Transcript
Station: 5AA
Program: Mornings
Date: 20/06/2022
Time: 9:08 AM
Compere: Leon Byner
Program: Mornings
Date: 20/06/2022
Time: 9:08 AM
Compere: Leon Byner
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia
| LEON BYNER: | Now look, the big issue for those who want to keep healthy is the out-of-pocket medical expenses, and we see that patients are facing very big out-of-pockets. And this is partly because surgeons have put their fees up by more than 30 per cent, and they want to make up for lost income during COVID. But of course, all this stuff gets passed down the chain. There’s been an investigation, and since the start of 2020 to the end of 2021, the average medical out-of-pocket payment for, let’s say, orthopaedics, for example, like hip and knee replacements, increased by 34 per cent from $314 to $422. Now, of course, you’ve got to pay for this, so something else has to go.
But let’s talk to the Private Healthcare Australia’s Chief Executive, Dr Rachel David. Rachel, is any of this a surprise to you? And good morning. |
| RACHEL DAVID: | Yes, good morning, Leon. It is a bit of a surprise that fees, out-of-pocket fees for some medical specialities have got- that they’ve gone up so sharply just in the last two years, and is well above inflation. We’re still trying to sort out why. Some issues may be around the supply chain for certain equipment or the cost of labour going up and so forth. |
| LEON BYNER: | Yeah. |
| RACHEL DAVID: | But this really is a bit of a shock. It is an average. But we are seeing that some specialities like orthopaedics and some procedures like breast reconstruction after cancer and weight loss surgery have gone up sharply in relation to other things. So look, it is a concern because people out there are doing it tough. And surgeons are probably the highest income earners in the entire country, so I think there needs to be a bit of a recognition that something needs to give here. |
| LEON BYNER: | Well, if surgeons are going to keep their costs and are going to get their recoveries and they’ve got to make a margin like anybody in business, where does that leave the consumer? |
| RACHEL DAVID: | Well look, I think, at the moment, people are really concerned about two things – one is the cost of living. There’s inflation in everything from fruit and vegetables to energy prices going on. And secondly, they’re really concerned about public hospital wait times. And what’s worrying me is, health funds can cover some of the increased gap, but they can’t cover a 30 per cent increase in costs without putting up premiums for everyone. So I think there needs to be a little bit of a recognition that consumers will find this hard and some will drop out of the private system and inevitably end up making the waiting list situation worse. So it really needs to, as a private sector community, it really needs to be pulling in the same direction on this. If there is a reason that a 30 per cent fee hike is justified, well, let’s talk about it. Let’s see [indistinct]… |
| LEON BYNER: | [Interrupts] Well, is it that the cost of prosthetics is gone up? Or is it something else? |
| RACHEL DAVID: | No, I think that’s a problem but it’s actually a separate issue, because the health funds cover that completely and in a different way. These are the actual fees that surgeons are charging for their own services and their own practice. |
| LEON BYNER: | Are they pricing themselves out of the market? |
| RACHEL DAVID: | Well, this is a real risk. People have been relatively cashed up during the pandemic, but that’s coming to a rapid end. So with interest rates going up, with the cost of all sorts of other goods and services going up, this is not a situation that’s going to last. So, a 30- 20 to 30 per cent fee hike in some specialities continues, what they can expect is a shrinking of pool of patients that they’ll be able to draw from, and that the remainder of the people will just be joining waiting lists. I don’t think that’s a good outcome and I think we need to be much more mindful of the impact on like the average Joe in the community in some of these decisions. |
| LEON BYNER: | So tell me, how much are private fund premiums going up? What’s the percentage pressure on them right now? |
| RACHEL DAVID: | Well look, at the moment, we’ve had a long period of quite low premium increases. In fact, the last one, about 27.7 per cent was the lowest in a couple of decades. And in fact, many funds have actually, because of the slowdown of the pandemic, have actually postponed it for a while, while things get back to normal. So in fact it is well below the CPI. Health funds are doing everything they can to keep the system affordable in spite of inflation in the Health sector. But I’m really struggling to understand how a 20 to 30 per cent hike in fees to some of the highest earning people in the whole country could possibly be justified, even with some of the pressures on the economy and workforce that we’re seeing at the moment. |
| LEON BYNER: | Do we have a justification mechanism for this? Or is it really, well, it’s an open market and if you want to charge a certain fee, charge it, and then people can shop around? But this business of shopping around has limited ability, particularly if everybody’s doing the same thing. |
| RACHEL DAVID: | Look, that’s right. And I think that- but I do think that patients have some choice in the matter, and I think the first step for patients is to- if they know that they’ve been referred for surgery, to talk to their GPs and to their Health fund and make it clear if cost is a concern for them because there may be the potential for them to be directed to another specialist. They need to be very upfront with their specialist, no matter how uncomfortable it may be, about making sure that they get full financial consent. And if it is going to be expensive, then to ask their GP to be referred to someone else, or in fact, check the internet and check patient groups and get a sense of what other specialists are charging in their neighbourhood. There is a Medical Costs Finder website that’s run by the Department of Health that may also be useful with this. And I think for some procedures, if you’re otherwise healthy and there are procedures that you- and you’re organised and there are procedures that require a degree of organisation, I’m thinking about weight loss surgery here where you do have to do a lot of preparation for it. |
| LEON BYNER: | Yeah. |
| RACHEL DAVID: | It might be worth comparing prices around the whole country, because it actually might be worth your while to seek treatment interstate. Now, for someone in Adelaide, Adelaide surgeons tend to be on the low charging side anyway. But it is really worth checking with patient groups and checking online to make sure that you’re not seeing a very high charging specialist. |
| LEON BYNER: | Rachel, thank you for joining us. That’s the CEO of Private Healthcare. I wonder how many people who, when they go to a specialist, are actually temeritous enough to discuss fees? |
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