Steve Price, Triple M Interview with Rachel David, CEO of Private Healthcare Australia, about Private Insurers.

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STEVE PRICE:

If you are considering a holiday in Queensland over the Christmas-New Year period, you can probably go there with some relaxation. However, the Queensland Premier who we’ll hear from shortly, Annastacia Palaszczuk, she said that she’s going to put masks back on. Masks will be mandatory in all retail. Now, that is what Dominic Perrottet should do as well. She’s saying she’s doing that because there’s been a dramatic escalation of cases in New South Wales. I don’t think Dominic Perrottet will move, by the way. But the Premier went on to say there’ll be no lockdown and the two words that follow that worried me, before Christmas. Okay, what about after Christmas? Could we- if you’re one of those tens of thousands of people from South Australia, or Victoria, or New South Wales, who want to go to Queensland, can you confidently go there after Christmas believing there’ll be no border lockdowns? Clearly, Canberra’s given the message to the state premiers, don’t do it. But I think some of the state premiers may not agree. Something else that is causing some concern is this idea that we might have to pay more for our medical insurance. It’s already expensive for many families. And the Federal Health Minister, Greg Hunt, last week wrote to the insurers, urging them to reconsider submission for premium rises and urged the health funds to be mindful of the affordability concerns of their members. Rachel David is the CEO of Private Healthcare Australia, representing the fund. She’s on the line. Thanks for your time.

RACHEL DAVID:

Morning, Steve.

STEVE PRICE:

Is it going to cost us more next year?

RACHEL DAVID:

Well, look, health funds don’t want to have to put up premiums by a single dollar. But the reason their hands are tied is related to the input costs, or the costs of medical treatment actually going up. In this case, the cause of the cost of medical treatment going up is actually Commonwealth government regulation. So the government itself, through its regulation of the cost of medical technology, is actually a contributing factor to premiums going up.

STEVE PRICE:

So the Medical Technology Association of Australia, you’d be aware of Ian Burgess, their Chief Executive, claims that you’re using that line as a smokescreen to make more money out of premiums.

RACHEL DAVID:

No, look, that’s absolutely not right. The health funds are very tightly regulated on that front by the Australian Prudential Regulation Authority. So that’s not a claim that we could make without strong evidence. Last year, even during the pandemic or lockdown, the cost of medical technologies rose at 2.5 times inflation. Now, these are not new or wonderful medical technologies. These are your common old garden nuts and bolts that are used in surgery. And we’re- for which we are currently paying at least 30 per cent more than any other comparable country. We’ve had the Federal Government on notice for some time that they need to re-regulate the system, and we are very confident that, after years of working with them, that will happen. But to have an impact on premiums by next year, it needs to happen quickly now.

STEVE PRICE:

And the Government does not seem in election mode to be moving in that direction, although the timing might be prescient in that they could go to an election saying that we’ve held the cost of your private health insurance down by doing A or B. Is that what you hope happens?

RACHEL DAVID:

Well, yes, we do. And I can absolutely reassure people with private health insurance that we will not put a dollar of extra pressure on premiums without a very good reason. But while the cost of these technologies are rising at 2.5 times inflation, we are legally obliged, under our regulatory framework, to include that in the price. And what- so we are very reliant on the Federal Government at this stage to make the decision to reprice these items as a matter of urgency.

STEVE PRICE:                        We have had an unusual two years, and things have changed, particularly in medical procedures, including elective surgery. So a lot of elective surgery hasn’t happened. Would that not put downward pressure on your costs, given that people aren’t claiming for elective surgery during that period of time?

RACHEL DAVID:

Look, what we’ve seen happen is that the claims have been very volatile. Some elective surgery has taken place during the lockdown, some more urgent cases. But after the lockdowns, it’s really spiked up very high as a consequence of people needing to catch that step backlog up. And we’re also expecting that this year, in 2022, we’ll have to catch up a big backlog that the public system won’t actually be able to do, because it’s very- they have a very long waiting list now on the public side. But that being said, you’re right. The claims expenditure has reduced during those last two years. So what the funds have done is they’ve given back that funding to consumers in a planned- a planned payback scheme that most of them have introduced. So people with private health insurance that are interested in that should contact their fund about what measures they are using to pay those funds back. And we also have that information on our website at pha.org.au.

STEVE PRICE:

Yeah, I had a text or an email about that the other day, and I didn’t quite understand it. So, you know, being as busy as we all are, I sort of thought, well, if it’s not a bill I have to pay, I’m not going to worry about it. Perhaps I should go back and read it.

RACHEL DAVID:

Yeah. Well, I think so long as you’ve got an account with a health fund, it should happen automatically. But certainly, if people are interested, they can look on our website or call their own health insurer.

STEVE PRICE:

Good on you. And as we wrap up the political year, still no announcement from Greg Hunt. Are you hopeful     you’ll get one before the end of the year, or you now not what- not expecting it until we restart in February?

RACHEL DAVID:

Look, we are very hopeful that we can get this resolved and get the best possible outcome for health fund members, particularly heading into 2022. Everybody has had a very tough year, but we want to make sure that people do have affordable access to elective surgery in the New Year.

STEVE PRICE:

Nice to talk to you. Thanks very much for joining us this morning.

RACHEL DAVID:

Thanks Steve.

STEVE PRICE:

Rachel David, the CEO of Private Healthcare Australia.