Last year the medical device industry signed an agreement with the Commonwealth Government to deliver $1.1 billion in benefit reductions for private health insurers in exchange for various reforms intended to provide patients better access to life-changing and life-saving technology.
The Australian’s story has highlighted evidence that private patients in public hospitals is costing the private health system $1 billion. This is further evidence of real “fat in the system” including the more than $1.6 billion a year in uncovered gap payments.
The revelations support an earlier report from Catholic Health Australia which showed public hospitals were encouraging patients to ‘go private’, allowing the hospital to bill the patient’s health insurance and Medicare, at a cost of $1.1 billion per year.
Australian Private Hospitals Association CEO, Michael Roff, raised concerns about the increasing number of private patients in public hospitals as a result of active recruitment of the privately insured patients by the public system.
“Around Australia people are being left languishing on waiting lists while those with private health insurance are cajoled into using their insurance in the public system and jumping the public queue. It’s time for states to be held to account and for Australians to get the health system they deserve,” Mr Roff said.
“If this practice did not occur it is estimated health insurance premiums would be at least six percent lower.”
Queensland Minister for Health and Minister for Ambulance Services, Steven Miles said profit driven rent-seeking was nowhere more obvious than in the private hospital industry.
“Its [the private hospitals industry] latest attempt to secure monopoly billing rights for private patients demonstrates it is unwilling to compete with public hospitals and has no concern for the ongoing viability of private health insurance Privately insured patients pay a lot for their insurance, and they should be able to choose the hospital they want to use,” Mr Miles said.
“The entire premise of taxpayer subsidised private health insurance is to take pressure off the public system.
“Increasingly, private patients want to be treated in public hospitals. They should be able to use their insurance — which they pay thousands of dollars for.
“If the private hospitals succeed in their campaign they will drive even more Australians to desert private health insurance.”
The recent Heads of Agreement put forward by the Commonwealth seeks to tackle this issue directly by ensuring “the information and process for patients electing to use private health insurance in public hospital emergency departments is appropriate, robust and best supports consumer choice.” This week Tasmania and the Northern Territory signed up to the Heads of Agreement, leaving only Queensland and Victoria to commit.
The medical technology industry has always maintained – given it represents 10% of private health insurers overall costs – real savings would come from other areas of the health system including private hospitals and medical services.
CEO of the Medical Technology Association of Australia (MTAA), Ian Burgess, said the MedTech industry is incurring a $1.1 billion cut which is going directly to the private health insurance companies to improve the affordability of their insurance products.
“We’re the major reason this year’s average private health insurance premium increase was the lowest in 17 years,” Mr Burgess said.
“MTAA strongly supports the need for a healthy and viable private health insurance sector in Australia.
“Our dual public and private healthcare system means reform is complex and challenging but to ensure it’s sustainable all stakeholders need to be held to a level of transparency.”
Reform in healthcare is clearly a hot issue and will continue to be as we hurtle towards the next Federal election.