Dr Rachel David interview on ABC Radio Adelaide, Mornings

Station: ABC Radio Adelaide
Program: Mornings
Date: 16/07/2018
Time: 9:09 AM
Compere: David Bevan

Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


DAVID BEVAN: But let’s talk to Dr Rachel David. She’s with Private Healthcare Australia. She represents the industry. Good morning, Rachel David.
RACHEL DAVID: Good morning, David.
DAVID BEVAN: Can you explain what these changes will mean for our listeners?
RACHEL DAVID: Well look, as health funds, we understood from market research, and a lot of consumer feedback, that folks finding it really difficult to understand what they were covered for and also how to choose and compare health fund products as the system has become more complex, particularly over the last 10 years. So, what we’ve done over the last two years is to work with the Federal Government and doctors, the AMA, and hospital groups to meticulously go through health fund products line by line, and categorise them into four different buckets, which will be labelled for consumers according to how much cover they get and the price. So top hospital cover, which covers everything, will now be known as gold cover. Your basic table, which is suitable for people in rural areas, who have their particular specialist but can only access a public hospital, their cover is known as basic, and there are a couple of other options in between – bronze and silver – that may be suitable for younger people who don’t have a lot of health problems, but who want to protect themselves in case something unexpected happens, like cancer or an accident, and they need immediate care, which is provided in a private hospital.
DAVID BEVAN: Okay. Now, when will these changes, these categories, kick in?
RACHEL DAVID: They’ll kick in from 1 April next year. Some of the changes to products that we’ve made- the other thing that we’ve done is to actually remove some of the more confusing historical features of health funds, like restrictions, which has meant people didn’t really understand that they weren’t fully covered in some particular areas. So that’s going to be simplified. That might take a little bit longer, but basically in the first half next year, these changes will come into effect, and at the same time the Commonwealth Ombudsman’s website – privatehealth.gov.au – will be significantly upgraded so that people can use that site in this new system to compare health fund products and make sure they select something appropriate to their life stage.
DAVID BEVAN: Anne has called from Glenelg. Good morning, Anne.
CALLER ANNE: Good morning. [Indistinct] If I’m a very healthy person and I’m saying that one of the middle levels, and then something happens, that I get something really, really horribly bad with me that’s only covered by, say, the gold section, then besides any restrictions, I mean, they might say you’ve got to wait 12 months. Well, I might be dead in 12 months. And also, the price might double and I’m a self-funded retiree, how am I going to manage that?
DAVID BEVAN: Let’s put that back to Dr Rachel David, she’s CEO of the Private Healthcare Australia. She represents the industry. Rachel, what do you say to Anne?
RACHEL DAVID: Well look, the way that private health insurance works is pretty much like general insurance, which people are often more familiar with. The price of the product or the premium you pay is based on the risk of you developing a particular condition. So, people that are- we can’t discriminate based on your own health because we’re in a community rated system, but that does mean that the person who is buying the health insurance product does need to have an idea of their own risk and make an estimate of that. So that as people get older, often what they do is they realise they’re beginning to develop a few chronic conditions and they reassess, and that often means upgrading their cover to a higher level. Now, there’s no way around the fact that if you want full coverage for everything that’s covered by the system that you will need to pay more. There’s no way around that. Sometimes there are some products which older people look for, which they could pay a bit less for because they don’t cover pregnancy or IVF, that does help make the products more affordable and that also goes back to Professor Tam’s comments, one the reasons we can’t cover obstetrics in every single tier is because it would make the system unaffordable for a very large number of people.

What I would suggest is that maybe people that are in the situation of needing to make a serious decision about how much they’re paying could get a check-up from their GP, understand what conditions they’re at risk of visit and then visit the website privatehealth.gov.au and make an informed decision about what they’re covered for to make sure they’re not paying too much. But I’m afraid in any insurance system – whether it’s general insurance or even Medicare – for full coverage, whether it’s through taxes or through private health, it does cost money.

DAVID BEVAN: How many different products are there?
RACHEL DAVID: Well look, some people have quoted some very large numbers, but often they’re products that are grandfathered with only one or two people on them, and they also account for a number of differences between states and territories [indistinct]..
DAVID BEVAN: [Interrupts] Well on the weekend- I saw a report on the weekend that there were tens upon tens of thousands of products
RACHEL DAVID: Well, that is really not true. In terms of real differences that can be discerned at the consumer level, there’s about 400 products. However, that still creates significant confusion for consumers who are purchasing health insurance, particularly for the first time or who want to understand what they’re covered for.
RACHEL DAVID: Which is why we’ve done this and put so much effort into creating this classification. The other thing I’ll mention quickly, is that when we begin to communicate this next year, everyone is going to get a very simple statement about what’s in their policy and what’s out, which will also help.
DAVID BEVAN: Alright. Now, let’s go to Elizabeth from [indistinct]. Hello, Elizabeth.
CALLER ELIZABETH: Good morning, everyone. I’m just ringing because my insurance for health doesn’t show the difference between my extras and my hospital. It just has an overall blanket charge. Now, the difficulty for me is I’m on the top level, but every time I go to the physio, I have to pay a huge amount. Doesn’t matter that I’m on the top level. If I go to physio or the podiatrist, I’m still paying extra money. So I would like to know how much I’m paying for my extras and how much I am paying for my hospital.
DAVID BEVAN: Dr Rachel David, will this new system answer Elizabeth’s question?
RACHEL DAVID: The system is really designed to look at hospital cover because that, according to the feedback we’ve got from consumes, has been the biggest area of concern – that they might arrive at a hospital once they’ve actually got sick and receive the information they’re not covered and have a large co-payment, and some the co-payments that would face area very large. We have looked at extras and in- as part of the committee that’s been working through this. And as a second stage to this process, we’ll be looking at ways to make it easier to compare the different extras product offerings from the funds.
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