Transcript
Station: ABC Radio Perth
Program: Mornings
Date: 21/08/2017
Time: 8:51AM
Compere: Geoff Hutchison
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia

 

GEOFF HUTCHISON: Let’s speak to Dr Rachel David from Private Healthcare Australia. Good morning to you.
RACHEL DAVID: Morning, Geoff.
GEOFF HUTCHISON: What do you make of Dr Gannon’s comments? He’s also said that he believes that there’s an orchestrated campaign by the insurers to deflect the blame from the real problems. That is a pretty damning accusation.
RACHEL DAVID: Look, I think we need to focus on what the underlying issue is here for private health, and that is that health costs have relentlessly continued to rise well above inflation over the last decade, and well above household incomes over the last decade. And in those costs, we include costs of hospital accommodation or treatment in hospital, costs of covering the gap for doctors and health professionals, and costs of covering medical devices. Health funds have very little control over those input costs, but what health funds can do and have done in response to consumer demand for a cheaper and more affordable product is to offer some products with exclusions and excesses which are appropriate for a life stage. So younger people may not be in a position to pay for an array of conditions that occurs when they’re older, and older people may not want to pay for conditions or for treatments associated with pregnancy or IVF, for example.
GEOFF HUTCHISON: Okay, they’re interesting examples. Now, to start with, I would always expect you to say that the costs in this sector have gone up enormously, that is always the first line of defence from those in private healthcare. But the accusation is that these policies have been deliberately confusing, and the observation that patients are sick and tired of finding out when they’re sick that their insurance isn’t good enough. Do you accept, does the industry accept, any responsibility for that confusion?
RACHEL DAVID: Look, we absolutely accept responsibility for the fact that we can do better at helping consumers to choose their health insurance and navigate the system. I categorically refute the suggestion, however, that health funds have deliberately made the system confusing. The health system itself is complex and the affordability of the health system as a whole is getting more and more difficult for consumers to navigate. So products with exclusions have been introduced directly in response to consumer demand for a more bespoke product that’s appropriate to their life stage. It’s not something which health funds have designed to confuse people. The idea that health funds would do something to drive away members and reduce participation is- it’s very perplexing to me.
GEOFF HUTCHISON: Dr Rachel David, then clearly there is an image problem, because wider people tend not to believe what you’re saying here. This is a Michael Gannon observation: Why is it that someone over the age of 60 may find that when they need their hips or knees fixed the policy has excluded them, yet retained them as a suitable candidate for maternity care?
RACHEL DAVID: Look, I think it’s important that we all, as participants in the private health sector, work harder on ensuring people actually purchase products that meet their needs.
GEOFF HUTCHISON: Sure, but you’re not actually addressing that question. In fact, I almost expected you to refute that with a no that doesn’t happen.
RACHEL DAVID: No, well in some cases it does happen. But we do a lot of market research in our sector, and perhaps just in the last 12 months we’ve surveyed about 16,000 consumers at least, and overwhelmingly their concern about private health is the rising cost of premiums, number one, and number two is the rising cost of medical out of pocket costs. So to meet that initial need of affordability, health funds have attempted to create more affordable products. That means there’s more products available, and I think at this point it’s clear there is an issue with some people perhaps not choosing something that’s meeting their needs, and we’re working with the AMA and with the Federal Government on ways to make that process more transparent and easier for consumers at the point of purchase.
GEOFF HUTCHISON: Don’t we need you to convince us that when I say something- when you say we do not deliberately set out to do this with any policies, and then I quote you an example of someone over 60 might need hips or knees fixed, gets excluded, yet retains- yet is considered a suitable candidate for maternity care, you kind of brush that off to me. And yet, if you accept that that is the truth, then what is that? You know, what is a policy that denies people the thing they need most and then offers them something that patently is inappropriate for them?
RACHEL DAVID: Look, we can’t force consumers to buy a particular product, particularly if it’s unaffordable and they’re already struggling to meet other costs. What we can do is provide them with better information at the time that they purchase the product. And one thing we are looking at is the queuing and the classification of products into gold, silver, bronze and basic so people know at what level they’re covered, and that’s easier.
GEOFF HUTCHISON: Now, that’s what Michael Gannon wants. Michael Gannon wants that. Is it possible to organise something- really, now that would suggest a level of simplicity that our audience would absolutely love if it was actually as clear and as simple as that. Can it be done?
RACHEL DAVID: Look, it is complex, because what we don’t want to do is start pushing people who have an appropriate product towards something more expensive if that’s not what they need. But we’re very close to being able to make an announcement on this, and probably by the end of this year – and I can’t put words into the mouth of the Federal Government or the Federal Minister – but we’re confident that by the end of this year there’ll be some sort of an announcement around this that we can commit to so that we will start to see that classification of products. And I think almost more importantly the health funds have agreed to standardise the terminology that each fund uses to define the product, so that if you are talking about a heart condition being excluded from one fund, it means the same thing if it’s excluded from the other fund, so people can compare apples with apples. We’re also looking at an increased investment in the Government’s comparison website – privatehealth.gov.au – to make that easier for people to use, so they can get a more comprehensive view of the products available and what might suit them.
GEOFF HUTCHISON: Do you accept, Dr Rachel David, that the very reputation of private healthcare and what it offers and what people have to pay for it is absolutely at stake at the moment?
RACHEL DAVID: Look, I really understand the public’s concerns, particularly as health costs continue to rise. What our research shows – and this is of over probably 10,000 consumers – is that people that have private health insurance for the most part value the product and want to keep it and will give up other things; particularly those who have had it for a long time will give up other things in order to keep it. We can’t go down the path of continuing to devalue the product of health [indistinct]. I totally agree with that, and we have agreed by putting considerable resources into reforming the ease of use of the system. So we’ve already committed resources towards delivering gold, silver, bronze that, you know, things could be improved at the consumer level.
GEOFF HUTCHISON: Thank you very much for talking to me, Dr Rachel David.
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