Funding looks set for a shake up, as insurers call on government to makeover the entire health funding model.
Funding looks set for a shake up, as insurers call on government to makeover the entire health funding model.Health funds have called on the federal government to cut waste—claiming $500 million can be saved on prosthetic devices—and encourage younger Australians to take out private health insurance.
Spiralling healthcare costs, rising policy premiums, an ageing population and the growth in chronic disease have sparked concerns for the future of health funding, triggering the federal review.
Funds providing submissions to the health insurance review included Medibank Private, nib and Bupa. They’ve provided an outline of changes they’d like to see made to counteract the rising costs to insurers, while agitating for change to the pricing of prosthetic devices in a move to reduce their bottom lines.
Bupa health insurance managing director, Dr Dwayne Crombie, described prosthesis pricing by the government as “ridiculous.”
“It is Alice in Wonderland stuff. There is about $500 million sloshing around in kickbacks and rebates, divided up between public and private hospitals and the medical device makers, and the poor old customers are lumped with the worst deal in the OECD [countries],” he explained.
“We could pass that back completely to the customer through price. It is just such a no-brainer.”
Mark Fitzgibbon, managing director of nib, said: “We spend more on prosthetic devices now than we do on doctors. The cost variation is just outrageous. We know that what we pay for a device can be four or five times more than what a public hospital pays for it.”
The funds are also encouraging incentivisation of the younger population to take up private health insurance.
Providers are calling for lifetime discounts for new members under 30 in a bid to encourage take-up. Existing rules penalise Australians over 30 for every year they fail to take out private health insurance.
Health minister Sussan Ley has reportedly flagged cuts to the ancillary rebate as a potential place to find savings, however the health funds disagree on this measure.
“They seem to have articulated a predisposition to eliminate the ancillary rebate without stating whether they are looking to just save money or reprioritise its use to other worthwhile activities such as making hospital policies more affordable,” Dr Crombie said.
“Given 12 million Australians receive this rebate, there could be a lot of unintended consequences to consumers.”
Dr Crombie said it is “critical” to get affordability under control to prevent systemic cover downgrades by price-conscious consumers.
“If consumers continue to downgrade or drop their health cover there will be serious knock-on effects for the whole system,” he said.
Mr Fitzgibbon was more direct: “We need a new system.”
