The Australian Society of Ophthalmologists (ASO) is supportive of a new push for an “independent umpire” of the private health insurance (PHI) sector, helping to relieve the Department of Health of its conflicted role as both regulator and policy maker.
The proposed Private Health System Authority forms part of the Australian Medication Association (AMA)’s recent discussion paper calling for whole of system approach to reforming private healthcare to build consensus on reforms.
AMA president Dr Omar Khorshid said the PHI sector was an essential pillar of the health system, providing almost 60% of elective surgery admissions.
“The system is critical to charting a course out of the COVID-19 pandemic and tackling the growing waiting lists for elective, but essential, surgery,” he said.
“Without immediate intervention, reform will continue to be piecemeal and limited at best, with the real risk of ongoing conflict in the sector, all of which does nothing to instil confidence in policyholders and patients.”
The Australian Society of Ophthalmologists (ASO) has previously called for the formation of a PHI regulator, as part of its Send the Eagle Home campaign, in response to concerns about the creep of US-style managed care in Australia.
Khorshid said the private health system prior to COVID saw falling membership, with the AMA concerned memberships will start declining again. There are increasing numbers of older, sicker members, fewer young policyholders and premium rises that are pricing families and young Australians out of the market.
Under increasing financial pressure, the AMA said insurers are turning to selective contracting and purchasing of healthcare services to provide vertically integrated care, in order to reduce outlays, drive innovation and fill gaps in service.
The AMA said that current constraints on private health insurers owning majority shares of healthcare services and providing vertically integrated care “are largely practical and commercial considerations made by the sector”, as opposed to a legislative mandate from government.
“A new Private Health System Authority would help ensure a cohesive regulatory model by relieving the Department of Health of its conflicted role as a regulator and policy maker and it would incorporate new functions to fill gaps in the current regulatory environment,” Khorshid said.
“Under current arrangements no one has looked at the bigger regulatory picture to gauge the impact of ad hoc changes or balance the interests and needs of patients, day hospitals, private hospitals, private health insurers, medical device manufacturers and doctors.
Khorshid continued: “We have all said we are not trying to benefit at the expense of others, and all we want is patient-centric, clinician-led care that is safe, high-quality, and delivers value for the patient. We all agree on this, so now is the time to act.
“The authority would create a platform for everyone in the sector to move away from combative debates and work together under better regulation to deliver better outcomes for all. The AMA stands ready to support the sector to safeguard this essential pillar in our healthcare system.”
Submissions on the discussion paper can be made until 31 August 2022.
More reading
ACCC says US-style managed care ‘unlikely’ in final Honeysuckle ruling
‘Managed care’ concerns as ACCC authorises Honeysuckle buying group
Health funds lay out pandemic blueprint amid declining membership
