[vc_row][vc_column][vc_column_text]The Government has introduced a range of measures to increase affordability including the $1.1bn cuts to medical devices, providing discounts to under 30-year old’s and forthcoming classification of policies into gold, silver, bronze and basic.

Meanwhile Labor has promised a wide-ranging Productivity Commission review, the first in 20 years, during which it committed to capping annual premium increases to 2% for two years.

Australia has a fantastic health care system that delivers great patient outcomes for the money we spend. Health expenditure should not be a cost but an investment in our community by maintaining a healthy population.

The reality is, surgical volume growth is slowing, a sign that private health insurance (PHI) customers are either electing to delay procedures or go onto the public waiting list. And why might they be doing this? Cost.

Last week the ACCC released its annual report into the private health insurance industry, which called for the industry to make its products more consumer friendly by providing reliable and transparent information about product features and changes to private health insurance policies.

Dissatisfaction with PHI has reached that point that complaints to the Private Health Insurance Ombudsman (PHIO) have increased by 30%, continuing a trend of increasing complaints, which have risen for the fourth consecutive year.

The evidence of increasing profits and retained capital reserves by private health insurers would indicate scope for them to do more on their end.

The Medical Technology Association of Australia’s (MTAA) CEO, Ian Burgess, has pointed to the Prostheses List Agreement, co-signed with the Government, which has resulted in $1.1 billion in cuts, over four years, to assist with the affordability of private health insurance.

“More and more Australians are turning away from Private Health Insurance (PHI) because it is increasingly costly while covering less and less due to exclusions” Mr Burgess said.

“Just last week PHI was claiming a 2% cap on premium increases would lead to eight insurers operating at a loss in the first year and put three on the brink of insolvency in the second.  This is an industry that receives $6 billion in taxpayer subsidies every year.

“The public would be right to seriously question the fundamentals of the PHI industry, if it can’t deal with a 2% cap,” he said.

The increase in out-of-pocket costs is seeing patients not opting for elective surgery in private hospitals and instead going on our public waiting list.

According to a Credit Suisse analyst “utilisation in the short term as long as affordability pressures continue to shift patients into the public system and the government displays low appetite to produce meaningful reforms to reverse this trend.”

Australia’s largest private hospital provider Ramsay Health Care, revealed this problem recently.

“We are facing more challenging conditions in Australia with lower growth in procedural work and inpatient admissions, which has adversely impacted casemix in our Australian hospitals,” Ramsay’s managing director, Craig McNally, said.

“Given the current climate around private health insurance and affordability, we expect this trend will continue into 2019.”

The problem is exacerbated for the private hospitals who over recent years have aggressively increased the number of beds and brownfield sites, leaving them with a quagmire of less patients and more beds.

The Weekend Australian revealed that internal government documents had warned the Health Minister reforms were needed to prevent a decade-long decline in the sector.

The Office of Best Practice Regulation wrote that “Without a discussion of how consumers might take advantage of reforms to change their level of private health insurance, or how the take-up by younger people might be affected, it is difficult to see how the reform option as a package is intended to result in a net benefit for consumers, private health insurers and the community.”

Many across the healthcare sector have raised concerns that nothing in the next 12 months will see PHI increase its value proposition to consumers and ever increasing profits will only fuel the rage.[/vc_column_text][/vc_column][/vc_row]

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