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War of words over private health continues

28/03/2018By Matthew Woodley • Staff Journalist
An information war being waged between doctors and private healthcare funds continued this week, with the Australian Medical Association (AMA) releasing its 2018 ‘Private Health Insurance Report Card’.

The report, which warned changes being pursued by Australia’s largest private health insurers would reduce patient choice of doctor and hospital, was released on the same day that Private Healthcare Australia (PHA) CEO Dr Rachel David advised patients to ask for quotes in advance of surgery.

Dr Michael Gannon, AMA president
“Public confidence in private health insurance is already at an all-time low. These changes will further devalue policies, which are a major financial burden for Australian families, and will place dangerous pressure on the already stressed public hospital system.”
Dr Michael Gannon, AMA president

The latest salvos were launched one week before across-the-board increases in private health insurance on April 1, and after medical groups around Australia criticised policy announcements by Australia’s largest private insurer, Bupa, as a move toward ‘managed care’.

In a media release detailing the 2018 Report Card, AMA president Dr Michael Gannon said it showed that policy exclusions and policyholder complaints had risen at the same time as health fund profits have increased.

“The big insurers are pursuing a US-style managed care agenda to save costs and further increase profits by making it harder for patients to receive care from the doctor they want in the most appropriate hospital for their condition,” Gannon said.

“Public confidence in private health insurance is already at an all-time low. These changes will further devalue policies, which are a major financial burden for Australian families, and will place dangerous pressure on the already stressed public hospital system.”

The report, compiled primarily with data from the Australian Prudential Regulation Authority (APRA), also revealed the varying benefits cover provided by Australia’s largest insurers for common procedures, and the way cover can vary from state to state. Using statistics from NSW, it showed HCF offered the best coverage for cataract surgery and would cover gaps up to $1,293.10, while conversely Mildura Health Fund would only reimburse patients up to $1,064.95.

It also showed the varying benefits Bupa paid for cataract surgery between states. Victorian patients received the best coverage – up to $1,401.05 above 75% of the MBS fee – while patients in Tasmania and the Northern Territory were only covered up to $1,176.

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“To help consumers better understand what they are buying, we set out the percentage of hospital charges covered by state and insurer, and the percentage of services with no gap, state by state,” Gannon said.

“There is also a breakdown of the complaints received by provider and organisation, which shows that the number of private insurance complaints are significant, and on the rise.”

PHA release

David responded to what she said were media reports about excessive out-of-pocket costs by saying while most specialists are aware patients are in a vulnerable position when discussing the potential costs of treatment, there are exceptions.

“Many patients are able to have their treatment with no gap or a known gap, but it pays to be prepared well in advance of surgery,” the PHA CEO said.

“Health funds do their best to cover the gap for most surgical procedures, but they are unable to chase fees which continue to escalate above inflation, without causing premiums to go up for everyone.”

“Transparency around fees and charges is critical for the sustainability of the private health system, which provides over two thirds of elective surgery in Australia,” she added.

David also released a five-point list advising patients to consult with their GPs and insurance companies if they were concerned about costs, and to refuse to pay unexplained charges on a bill without an explanation from the physician.

More reading:

AMA Private Health Insurance Report Card

Private Healthcare Australia five point list

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