Patients lose out in private health insurers’ race to the bottom
The continual spread of misinformation by the private health insurance industry around the causes of higher than expected private health insurance premium increases is a race to the bottom that will ultimately leave patients worse off.
“It is incumbent on all players in the industry to work collaboratively to ensure the sustainability of our healthcare system moving forward,” said Ian Burgess, MTAA CEO, today.
“Access to modern life-saving technology through the Prostheses List is a key part of the value proposition of private health insurance.
“Sustained attempts by the insurers to restrict and water down patient access to medical technology is now presenting a very real risk of further diminishing the value of the product they sell.
“The devices industry was the sole contributor to lower private health insurance premium increases both in 2017 and in 2018. MTAA’s Agreement with the Government is on track to exceed $1.1 billion in expected savings.
“Patients deserve better than to be caught in the middle of a race to the bottom being inflicted on them by a private health insurance industry that has failed to address its own issues.
The recently released AlphaBeta report, Keeping Premiums Low: Towards a more sustainable private healthcare system, found that insurers have collected 50% more profit from each of their members over the past five years, far outpacing the 21% growth in benefits paid out.
It also found that private health funds have not extracted sufficient economies of scale in the wake of significant revenue growth and many funds are well above the industry average of 9% in operational expenditure, this includes an estimated marketing spend of $400 million.
Medical devices make up less than 10 per cent of private insurance benefits.
“Medibank profits are up 25% from the start of 2019, yet affordability for ordinary Australian families is going down,” Mr Burgess said.
“Patient and clinician choice is a key part of the value proposition of private health insurance, one that risks being eroded by the false claims made by insurers about the cost of devices.
“The medical technology industry believes access to a full range of medical technology is one of the key benefits of having private health insurance and we’re committed to helping ensure all Australians lead healthier and more productive lives,” Mr Burgess concluded.