ABC Radio Perth interview with Dr Rachel David on the PHI reform

Station: ABC Radio Perth
Program: Drive
Date: 12/10/2017
Time: 5:06 PM
Compere: Belinda Varischetti
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


BELINDA VARISCHETTI: As I was just telling you there is a big shakeup in the private health insurance industry. The ABC has learnt the Federal Government is set to unveil the biggest overhaul of private health insurance in decades. And there’s no doubt the industry is under a lot of pressure. And if we look at these figures more than 10,000 Australians dumping their policies each month. Is that you? And what do you think the Government should do, what measures do you think the Government could implement to get you back in, to make you think about it and maybe if you have dumped a policy to bring it back in? What would get you over the line again? Can you let me know? 1300 222 720 to call through, the text 043 7922 720.

Dr Rachel David is from the Private Healthcare Australia with you this afternoon. And Dr David this must feel like Christmas.

RACHEL DAVID: Look, we’ve worked very hard with the Federal Government over the last two years on how we can address the key consumer concerns about private health insurance. Private health insurance is pretty important in Australia. It funds two-thirds of the elective or non-emergency surgery that takes place in Australia and over half the mental health admissions to hospital, so we need to be careful that the system remains sustainable and is there for people that have it when they need it. So look we have been able to make some inroads into the key concerns that people have, particularly around the affordability of premiums and that the perception that private health insurance is value for money.
BELINDA VARISCHETTI: Now one of the measures the Federal Government is doing is to entice more young people to take up private health insurance, what’s the plan, how are they going to do that?
RACHEL DAVID: Look we’re recognising through the research that we’ve done – and over the last year or so we’ve talked over 16,000 consumers – and one thing that’s really clear is that there is pent-up demand for private health insurance for people aged under 30, there are people out there that don’t have it but want it but there is just too much financial pressure on people at this point at that time in their life – and we’re talking housing affordability and issues about paying for education, energy costs and other bills. So to make this affordable we’ve decided to introduce an additional discount on the premium, up to 10 per cent at two per cent per year for people aged under 30, as a way of making it easier for them to take that first step.
BELINDA VARISCHETTI: And do you think that’s going to work  – considering all the financial pressures that you’ve just listed – is that enough incentive to get young people under 30 to sign up with that 10 per cent- up to 10 per cent discount?
RACHEL DAVID: Look there is some pretty key reasons why people in that age group do want and need private health insurance. A number of the conditions to which people in their 20s are most susceptible, for example mental health conditions like eating disorders and chronic depression, in the injury space – walking injuries that might prevent people from driving or doing their day job, and dental work, all of these things are really difficult to get admitted to a public hospital to get treated. So in fact when we actually ask younger people there are people who are aware that they need private health insurance but to be able to take that first step is really difficult given the other pressures. So this along with the other measures in the package that we’ve talked about like reducing the prices of medical devices to reduce the pressure, the upward pressure on premiums, together I think it really will have an incentive for more people to make that choice.
BELINDA VARISCHETTI: Eleven past five, ABC Radio Perth. Dr Rachel David from Private Healthcare Australia with you this afternoon going through some of the details in this huge shakeup to the private health insurance industry that the Federal Government is set to unveil and really thinking that something needed to be done with so many of you deciding to dump your policies. If you look at the figures, 10,000 Australians dumping their policies each month. 1300 222 720 – what incentive would it take to get you to get into private health again? Perhaps you’re someone who’s dumped it in the past. What would it take, what are you looking for there to bring you back? 1300 222 720 to call through, the text 043 7922 720.

Dr David, How important was it to get that boost to mental health benefits in this shakeup – was that one of the key points that needed to be included here?

RACHEL DAVID: Well look I think this again goes to the [indistinct] participation of younger people. One of the issues about mental illness is that the first time it tends to strike is when people are in their late teens and in their 20s and it’s not an easy thing to rate your own risk for. You know if you asked anyone in their 20s in Australia do you think you have a good chance of being admitted to hospital with a mental health condition, they’re likely to say no. So what we’ve done as part of the classification system that we’ve looked at with the Government called gold, silver, bronze, where we’ll be classifying health fund products, is that for people who have selected a lower cost or an entry level product – and mostly that’s younger people who are struggling with other costs, they get a product that is lower cost that doesn’t cover so many things – if they are unexpectedly admitted to hospital with a mental health condition they get the chance to upgrade at that point and up to a policy that covers mental health and then their full admission will be covered and future admissions. Because the problem is if they’re on a low cost policy they’re likely to have very big co-payments as the result of going into hospital and we want to remove that risk in what we’re calling the mental health safety net.
BELINDA VARISCHETTI: This just through from Bruce who says: young folks traditionally don’t claim much on health insurance. My daughter just laughed and said a mere 10 per cent of a truckload of money still leaves a lot to pay. Do you think you’re going to hear a lot of that coming through?
RACHEL DAVID: Well look I think that people will always have financial challenges. I mean no one likes paying for insurance of any kind. And maybe it’s up to us to better explain some of the things that actually can happen. And I mean I did train as a doctor, I worked in the public hospital system for many years and one of the toughest things in that system was to have to tell people, look, you do need treatment but you’re going to have to wait a year or yes, you’ve been diagnosed with an ailing disorder, we don’t treat that here because we’re looking after serio- you know, people who are danger to themselves and others. And that was a conversation that I had again and again and it’s so- explaining to people that look if you do get your teeth knocked out in a sporting accident, if you do end up – you know, fingers crossed that this doesn’t happen to people – but if you do end up with a condition that means that, you know, you have an eating disorder that means that you can’t work or you have a sporting accident, a skiing accident and you can’t drive your car, I mean would you be able to afford that? And these are the things that we better need to explain to people  that occurs not just once in a while but actually pretty commonly.
BELINDA VARISCHETTI: Dr David, thank you for that. Dr Rachel David is from Private Healthcare Australia. Just going through some of the changes that are going to be unveiled by the Federal Government, one of the biggest overhauls to private health insurance in decades. One of the key planks of that with young Australians going to be offered discounted private health insurance policies under this big shakeup. What do you make of it? What changes would you like to see to maybe get you interested in private health insurance? 1300 222 720 to call through
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