Station: ABC News
Program: News Breakfast
Date: 24/10/2019
Time: 7:19 AM
Compere: Michael Rowland and Lisa Millar
Interviewees: Dr Rachel David, CEO, Private Healthcare Australia


MICHAEL ROWLAND: Lenore Meldrum, whose husband, Blair, died in 2017.

We’re joined for more on this now by the Chief Executive of Private Healthcare Australia, Rachel David, from Sydney.

Rachel, good morning.

RACHEL DAVID: Good morning.
MICHAEL ROWLAND: Lenore’s experience simply is not good enough, is it?
RACHEL DAVID: No, well that’s right. And this is a really sad case that highlights some of the gaps in the system that have opened up. Because what we’re really dealing with is a system with Medicare and private health – they were designed together to interlock – that we’ve had since the 1970’s. And I think there are a couple of things there that we do need to address and the Federal Government is beginning to address. One is that private health insurance is designed to cover care as an inpatient in a hospital. We’re not able, under current legislation, to cover outpatient treatments like some radiotherapy and X-rays, and so forth, which is how these out-of-pockets get generated. And I think in today’s world where we have a lot more chronic conditions, including some forms of cancer which go on and on, that really needs to be looked at, and Minister Hunt has been very keen to do that.

In the last round of reforms that Minister Hunt got through on private health insurance, two things were fixed. One is that health funds are now able to cover for transport and accommodation costs in rural- for people living in rural and regional Australia, which is a step forward.

And the second thing is that the system has been made a lot simpler in terms of the Gold, Silver, Bronze, Basic terminology that we now use to classify products; and that each clinical area is now better defined so that if people are covered for an area then they are fully covered.

MICHAEL ROWLAND: One of Lenore’s other concerns is that the health fund in question wasn’t able to give her even a rough ballpark figure of the costs that they’d reimburse ahead of Blair’s treatment. There is something seriously wrong, and we can talk all we like about medical devices in other parts of the healthcare system, this is on the private health insurance- insurers: why can’t they give an upfront estimation of reimbursement costs?
RACHEL DAVID: Well, sometimes one of the issues is that there is a lot of fragmentation about what the provider will charge. Under the Australian law and under the Australian system, private providers are- you can’t control what they charge if you’re a government entity or the health fund. So you have to rely on them getting the claim to you first. Now, I don’t think that’s good enough either, and I think in this case it’s quite clear the health fund could have probably done more to reach out to the provider and more proactively manage this case. What I do …
MICHAEL ROWLAND: [Interrupts] Would have made a big difference to Lenore’s and Blair’s experience – that simple step. Would you like to see more of that by the insurers?
RACHEL DAVID: Yeah, and look, I think in fairness, a lot of our member funds actually do provide that service, and I was disturbed to hear that the offshore call centre was where this person and where this patient wound up. I mean, really, we need to do better than that. But you know, I come across a number of people every day working for health funds who spend, you know – and at the executive level – who do get directly involved in case management of this sort and try and help people navigate the system. And we should be doing- but that should be the default position that the funds offer.
MICHAEL ROWLAND: Okay. We’re about to enter into this annual charade – and that’s what it is – about premium increases. The funds will ask what they want; the Health Minister will decide. As we get to the premium increases for those with health cover next year, Rachel David, how much above the 1.6 annual inflation rate will they be paying?
RACHEL DAVID: Well look, we have over 13 million Australians reliant on private health to get timely access to surgery, dental care, and mental health care. So we actually don’t want to put premiums up by a single dollar. The reason that premiums go up is because health funds are paying for more healthcare in claims. We have a large population now – the Baby Boom population that has reached the age of, what I call, peak surgery. They’re requiring more treatments than ever before, and including more sophisticated and expensive implants. And that’s essentially what we’re paying for. So what we do with the federal Government is we need to work through all the areas where there are wasteful or overly expensive claims that can be managed down. And this is not to say that we’re not keen to pay claims. That’s absolutely what we’re in business for, but there is waste in the system the same as there is in the public side. A lot of that is down to regulation, and that’s why we need to work with Minister Hunt on keeping premiums as low as possible.
MICHAEL ROWLAND: We’ll see what emerges from that process and we’ll undoubtedly chat more about it at the time. Rachel David, thanks for coming on to News Breakfast this morning.
RACHEL DAVID: Thank you.
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