ABC News interview with Dr Rachel David regarding Roy Morgan survey

Station: ABC News
Program: ABC News
Date: 17/05/2018
Time: 10:54 AM
Compere: Newsreader
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


COMPERE: A new survey shows more than a quarter of a million people ditched their private health insurance in the past year. Not surprisingly, ever increasing costs are the main reason. The latest premium increase of almost four per cent means policy holders have been hit with a massive 70 per cent cumulative rise since 2008. Rachel David is the chief executive of the peak body, Private Healthcare Australia. She joins us now.

Thanks for your time.

RACHEL DAVID: Morning Kate.
COMPERE: So, this is pretty marked result, isn’t it? What are the main issues here? Rising premiums and out-of-pocket costs?
RACHEL DAVID: Look, Kate, I think the first thing that I need to say is these survey results are, based on APRA data released today, completely wrong, and that’s what we often see when data is drawn from surveys rather than people’s real behaviour. The actual number of people who dropped their private health insurance in the last year is an order of magnitude lower: about 36,700 people, rather than the 250,000 that was reported. And the reason for that is that people often say things in surveys but don’t follow through. But in spite of that, the issues that have been raised about rising premiums and out-of-pocket costs are very real issues for people which we’re trying to address.
COMPERE: So, it’s still- you are trying to address them, but this has been talked about for a long time now, and yes, I take your point – if that’s correct – that this number is a lot less than the report shows. But still, people are leaving. What can you do?
RACHEL DAVID: Premiums are rising for one reason only, and that’s because health funds are paying for more healthcare. A lot of that is due to an ageing population that is using the system more frequently to access things like surgery and procedures like lens replacements as people get older. But there’s also a big increase in services used by younger people as well, particularly admissions to hospital for mental health treatment.

Now, a 3.9 per cent rise was one of the lowest that we’ve had in the last two decades. That was the premium increase last year. That is markedly less than the increase in costs in the public system, but the issue is that people get that very direct price signal every year when the minister announces the premium increases, so it does increase concern.

Some of the things we’ve done to help reduce premiums are work with the Government to reduce the inflated cost of medical devices. We’re working on better ways to work with the Government and share information so we can address fraud and compliance, which also will help reduce premiums, as well as addressing low-value care and care that’s occurring in the wrong setting, which are a couple of the things that pushed premiums up.

COMPERE: And Rachel David, I suppose the other thing too is when these premiums are rising – as you say, this year’s rise was the lowest – but people’s wages aren’t going up. So, there’s obviously people thinking: well, our wages aren’t going up, we’re not getting value for money with this private health insurance.
RACHEL DAVID: I think the concern about flat wages growth is absolutely legitimate, and there are some costs in the economy that are continuing to rise above wages growth, and health costs are one of those things. On the issue of value for money, though, that’s a little different, in that of those people that have private health insurance, they are very reluctant to give it up. Eighty per cent of people with private health insurance do value what they’ve got, because for them, it’s the only way they can access treatment for some conditions, and what I mean is the things like eating disorders, chronic mental health conditions, surgeries for people that have had accidents that prevent them from driving or actually doing their work. And treatment for these things is often not available in the public hospital system, which only provides about a third of the planned surgery that gets done in Australia.
COMPERE: Well, Rachel David, it sounds as though you’ve still got a bit of a campaign there to convince people, but thank you very much for your time this morning.
RACHEL DAVID: Thanks Kate.
COMPERE: Rachel David there, the chief executive of the peak body, Private Health Australia, and her reaction to those latest figures on people leaving private health insurance.
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