Transcript
Station: ABC News 24
Program: ABC News
Date: 10/02/2017
Time: 1:40 PM
Compere: Newsreader
Program: ABC News
Date: 10/02/2017
Time: 1:40 PM
Compere: Newsreader
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia
| NEWSREADER: | For more on this now, Dr Rachel David is the chief executive of Private Health Care Australia and she joins me now in the studio. Dr David, thank you for your time. CHOICE is suggesting that people go and look directly at their cover and perhaps assess, one of the suggestions was, if you don’t need it, drop it. What’s your response to that? |
| RACHEL DAVID: | Look, I do think people do need to carefully assess that the product they have meets their particular life stage. We wouldn’t want to see older people covered for pregnancy or younger people covered for the diseases of old age, but people need to think long and hard before they drop their cover. Conditions like an unexpected mental health episode in a young person could cost them over $20,000 out of their own pocket, and for things like certain addiction issues or eating disorders, there might not even be a bed available in a public hospital, let alone a waiting list. |
| NEWSREADER: | So what are the reasons behind this 4.8 per cent increase? |
| RACHEL DAVID: | Look, for many years health care costs or health inflation has been galloping ahead at way, way more than the CPI. Now, we know that’s a problem for families. Household incomes have not increased like they used to, and so health inflation galloping away at between six and eight per cent every year is a real issue for families. Now, because of that, health funds have got together with the Federal Government and worked on ways to remove every dollar of waste from the system and every piece of out-dated regulation that is putting upward pressure on premiums to help keep premiums down. So we have been able to deliver the lowest increase in a decade. |
| NEWSREADER: | You mentioned that you have been working with the Government to get rid of every dollar of waste; what about every dollar of excess? We hear that the cost of some medical devices is exorbitantly high. Some would also argue that the wages that doctors earn is also relatively high. |
| RACHEL DAVID: | Look, we’re looking at all of those things. Australian private patients pay between two and five times more than the public system or other countries with comparable economies. The price of medical devices like hips and knees in the Australian private sector is exorbitant, and the Government has already started a process with us and other stakeholders to start to deflate those and bring those down to realistic levels. We have already been able to pass some of those savings on in a lower premium increase this year, but we need to do a lot more. Hospital accommodation costs, including wages, also grow very steeply every year – 6 to 7 per cent – and that is due to the wages of doctors and nurses. But perhaps more importantly, this is a function of the fact that people are living a lot longer, they have a number of chronic conditions that mean they need to go to hospital more often, and because of that we need to make sure the care they are getting is appropriate and not wasteful in any way. |
| NEWSREADER: | The unavoidable fact out of all this is that this price rise today will push some people out of the private health system because they simply do not have enough money to afford the excess $200 a year for a family or $100 for a single. What sort of ramifications do you see that having on the health sector? |
| RACHEL DAVID: | Well look, at the moment private health insurance and the private sector is covering about two-thirds of non-emergency surgery. That’s things like hip and knee replacements, cataract surgery, things to do with ear infections, women’s health. All up, about two-thirds of those non-emergency procedures are covered by private health, well over half of mental health admissions are covered by private health. And over 50 per cent of the benefits we pay for extras cover are paid out for dental health. So we have repeatedly seen data which shows that health fund members have better dental health than the average population. So when you look at all of that, and if private health was no longer there, that’s an enormous burden that would go onto the public hospital waiting lists. And I have already mentioned a couple of conditions, eating disorders for example, where it could be really hard to find a place at all in the public system to get treated. And we know from our data and the AIHW that public hospital waiting times for common procedures have more than doubled since the beginning of the century. |
| NEWSREADER: | Have payouts reduced for some private health care offers? |
| RACHEL DAVID: | No, we are in fact paying out $19 billion in claims at the moment, which is a record level of claims. There have been some media reports that claims for extras have reduced. That is absolutely not true. Health funds pay 3.9 per cent extra for extras cover issues like dental health, physiotherapy and chiro last year. |
| NEWSREADER: | So you mentioned some of the areas where you and the Government are working on delivering more value and cutting the costs. What will be, I guess, your – there’s no silver bullet – but what will be the first line of attack? |
| RACHEL DAVID: | Look, we are working on two fronts. The first is transparency measures for the consumer to help them navigate the system and chose and use their health insurance, so that means a better categorisation of products and ways in which people can understand better what each of the product categories contains. That’s government policy and that will be announced at some time this year. We are also working on addressing a raft of regulations that is putting upward pressure on premiums that are out of date and toxic to the sector. They are regulations forcing up the prices of medical devices, regulations which make it really easy for state governments to chase the private health insurance dollar by talking to patients in the emergency department and getting them to use their health insurance in some cases when it’s not appropriate, and regulations that tie up the system in costly red tape. We’re working on ways with the Government to remove all that so we can keep premiums low. |
| NEWSREADER: | Finally before we go, Dr David, can you guarantee that there won’t be any more price hikes for next year? |
| RACHEL DAVID: | In terms of the health system as a whole, one thing we can guarantee is that health system costs, whether we are talking about public health or private health, will continue to go up. People are living longer and they are requiring more health care to keep them healthy and on their feet. That’s an investment in keeping people productive, and shouldn’t necessarily be considered wasted money. So we are always going to see some level of premium increases but we, as health funds, are going to chase every dollar of waste and every piece of outmoded regulation putting upward pressure on premiums to keep them as low as possible. |
| NEWSREADER: | Okay, Doctor Rachel David from Private Health Care Australia, many thanks for your time today. |
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