Station: 2GB
Program: The Steve Price Show
Date: 30/10/2019
Time: 2:46 PM
Compere: Steve Price
Interviewees: Dr Rachel David, CEO, Private Healthcare Australia


STEVE PRICE: Private health insurers are pushing to allow the bills for patients treated outside the hospital system to be paid through private health insurance. I think this is a good idea because we’ve already seen what’s happening in our private and public hospitals, particularly public hospitals, with emergency departments overflowing with people. The changes would see insurers cover some of the out of pocket costs for going to a GP, specialist appointment, and at-home chemo. Now, that will help ease the burden on the hospitals.

Dr Rachel David is the CEO of the Private Healthcare Australia. She joins me on the line. Thanks for your time, nice to talk to you again.

RACHEL DAVID: G’day Steve.
STEVE PRICE: This is obviously something that would help your industry, but it is going to relieve a pressure valve on the public hospital system.
RACHEL DAVID Yes, and I think that more importantly this is something that has worried consumers and patients about private health for some time, that they could pay into their private health and get top hospital cover, but because of this really out of date legislation that dates to the 1970s, we’re not able to cover them for the cost of seeing a specialist or a GP to manage their condition in the community, and people get really frustrated particularly if they have a condition like diabetes or cancer. The cost of seeing the specialist can build up over time and be really quite substantial. And under the current laws, there’s no way that we can cover that across Australia.
STEVE PRICE: You had KPMG do a report. What did that show?
RACHEL DAVID: Well, look, the KPMG report was an international study that shows that a number of countries are struggling with this because traditionally health system has funded hospital. But now the kind of diseases that we’re all coping with are quite different than they were when a number of these systems were put together. Now we’re experiencing a lot more chronic conditions, things like diabetes, cancer that lasts over a long period of time, and mental health conditions – which actually are best treated in the community by specialists and by GPs. But the way that our funding system is set up, we- the health funds are only allowed to fund hospitals, and the Medicare system only funds part of the cost of seeing a specialist in the community.

One of the problems with that is that when people do get the co-payments in the community, that can be unaffordable for them so they stop getting treatment; they get sicker and end up in a hospital anyway.

STEVE PRICE: Yeah, it’s odd, isn’t it. I mean, you can fund services that don’t attract Medicare, like- you know, when I go to the dentist I’ll get some money back, when I go to the physio I’ll get some money back, but I can’t find something like a GP or even going to get a skin cancer check.
RACHEL DAVID: That’s right. So what we can’t do is co-fund or pay together with Medicare benefit if the treatment occurs outside of a hospital. And you can just imagine what that does. I mean, it’s a really big incentive for people to go into hospital for their treatment and for doctors and other health professionals to provide treatment in hospital, because they actually get paid a bit more. But you know, unfortunately that costs the health fund member a fortune in extra premiums because every time you book up a hospital, it costs a lot more than the treatment in another setting. So it’s really perverse and it’s something we know the Government’s up looking at changing. and that we would strongly support, particularly for people with chronic conditions.
STEVE PRICE: I know you said that people- this is a quote from Rachel, that people are actually waiting in some cases until their condition gets worse so they can be admitted to a hospital where they don’t have to pay a co-payment; is that really happening?
RACHEL DAVID: Yes, it is, and it’s particularly in some areas that we see this. And one of the worst ones is actually in mental health. You might be aware that if someone presents to a GP and they get signed up for mental health, they get diagnosed with a condition, they get the right meds, the GPs work them up fully, and they get signed up for from mental health management plan. That means they get 10 visits with either a psychologist or a psychiatrist funded under Medicare as part of that plan.

But every one of those visits comes with a co-payment that can be as much as $100 or $200. So you can imagine if you’re struggling to start with and you’ve got to pay $100 or $200 every week to a health professional, and then, you know, you’re facing all the other household bills, particularly things for your kids, are you going to say: well look, I’m not going to pay for my kid’s after school care and so forth because, you know, I need to go and see the psychologist. Of course you’re not. And so what happens is people don’t comply with the treatment, they get worse and end up in hospital in a much worse state than they were to start with. And that visit actually costs the taxpayer and the health fund member more. It’s a really bizarre situation.

STEVE PRICE: I imagine the AMA supports this. What’s the attitude of the Federal health ministers and the state health ministers? Do you know?
RACHEL DAVID: Our perspective is the Federal Health Minister is open to changes that don’t undermine Medicare and that don’t cause inflation in the health system. We are absolutely in agreement with that. This sort of arrangement will not touch the Medicare side of things. And in terms of health inflation, what we would need to do is negotiate an appropriate extra payment for those services that are not just escalating and escalating over time without any control.

So there would need to be a limits on what the funds will pay for out of hospital services, but it will certainly- and if doctors can agree to provide those services without a co-payment, then paying the extra is absolutely on the cards for us.

STEVE PRICE: And the other benefit it would have is it will keep more people in private health insurance, you would think, because it’s an incentive.
RACHEL DAVID: Well it makes the value proposition make so much more sense. For- in the modern world where technology has improved so much and so many more treatments can be offered in a very- in basically a doctor’s rooms and in community settings, there is- it is ridiculous to be restricting health funds just to payment for- to hospitals. Hospitals have a very important role in our health system, we’re very happy to pay benefits to people to go to hospital, but they’re for very sick people and people that need surgery – not for people that have a chronic condition that’s able to be managed and maintained, and good health maintained in the community.
STEVE PRICE: We’ll see where the debate goes. As usual, thanks for joining us.
RACHEL DAVID: Cheers, Steve.
STEVE PRICE: Dr Rachel David there, CEO of the Private Healthcare Australia. That’s an interesting idea. Certainly I know whenever you look inside the emergency department of a public hospital, they are filled to overflowing. 131-873’s our number.
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