Private health sector peak bodies have slammed the proposal of a “hardship package” by the corporate health insurance industry as failing to address the serious viability challenges of Australia’s private health system.
The peak bodies, which include the Australian Private Hospitals Association (APHA), Catholic Health Australia (CHA), and the Medical Technology Association of Australia (MTAA), have criticised the proposal being floated by the corporate health insurers as a smoke and mirrors tactic.
The organisations say this is a blatant attempt by insurers to avoid their public-good obligation of returning a minimum of 88 cents in the dollar of their customers’ premiums. The organisations also consider Private Healthcare Australia’s (PHA’s) claim that further cuts to life-saving medical device benefits will improve hospitals’ viability is false.
Analysis from the independent Nous review, commissioned by the Department of Health and Aged Care, revealed savings of approximately $290 million in medical device benefit reductions between July 2022 and June 2024, and health insurers have failed to honour their promise to pass on these savings to customers, the peak bodies said in their statement.
“Instead, insurers have redirected these savings to themselves through increased profits and management expenses, including executive salaries, bonuses, luxury office spaces, and marketing budgets,” their statement said.
The peak bodies said they consider this failure yet another example of a troubling pattern of behaviour from health insurers, aimed at transforming Australia’s private health system into a US-style managed care model, in which a few insurers control private hospitals, limit patients’ choice of doctor, and dictate which medical devices doctors can use in surgery.
Katharine Bassett, CHA Director of Health Policy, said the Prescribed List is not the place to look for more savings.
“We’ve already seen significant reductions in benefits paid for medical devices, yet those savings were not passed on to patients. Instead, insurers pocketed the difference,” Dr Bassett said.
“It’s clear insurers are prioritising their profits over patients. The way we fund care in the private sector needs to be reformed so private health insurers can’t continue to siphon money away from hospitals and patient care.”
FULL STORY
When Insurers choose, patients lose: Peak Bodies (APHA, CHA, MTAA via CHA website)
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