Sky News interview with Dr Rachel David regarding health fund premium increases

Station: Sky News Live
Program: Live Now
Date: 25/01/2018
Time: 11:09 AM
Compere: Samantha Maiden
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia; Mr Matthew Koce, CEO, Members Health


SAMANTHA MAIDEN: And joining me now live to discuss this is Matt Koce, the CEO of Members Health, and Rachel David from Private Healthcare Australia. Thank you so much for joining us this morning.

Rachel, if I could start with you; do you have any information about – we know that the average will be 3.95 per cent – of whether there’ll be any deals that’ll be substantially above that, or indeed below?

RACHEL DAVID: Look, there will be a couple of funds that will be above that, because they’ve had more claims than expected in the last year. They are not the major health funds, they’re one or two of the small ones, but customers need to be mindful that if their particular plan has gone up by more than they expect that there is competition and choice in the sector. They can look at the government’s website to compare products and find a more cost-effective option, or also go to the comparative sites or the funds themselves.
SAMANTHA MAIDEN: Rachel, can you tell us, of those smaller funds; firstly, can you tell us their names and how far above that 3.95 per cent average those increases will be?
RACHEL DAVID: Look, I don’t have a list off the top of my head, but there are some that are in the 5 to 6 per cent range. As I mentioned, not very many, and they don’t cover a large percentage of the number of people with private health insurance. But again, I would stress that the major funds are all around the 3 to 4 per cent level, and that if people are not happy with the rate increase that they receive, there are a number of other options available to them, both in terms of changing funds and changing policy to something that’s more appropriate to their life stage.
SAMANTHA MAIDEN: Yeah. Matt, do you think this is a good outcome today? The Government is obviously saying that it’s the lowest increase in 17 years, but that’ll be cold comfort for a lot of people that have to pay these premiums.
MATTHEW KOCE: Look, any increase is regrettable, but our health funds are trying to keep premiums as low as possible. We’re doing everything we can to do that. It’s the lowest increase in almost 20 years so that is a good news story, and it’s a result of really hard work. Rachel, myself, the government and others, we’ve been working really hard to try and reduce costs in the health supply chain. So, particularly addressing the high cost of prosthesis in Australia. This announcement wouldn’t have been possible if it weren’t for $188 million in savings on prosthesis, and that’s really good news for consumers. That’s flowing through. Every single health fund is passing those savings on to consumers through lower premiums. Premiums would have been 1 per cent higher on average if it weren’t for those prosthesis savings. But that’s just the tip of the iceberg. There’s a lot more work to be done on addressing health supply chain costs, whether it’s medical practitioners, whether it’s the big corporate hospitals, or whether it’s the big medical device conglomerates based overseas who are charging hundreds of millions of dollars more in Australia than they are in comparable countries overseas, and we’re keen to work with the Government on all those fronts. The minister has announced the establishment of a couple of committees. We’re really keen to work with the Government on supporting those committees and getting real, tangible outcomes that save consumers money.
SAMANTHA MAIDEN: Yeah, look, I think a lot of consumers are pretty fed up with the fact that they’re really forced to take out private health insurance by the tax system. But Rachel, you’ve called for, I believe, greater penalties for high income earners who are not taking out private health insurance?
RACHEL DAVID: Yeah, that’s right, and I think that health funds are asking for a review of the lever that the Government has to ensure that high income earners without private health insurance pay their fair share of elective surgery. There are only a very small number of high income earners who choose not to have private health insurance and who pay the Medicare levy surcharge, but it is getting to a point where that policy needs another look so that the surcharge doesn’t fall behind the actual cost of health insurance. Not many people will be affected, but it’s an important lever to ensure that people on high incomes think about the cost of elective treatments.
SAMANTHA MAIDEN: Yeah but, what are they really getting for their money? I mean, when we force people in their thirties to take out private insurance – many cases even into their forties – we’re asking them to really bankroll the health costs of older generations, are we not?
RACHEL DAVID: Yeah well look, I think …
SAMANTHA MAIDEN: [Talks over] I mean, in many cases people are taking out this health insurance for years and never making a claim.
RACHEL DAVID: Well look, I think that to some extent it’s true that older people do use their health insurance more than younger people. Certainly we’re still seeing strong growth in the health insurance market in people aged over 55. However, we need to bare in mind that most non-emergency surgery, and most admissions for mental health services, and most admissions for obs and gynae – or women’s surgery – are funded by private health insurance in the private sector, and that people who choose not to have health insurance – even in their thirties and forties – will be waiting an unknown length of time, sometimes even over a year or more, to access these services. And what we’re talking about is that last year alone we funded 25,000 more admissions for chemotherapy for cancer, 4500 more admissions to hospital for mental health services, 4500 more for cataracts or people who are going blind, 1500 more for knee reconstructions, and the list goes on and on of additional healthcare that the funds need to provide.

So, this doesn’t just affect older people. The mental health area, in particular, and the sports injuries area, in particular, predominantly impacts people in their twenties. So, people really should think hard about whether they want to give up that opportunity for prompt treatment in these areas.

SAMANTHA MAIDEN: Matt, what do you think about the idea of greater penalties? I mean, there are already so many sticks in the system in relation to forcing people to take out private health insurance. Do you agree that the penalties need to be greater for not doing that if you’re a high income earner, and where would you put that line?
MATTHEW KOCE: Look, I think those that can afford to do so should take out private health insurance. It takes pressure off the public health system for those who need it most; 13.5 million Australians have private health insurance, if even just a small percentage of that population were to drop cover, you can imagine the enormous strain it would put on the public health system. It would simply buckle and collapse. So, it’s really important that Government support private health as it supports the public health system. The rebate is declining by around a per cent every year. So, originally it was 30 per cent, a rebate that went to consumers taking up private health, it’s now means tested and its dropping to around 25 per cent. It’s going to drop by a per cent every year henceforth. So, we really need to look at how the Government can better support the private health system and better support consumers take personal responsibility for their health. And look, private health insurance is the best way to get fast high quality access to care. You never know when you’re going to need it, but you will have that assurance and it’s a very, very high standard of assurance.
SAMANTHA MAIDEN: Okay. Now, I would be remiss if I didn’t note as well, Rachel David, that I understand that your dad is being honoured at The Lodge in Canberra today for all of his work over the years in relation to the Craniofacial Unit as well. It’s obviously a great and very well deserved honour for him today as well.
RACHEL DAVID: Well, thank you for mentioning that, Sam, and I think it’s a very good example of the incredible standard of care that surgeons in Australia are able to provide. And I think as a country we’re very, very lucky to have access to that.
SAMANTHA MAIDEN: Alright. Rachel David, thank you very much for that today. And Matt, thank you for your time.
RACHEL DAVID: Thanks, Sam.
* * END * *