Interviews and Transcripts

The health funds have done their best in their contracts with private hospitals to keep up with inflation, and including actually paying them in between their normal contractual processes to top up their funding to some extent. But what we can’t have is a situation where we’re faced with a sudden spike in premiums or premium increases because we’ve been asked to bail out a sector without getting the right information first.

Well, look, it’s been getting more and more common for people to draw down on their super early to pay for dental and some medical bills. And look, we think this is turning into a real problem whereby some vulnerable people are getting exploited, and also the release of this money early is actually causing the costs of some of these hard-to-access procedures to inflate. We’re seeing a lot of price gouging out there, and we’re seeing a lot of reports of health professionals, both medical and dental, actually encouraging patients to do this and providing financial advice themselves, which is a massive conflict of interest.

Yeah. Well, look, it is, and I think one thing that we’ve noticed is because the bar for early access to super on medical grounds has been set so low, we’ve seen a lot of people taking out all their retirement savings to pay for everything from dental care, restorative dentistry, weight loss surgery, some cosmetic procedures, and so forth. And the trouble with that is, is that that in itself is causing inflation in the cost of these things and these treatments, including inflation in the out-of-pocket. So when- during the previous government there was a large amount of super was able to be- was released into the community and the rules were dropped for a while. That immediately caused a spike in out-of-pocket costs for a number of these hard-to-access treatments.

So we are seeing very strong demand for surgery in the private sector at the moment. And we’re not seeing any problems with private hospitals filling their beds with surgical patients, but particularly for planned surgery as it’s pretty hard to get access to a hospital waiting list at the moment.

Well, look, we have seen the report that the ABC is referring to, and I understand that they will be making it public later today. And it shows that not only are these procedures very expensive, but they’re being performed on some people for whom they’re seriously not a good idea – like people who are very elderly, frail, and where surgery has no chance of reducing their pain or disability. And furthermore, in association with those procedures, there has been massive overuse of medical devices which are overpriced, and some fraudulent behaviour of some of the clinicians concerned.

But what I think is at issue here is the behaviour of the clerks or the frontline workers that are going around talking to patients and getting them to sign documents, which, as you mentioned, the lady yesterday said that she didn’t fully understand. And that’s a problem for a couple of reasons. If there’s any coercion at all in that interaction, then that’s not appropriate. Sick people should not be coerced into signing anything under duress. And that includes- some people that we’ve seen have actually had private claims made against their name when they’re a public hospital when they’ve been completely incapacitated.

Well, look, this is part of the issue that the Federal Government and the health funds consider during the premium round process. So the private hospitals were invited to make submissions into that process about their own costs and the pressures that they were under during the pandemic, which we acknowledge. We acknowledge that the pandemic was tough on the private hospital sector. And then after the pandemic, they’ve had to contend with the inflationary pressures on wages, recruitment, power and food. And so that is acknowledged. There is a robust process by which health funds contract with hospitals to ensure that patients don’t have gaps on their hospitals

So look, it has been very thoroughly considered, and the public interest has been taken into account and including the cost of living crisis. But what- we are treading a bit of a fine line because a lot of the providers, so the hospitals and the medical practices that health insurance pays for, they’ve been hard hit by inflation as well. So a hospital has to pay for greatly increased costs of recruitment, power and food, and we have to be able to meet those costs to ensure that we can continue to offer quality services in the private sector. So that’s why premiums do need to go up by a bit this year.

The premium setting process that we undertake with the Federal Government is a very highly controlled process. There’s more than one regulator involved. So there’s APRA, the prudential regulator that goes through the figures with a fine tooth comb to ensure the funds can meet all their obligations under the law; and then the Department of Health that, as a regulator, also goes through the same process to ensure that the funds are behaving appropriately in terms of the health sector.

One of the things we’re grappling with, however is, as the Minister correctly identified, the cost of hospital care is going up. So not only are the number of procedures going up that we need to fund, the cost of those procedures is increasing and that’s because of inflation in the areas of recruitment, power and food that’s impacting hospitals. And so, fortunately, as a result of the process that we’ve been through we’ve been able to contain the cost of health insurance significantly below inflation and also below some of the really stratospheric rises we’ve seen in some other insurance types.