Station: 6PR
Program: Breakfast
Date: 16/5/2022
Time: 6:07AM
Compere: Gareth Parker
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


GARETH PARKER: If you feel that you are still getting value out of your private health insurance. There’s a couple of reports this morning. One is that many Australians are considering dropping their private health insurance policies because of rising costs, they don’t feel like they’re getting good value for it. But equally, the private health insurance industry are saying: well, what if you could use your private health cover to help pay for some of the out-of-pocket expenses associated with a visit to the GP? Dr Rachel David is the CEO of Private Healthcare Australia. She joins me on the program. Rachel, good morning.
RACHEL DAVID: Morning Gareth.
GARETH PARKER: So, what do you want to happen here?
RACHEL DAVID: Well, look, I think what we need is a review of the Medicare system that has served us really well and is an essential part of Australia’s health system. It’s served us well for many years, but now, when it comes to out-of-pocket costs, which people are incurring out of hospital, particularly when they try and visit a GP, it’s actually preventing them from accessing the doctor and getting some of the care they need. The private health funds are an extra source of money for GP’s, potentially. And GPs should be the most important people in our health system – they’re the gateway to the health system, and they can potentially engage in a lot more work than they currently do, but they’ve been hopelessly underfunded.

So, we’re now seeing a situation where, you know, in previous years, most medical students who graduated would’ve gone into general practice…

RACHEL DAVID: … and it was considered a really vital part of the system. At the moment, only 15 per cent of medical students say that they want to be a GP. And even those who graduate and go on to be a GP find it so hard to make ends meet most of them have other side hustles that they’re involved in to try and make a living, whether it’s cosmetic surgery, or surgical assisting, or some other form of business. So that, for all those years they spent training, they can’t even use them to do what they want to do which is to treat patients and- with significant conditions and prevent illness. Because they just don’t have the same amount of funding through the Medicare system as medical specialists, or enough to keep the lights on.
GARETH PARKER: Okay. But how would extending people’s ability to use their private health cover fix that?
RACHEL DAVID: Well look, in a couple of ways. The first thing is we just need more money in the primary care side of the system, and private health insurance is one way to do that. It makes sense for the health funds because a lot of the preventive work that stops people getting sicker and going into hospital takes place, or ideally would take place in general practice.
RACHEL DAVID: At the moment, under the traditional rules for Medicare, health funds are actually banned from funding care out of hospital where there’s also a Medicare benefit payable. But I think it’s time to have another look at that. It doesn’t have to be tied to the Medicare benefit or the fee for service system, but it does make sense that general practice can start to access some of the funding. Because really, what we’re now locked into is a system where we have to wait for people to get really sick or need surgery before we can actually pay a claim.
GARETH PARKER: So, what you’re saying is that the health insurers would actually rather spend their members’ money up front on a cheaper GP consultation rather than spend it later when someone’s got really sick and need surgery?
RACHEL DAVID: Yeah, absolutely. And of course, if people do need surgery, we will continue to…
RACHEL DAVID: … pay what we already do. But it really doesn’t make sense that we are only able to contribute to that far end of the health system, when the end that really matters is, like, screaming out for funds.
GARETH PARKER: So, according to the comparison website Finder, the cost of health insurance is basically gone up 200 per cent in the last 20 years. They say that, increasingly, they reckon one in seven adults that they’ve surveyed are considering letting their health insurance expire this year.
RACHEL DAVID: Look, I’m a little bit sceptical about some of those surveys. Actually, what we’ve seen is seven quarters of growth in membership of private health insurance, which has particularly occurred during the pandemic. And a lot of that is related to the fact that people know that there almost catastrophically long waiting lists in the public hospital system, and that having private health insurance is a way of getting control over when you have surgery and who does it for you. So, we’re actually not seeing that play out in actual decisions and the actual numbers.

Over the last 20 years. I mean, that’s a long time. I mean, the last few years, premium rises have been kept at an absolute minimum – only 2.7 per cent last year – whereas health inflation overall, that is the cost of the health system, has gone up far more. So public hospitals, the growth in funding for public hospitals has gone up 6.5 per cent every year for the last few years. So in fact, yeah, it is a big expense, and I’d be the first to acknowledge that private health insurance is a big expense for a household, particularly when other cost of living pressures are going up. But we are seeing that people are committing to it, because if something does happen, the ability to get treated in a public hospital is not the same as it perhaps was before the pandemic.

GARETH PARKER: Rachel, thanks for your time.
RACHEL DAVID: Thanks, Gareth.
GARETH PARKER: Dr Rachel David, the CEO of Private Healthcare Australia.
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