PHA CEO Dr Rachel David discusses the AMA proposal for additional PHI regulation with ABC’s David Bevan

Station: ABC Radio Adelaide
Program: Mornings
Date: 30/06/2022
Time: 9:18 AM
Compere: David Bevan
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


DAVID BEVAN: Well, what does Dr Rachel David think? She’s CEO of the Private Health Care Australia. Good morning, Dr David.
RACHEL DAVID: Morning, David.
DAVID BEVAN: We’ve spoken about this before. Now the AMA, they’re saying we need a new regulator. We need to rethink penalties for people who are joining too late in the life of- well, in their life. And there’s going to be a meeting to discuss all of this. What do you make of it?
RACHEL DAVID: Well look, as a representative of Australian health funds, can I say: the last thing we need right now is another layer of bureaucracy to deal with. We are one of the most regulated sectors in the entire economy and, in fact, many reviews have said – including by the Productivity Commission and the Grattan Institute -that we are over regulated and this is already putting upward pressure on premiums. We’ve got some good regulators out there who can help us resolve some of these problems already. And Dr Khorshid is right, there is a need to continue to scrutinise and reform this sector. But we’ve got some pretty powerful regulators. We’ve got APRA, to make sure we have enough money to pay claims; we’ve got the ACCC, to make sure that we look after patients and consumers properly; and, we’ve got the Department of Health, who helps us with the private health side and Medicare. So, we really don’t need another layer on top of that.

What we need is for the people running the system to have the maturity to negotiate within the existing regulatory framework to deliver much better value to consumers. And if it’s not in the public interest, then we shouldn’t be doing it.

DAVID BEVAN: Yeah. But what do you say to Ann from Victor Harbor and Rosemary? I mean, they’re both singing from the same song sheet, aren’t they? And that is: we put in- we paid premiums for decades, and then the private health insurance company turns around and says: Well, we’re paying you more now than you put in for this year, here’s the gap and the gap is prohibitive. So, Ann is thinking: Well, I just blew my money, didn’t I? thought you were investing that so when the day came for me to make a claim, you could cover me. But you don’t. You have me a prohibitive gap.
RACHEL DAVID: Yeah. Well look, I think there’s a couple of issues there, and I really feel for, particularly, Ann with her frustrations about the doctor’s fee. Health funds, by and large, there are very few gaps out there for hospital cover, and that’s the biggest cost that the health funds cover. Just the cost of a standard hip replacement with no complications in hospital for a single hip is $30,000. So, the ability of an individual to be able to save up that amount of money over a lifetime for- and perhaps have multiple procedures, is actually quite difficult.

The trouble is with some of the out-of-pocket fees that get charged, and bear in mind that health funds can’t cover, under our legal system, they can’t cover for outpatient costs. And that’s something we’re working with the Government to try and change. So, if you visit the doctor in their rooms, we can’t cover that and that’s something that we might need to look at as part of a reform process. But these outrageous out-of-pocket fees in some specialities, and not all – bear in mind, not all specialists have put up their fees to that extent – are really something that the existing regulators need to look at and get a bit tougher on. We’ve noticed that, during the pandemic as a consequence of the pandemic, some specialist groups put up their fees in the last two years by 30 per cent. Now, that is just not on when the rest of the community is struggling.

I mean, let’s be clear – we know people have, or surgeons have struggled with their earnings because there’s been lockdowns during the pandemic period. But a 30 per cent increase? There is- It’s very hard to justify that when you are the highest earning group of people in the community bar none. And Health funds can’t chase these big fees and continue to cover them, because that will put up premiums for all members and more people will drop out. And it becomes a vicious cycle very quickly.

DAVID BEVAN: So, you’re saying it’s those greedy specialists?
RACHEL DAVID: Well, I wouldn’t use the word greedy. I think unaware.
DAVID BEVAN: What word would you use, Rachel?
RACHEL DAVID: I would think using more social awareness is the right term, and thinking: Okay, well look, we get that-
DAVID BEVAN: [Interrupts] So, a person who is not socially aware and is just interested in getting as much money as they can – they would be, greedy.
RACHEL DAVID: I think having some awareness about the way that some in society might be struggling as a consequence of the pandemic is paramount here. It’s very easy – I mean, I’m a medical graduate myself – it’s very easy just to focus on the issue just in front of you, particularly if you’re a specialist, and that’s all you’re seeing day in, day out. But the economic circumstances of people, particularly now with the cost of living and the consequences of the pandemic, need to be taken into account.

And look, I’m pretty disappointed that Ann wrote to three surgeons and didn’t get a response. You know, that sort of thing shows a lack of social awareness, and awareness of how the other half is living that, you know to be honest, medical graduates should have.

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