Station: 5AA
Program: Mornings
Date: 29/10/2019
Time: 11:07 AM
Compere: Leon Byner
Interviewees: Dr Rachel David, CEO, Private Healthcare Australia


LEON BYNER: Let’s talk to the CEO of the Private Healthcare Australia, Dr Rachel David. Rachel, thanks for coming on today.
RACHEL DAVID: Thanks Leon.
LEON BYNER: Just paint me a picture of how this would work, and the obvious question part b would be does that necessarily mean that health premiums would have to rise?
RACHEL DAVID: Look I’m glad you ask that because one of the big issues faced by consumers when they go down a pathway of private health, particularly for chronic conditions is the additive effect of out of pocket costs that they have to pay when they see a specialist – either a GP or a non-GP specialist in the community. And you can imagine if you have diabetes or a mental health condition you might have to see a specialist every week over a 10 week period, and if they charge a co-payment that can add up to sometimes thousands of dollars, not to mention the lab tests that you might have to receive at the same time. Then put on top of that chemotherapy and radiotherapy for people with cancer and it really begins to add up.

So we think that to improve the value proposition for private health customers this is the logical next step. The regulations that prevent this from happening were designed in the 1970’s when chronic conditions just weren’t as common and so the system is no longer fit for purpose.

LEON BYNER: Alright. Yeah.
RACHEL DAVID: I know you did raise the issue of would it put upward pressure on premiums, and I think it is worth addressing that well. Most of what we’re talking about here will either prevent an unnecessary admission to hospital because its addressing the issues that people might face earlier because of the lack of a co-payment, or alternatively its providing a substitute for a hospital admission, i.e. it’s providing care in the community because that’s the better setting and if a patient was to go into hospital it would be a lot more costly.
LEON BYNER: So, paint me a word picture. Let’s say somebody goes to the GP’s rooms, under this proposal when they’ve had the service what happens?
RACHEL DAVID: Well look, for a number of key conditions the GP would develop a management plan or a care plan anyway. So if you’re diagnosed with say a mental health condition like say severe depression that prevents you from going to work. The GP isn’t going to pull a solution out of the hat, after talking to you there’ll be certain standards, things that they’ll do to manage the condition. And one of the things is that they might refer you for a mental health management plan which is 10 visits to a psychologist or psychiatrist in the community. Now under the old system people would have to co-pay, a co-payment for each of those 10 visits and maybe even for the GP as well which could add up to say $2000.

Under this system we would say well let’s work out how we could deliver a cost effective no co-pay system so the patient wouldn’t have to pay anything. The GP would make the referral and we would have an agreement with that provider what we would pay in addition to Medicare and then we would, the patient if they had private health cover would pay either nothing as an out of pocket or a small co-payment. Now compare that to the current system where a patient has to pay say $100 every week for 10 weeks, they come to week five and they don’t have $100 – they’ve had to spend it on the groceries or the electricity bill or something else. They miss the appointment, their condition gets worse, they miss the next one because they’re stressed and anxious then things spiral out of control and they end up in hospital. Where, had they been treated properly earlier with an easy to access service it wouldn’t have happened.

LEON BYNER: Are you getting any positive vibes from Greg Hunt’s office about this?
RACHEL DAVID: We, look I think we are. I mean for some it’s been possible for funds like Medibank, or HBF, or BUPA to individually form relationships like this and deliver this kind of care as a trial. But it’s not the default position and the bureaucracy around doing that under the current legislation is really prohibitive, the funds have to do it one on one, basically one on one with the providers. But if this was to be made the norm, particularly in certain key conditions where we know we can actually make savings from hospital care than I think it would be a great improvement and I understand from Minister Hunt’s office that he is open to those discussions.
LEON BYNER: Well, having spoken to you I’ll now seek his attention tomorrow on the show if we can get him. And I bet the public rather like the sound of this Rachel because as you know one of the great banes of people that are insured with private health – particularly on the more lavish plans as we call them – is the co-payment issue, that is a big issue.
RACHEL DAVID: Well that’s exactly right. And while I don’t think we can enter into open ended arrangements where we just pay anything for any kind of service, a negotiated arrangement with providers to eliminate those out of pocket costs I think is achievable and it’s actually what we need to do.
LEON BYNER: Alright. We’re going to be interested in following this Rachel. That’s the CEO of Private Healthcare Australia Dr Rachel David.
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