, will be interesting, particularly in the lead up to the election. And you’re getting to the front foot here ahead of the budget this year. Appreciate your time on Perth Live.
RACHEL DAVID: Thanks, Oliver.
OLIVER PETERSON: Chief Executive of Private Health Care Australia.
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