Study blasts private health system

Investment bank analysis talks up public healthcare system.

Private health system blasted

Can retirees ditch their health cover?

A report by major investment bank Morgan Stanley says that Australia’s public hospital system is now so good that many people consider it as “adequate catastrophe cover”.

The report also labels private health insurers as lazy and says the belief that private insurance has eased pressure on the public system is a myth. It notes that recent multi-billion dollar state government investment in public hospitals has seen a big drop in waiting lists, with quicker elective surgeries and more single rooms on offer.

“The private health industry has become lazy,” said Morgan Stanley Executive Director Daniel Toohey.

“The Government should refuse any premium rises for three years to force the industry to sort itself out,” he told News Ltd.

The cost of private cover has risen 54 per cent since 2009, making it one of the most expensive annual bills and forcing 10,000 people a month to cut their private cover or quit completely. Membership has declined from 47.4 per cent in 2015 to 45.8 per cent in September.

Morgan Stanley predicts that health fund members will continue to quit or downgrade their policies, and says public hospitals will be able to cope with increased demand.

“Our analysis suggests that under a status quo scenario, the public sector could feasibly absorb the excess demand caused by an ageing population and falling participation in the private hospital sector,” the analysis says, according to News Ltd.

People who are grudge purchasers of health insurance “will be better off paying the Medicare Levy Surcharge than buying insurance,” Morgan Stanley says.

The investment bank researched private health insurance in order to advise its clients on stockmarket investments in health funds and public hospitals. It subsequently cautioned clients about investing in the sector.

Health funds made $1.4 billion in profits last financial year. At the same time, gap payments for some services, including surgeons’ fees in private hospitals, have risen by up to 20 per cent. Funds place the blame for the rise on the Government’s three-year Medicare freeze.

Global market research firm Ipsos supports the Morgan Stanley report, saying that the confidence of Australians in the public hospital system has risen by 10 to 15 points in the past decade to more than 80 per cent.

Private Hospitals Association chief Michael Roff argues that speedy quality care and choice will continue to be highly valued by its clients.

“In the public system, you don’t get to choose when you are treated, you don’t choose which doctor treats you and you don’t choose which hospital you are treated in,” he said.

“In the private system you do. And apart from the case of major trauma, you will always wait to be treated in a public hospital.”

Would you abandon private cover?



    To make a comment, please register or login
    Old Geezer
    28th Nov 2017
    No way as I don't want to operated on by a junior surgeon doing his first procedure or worse still his tenth with the senior surgeon reading the paper in the background.
    28th Nov 2017
    old Geezer, I had surgery with a private surgeon. A week later I had a lump at the point of surgery - had to go to the Public Hospital emergency. A young surgeon came down - she tried to put a needle in and draw out the blood. She said that is was in the operating theatre when I had my procedure- which she did. So you can never tell.
    28th Nov 2017
    My wife had her gallbladder out a few years ago. A private surgeon who works in the hospital anyway did the operation. Cost nix.
    You must want to live forever OG and at your age you should be going with the flow. Given you have not found a real lot of happiness I would have thought you might have been the last person to worry about who operated on you. Personally when its time to go it's time to go so why hang on forever?
    Old Geezer
    28th Nov 2017
    I certainly don't want second class treatment even at my age so I'm not about to go with the flow. I've seen what happens to those who go with the flow and don't want to be someone's botched up job.

    I am actually very happy with my lot in life and live life to the fullest having lots of fun.
    29th Nov 2017
    It was the junior surgeon who found the problem that had been causing me pain for 15 years. I'd seen dozens of doctors and surgeons over the years and even had an investigative operation and all of them failed to see what the junior surgeon recognized immediately.

    It was also the junior surgeon who diagnosed gall stones in a friend who had been flown - by the US navy her husband served in - all over the US and Canada to specialists who were treating her for food allergies. Agreed her symptoms were odd, but the junior got the diagnosis right.

    I'd much prefer young, enthusiastic and up with the most current knowledge than a jaded egotistical old fart whose major concerns are keeping his workload down, avoiding out of hours work, and pulling in dollars to fund retirement.
    28th Nov 2017
    All the top surgeons are in the public system.

    I have always had the best of care in public health when I needed it.
    Old Geezer
    28th Nov 2017
    Yes but you have to be lucky to get their expertise as you are more likely to get a junior surgeon instead.
    Old Geezer
    28th Nov 2017
    Also if you are a private patient in the public system then the surgeon must operate himself.
    29th Nov 2017
    What rubbish, OG! You will say anything to promote your far right views.

    I quit private health after two operations that cost a fortune - one of which was totally botched and had to be redone (in the PUBLIC system) and the other went okay but the follow-up treatment was hideously negligent and I suffered a lot of unnecessary pain, illness and distress. All the surgeon cared about was his fee!

    I had the botched surgery redone in the public system and the treatment was 1000% better in every way, and free. I couldn't believe the efficiency, and the fact that they followed up with phone calls every day for three days, then every second day, then every third for three weeks after to ensure I had no adverse symptoms. There was no follow up at all when I had surgery in the private system. I could write a very lengthy story about the neglect in the private hospital - starting with them losing my paperwork and keeping me waiting for 4 hours after the scheduled start time, then telling me I had to wait for my partner to come before I could have ice or a drink because there wasn't enough staff to supervise and ensure I didn't choke, then being left naked on a bench in the shower - told to wait for the nurse because I might be shaky on my feet, but I was freezing and after waiting 40 minutes, I just showered and dressed. Then the nurse shouted at me that I put her job in jeopardy by doing that!

    The problem in the private system was summed up by a nurse I know: They are all about PROFIT. She transferred to the public system because she wanted to work in an environment where it was all about the patient.
    28th Nov 2017
    Whoopee do. At last a bit of reality comes out rather than the Health Fund lobby pushing the sheep into expensive insurance.
    People have been wearing huge increases in premiums year in and year out. Now they are jumping ship.
    Not sure about the public system but I personally do not care about having my own doctor. If I want that I'll pay for it and still be way ahead.
    The health system has been a casino for a long long time. Good to see somebody calling it out.
    28th Nov 2017
    You are not guaranteed of getting the actual surgeon for the operation. It could be his underling and it often is. I never thought I would agree with OG but on this occasion he is spot on.
    You pay for your surgeon and anaesthetist and your hospital room when you have private health cover. You know who you will be getting and where you will recover.
    My cousin had the above experience and as a woman she was in an all male ward which was not very pleasant for her.
    Her procedure should have guaranteed her a place in a gynaecological ward but they did not place her there.
    This happened twice to her a few years apart.
    Why is there not more about the government reducing their contribution?
    It is up to the consumer to shop around amongst the private health funds and also to check out surgeons who do not want more money than that provided by Medicare and their fund.
    They do exist.
    28th Nov 2017
    When one does have insurance, one would hope that timely attention would be on the cards. Just this week, we saw the GP about a referral to a specialist. We cant see the specialist until March 1 of next year. That may not be the fault of the health cover but may indicate something is amiss in the health care industry.

    I agree that getting the surgeon you want and the related expertise. It goes down hard when the surgeon then charges twice the medicare rebate. There are problems in the system. Yes mam and yet having someone on L plates doing the surgery feels risky. Not every surgeon is a good one. There are infection rates and after surgery issues to consider too. Folks in the know manage to find out these stats as part of selecting a medical expert.
    Old Geezer
    28th Nov 2017
    Linda find another specialist instead. I do.
    28th Nov 2017
    Linda, find a surgeon yourself and then ask your GP for a referral.
    I have had two shoulder reconstructions, one in 2001 and the other shoulder in 2013, the first surgeon was excellent and that shoulder is very good. The second one is okay but I suspect the first guy was superior and he had the worse injury to deal with.
    You can also check reviews of surgeons. Ask others on relevant sites who is good.
    28th Nov 2017
    People pay less for insurance "in case they die".
    How about a simple insurance policy "in case I get seriously unwell and incur large medical bills".
    I'd be miles in front with the savings from private health cover.
    28th Nov 2017
    My husband recently had to go into Hospital by Ambulance as an emergency. So it was a Public Hospital they took him to - he had the best of care. As we have private cover we did elect for him to be treated as a
    private patient and he did get a single room. However the all of the medical team were excellent from the Physician himself right down to the junior Dr. and interns, plus the Nursing care was good too.
    28th Nov 2017
    Yes I will admit the public system has a bit of a wait time but my past experiences have been I have had the same surgeon and its been my choice as the high paying private system I cannot complain maybe its different in the city areas
    28th Nov 2017
    Recently during a revision of my financial situation, I realised that for 4 years I had paid private health insurance, while only using it once.(new glasses got 250dollars from ins.)
    Speaking to my fund on the phone, I was asked why I had not used the health insurance.
    Silly question I thought as I replied ."I have been healthy, and did not need it.".
    That prompted the idea that maybe struggling to pay private health insurance on the Age pension was a luxury I could no longer afford. So I cancelled the policy. After all, ,the roughly $9000 paid to the health fund in the last 4 years, could be better used in the Next 4 years by me.

    28th Nov 2017
    Reading this is interesting because as well as saying that us older Australians don't need health insurance, it infers that there is nothing wrong with the public health system. Why do we hear politicians constantly bleating about how the government (state/federal, take your pick) has run down the public health system to the point that Australians are at a high risk of dying before they can be seen by medical staff at a public hospital?
    28th Nov 2017
    I am seriously thinking about dumping my private health cover due to the exorbitant price rises that have taken place of the past 50 years, I recall paying around $6:00 a month in the sixties, I used to get all of the Money back that I used to pay at the doctors which was about $2:50 a visit and if I went to the dentist I also used to get most of the money back that I paid, if I went into a private hospital there were no extra's to pay. I now pay about $300 a month and that is after my 35% discount, that's well over 100 times more than I was paying in the sixties, the payout that I get on extra's is abysmal, I feel as though I am been ripped off, I have always felt that I needed the security of private health cover, recently I have had a couple of heart attacks and had to have stents inserted, when I went into hospital I was asked if I was coming in as a private patient I said I would be coming in as a public patient as I didn't want to pay any out of pocket expenses, my policy has a $500 excess for hospital, the hospital told me they would pay any excesses if I agreed to be admitted as a private patient which is what I did, I was in a ward with 3 other guy's none had private health cover, my only benifit was a free paper and free parking for my wife, which in our hospital as a pensioner we get 3 hours free parking. I think an enquiry into the cost of private health is long over due.
    28th Nov 2017
    You need to shop around for a better health fund. The one I use has no excess for day surgery. It is cheaper than others and pays out well on everything.
    29th Nov 2017
    Which fund are you with? I am with a not for profit fund peoplecare.
    I have tried iselect and I have done a fair ammount of research myself but have not come up with a better option.

    28th Nov 2017
    I gave up private cover a few years ago after spending tens of thousand on premiums I nver sa the benefit of

    I don't intend on getting sick to the point of being admitted to hospital , so I'm good
    Old Geezer
    28th Nov 2017
    Good just don't get cancer as my last bout of it cost nearly $100,000 most of which my health fund paid.
    29th Nov 2017
    OG I currently have and have had cancer, my Father in Law has cancer, We are both treated in the Public System at no cost and with excellent care and attention. In fact the private system missed it in my Father in Law and it was only picked up in the Public system. If you get cancer some of the best care is through the public system.

    Currently my Father in Law's Oncologist is both a Public & Private provider and there is no difference in care.

    As for your previous stuff about getting Junior Surgeons...where did your Snr Surgeon start at? And further no Junior Surgeon is allowed to operate without strict supervision unless it is a minor procedure. My Brother is a doctor in the NSW Hospital system and is fully aware of what goes on. Further my daughter was a scrub scout in theatre and had to hold the phone up for surgeons in the Private system as they talked about their meal dates, golf games etc while operating.

    Your bias is your right but don't slam great hospital staff in the public sector who do great things many times under great pressure.
    29th Nov 2017
    OG will say anything to promote the views of the far right. He doesn't care if there's any validity to it or not.

    A relative with four children withdrew from private health because it became unaffordable. I was deeply distressed when his wife was diagnosed with cancer because I thought he would regret his decision and it might bankrupt the family. Not so! He told me quitting private cover was the best decision he ever made. His wife got the exact same treatment from the exact same doctors, the same medications - everything was identical to what the privately insured received. But the privately insured paid through the nose and she paid nothing. So rest easy, Raphael, and ignore OG's biased and misleading rants.
    29th Nov 2017
    There's the kicker OG." Most of which the fund paid." In the public system there are no rules as to what they do and don't cover nor any gap payments or excesses.

    You may get a young doctor who may be brilliant. It's the luck of the draw public or private. In fact public institutions have very tough accountability requirements and it isn't about the profits.

    I do have private insurance but would consider not using it and using the public system simply to avoid thousands in excess fees simply because I had some weird insurance that is fraught with strange cans and can't.

    My income is all over the place due to market movements and if needed health insurance is at the top of my " Maybe I don't need this" list.
    Old Geezer
    29th Nov 2017
    Rainey you have been very lucky but I wouldn't want to push it any further. If I hadn't been privately insured I would have had to wait weeks for cancer treatment instead of being given it straight away. That wait would have cost me my life as the cancer was very aggressive. I had no out of pocket expenses as the health fund and Medicare paid the lot.

    Did you know you now have to pay for your drugs in the public hospital system? Medicare no longer pays for them.

    For the little it costs I'll keep my health insurance.
    30th Nov 2017
    OG, you are being untruthful. I know a great deal about treatment of cancer since a close family member suffered it. I started investigating and met hundreds who had experienced it or had lost loved ones to it. I also spoke to a large number of doctors and oncologists and nurses. NOBODY waits for cancer treatment in Australia. The government is very aware that time is of the essence in treating it and they ensure public patients receive all necessary treatment with no waiting times. You are either grossly misled by your health fund or just telling furphies again to push your right wing agenda.
    30th Nov 2017
    While treated as a public in- patient in hospital there are no fees. If you get treatment as an out patient or you get drugs on your release there is a fee but once you reach the safety net limit your fees either drop to around $7 per script if you don't have any kind of concession card (Seniors, Health Care, Pensioner, Veteran Affairs) or free if you do have a concession card. You do however pay for all your drugs when you are a private patient (unless covered by Vet Affairs).

    No health Insurance fees are little unless you are getting so called "Junk" insurance. Fees are a substantial cost out of your income unless you are very well off. Many who use this site and most pensioners are not that well off and the cost of private insurance is a great burden as well as the rising cost of excesses that are not met by insurance.

    You would have had to wait weeks for treatment? Did you approach the public system to find out or did you just immediately seek private treatment or your doctor referred you to private treatment. I suspect, and I may be wrong, that you went immediately to private and are only making comment on something you didn't find out about.

    With both my cancers I was seen within a week of diagnosis for treatment and all the people I meet have enjoyed similar rapid responses and I have met lots during both episodes. My dad died in the private sector with his cancer, yet my father in law continues to have a quality of life due to the public sector treatment.

    I know that both public and private systems have failures and nothing is perfect but Private Health Insurance is not a save all fixit nor does it seem to work very well these days for the benefit of it's customers.

    I feel the private system really has become more about profit taking for their investors rather than caring about the insured. But if you wish to continue paying and using those services I having no wish for you to stop but I do wish the system wasn't using my taxes to prop up the profits of your insurer & the many other insurers out there.
    28th Nov 2017
    Keep mine in Sth Aust as the Public System is so broken you have to wait for 4 days sometime to be admitted, that's through the ER. Elective surgery is a wait time of 5 years and so on. Thank goodness for Private Health.
    28th Nov 2017
    Yes, I agree. Persuading people to drop it is unwise. The more people in it the better the deals you can get.
    My sister has gone as far as saying she would stop eating ahead of dropping her private cover
    Of course that is a joke but if you are in one of the good ones and getting value which is possible if you research each of them using the government list of funds.
    We are happy with ours.
    28th Nov 2017
    I'd like to know how many of Morgan Stanley's staff are using our public system. Since when was the opinion of an investment bank to be trusted on anything.
    29th Nov 2017
    What a load of crap. Yes the public system is very good but it is a case of when they can fit you in and they are well and truly overly stretched at the moment. This is why we need private insurance. They are ripping us off big time and the government needs to regulate this more. They are doing nothing to help us keep theses costs down especially for pensioners who are less able to cope with these huge premium rises.
    29th Nov 2017
    I'm over being told I can't because the system is stretched. The government brought all these people in and doubled the population without ant building of extra infrastructure to cape with the increased populations.

    We are suffering and I'm damned if I'm seeing any benefit from excess people everywhere.

    Cutting taxes, increasing tax rebates and concessions and selling income producing assets was always going to structurally stuff up government revenues and services.

    This is quite deliberate. Howard took the opportunity the voters gave him to implement many of the fascist far right's wish list and now we have broken public institutions everywhere.

    The government isn't helping because it is part of their plan to privatise everything and ensure a supply of workers at the lowest cost to business.
    29th Nov 2017
    A friend had been waiting six months in pain for surgery. I saw my surgeon about another matter and mentioned that I'd also like his advice on whether I needed surgery to fix up my problem the same as my friend had. I was in no pain but it was annoying. 3 days later I had my operation with no complications. My friend had to wait another month only to have it botched up and redone not once but twice. Today she is still not 100%. I have no issues at all and in fact feel better for having it done.

    On My difference is I got the surgeon of my choice in a private hospital with no out of pocket expenses.
    29th Nov 2017
    How you do that is the miracle Bonny. Everyone I've ever talked to have had very large out of pocket expenses when using private insurance.

    Do you shop around or does your doctor tee up all the necessary medical. Perhaps the private hospital is owned by your fund.

    How do you access private health without a huge gap payment?
    30th Nov 2017
    I really can't believe a word of Bonny's right wing propaganda. I know too many who have experienced excellent care in the public system, and I don't believe anyone has surgery in the private system and avoids a gap fee. No insurer pays the full fee billed by private surgeons. Bonny's surgeon must be a relative doing a personal favour.
    29th Nov 2017
    I have experienced our Public Hospital system twice for emergency surgery and it is wonderful. My local hospital is Royal Prince Alfred Hospital in Camperdown Sydney. Both times I had the top surgeons operating on me at no time would they ever just put a junior Dr. to operate.
    29th Nov 2017
    You get incompetent doctors in both systems. Just more of them in the public system.
    30th Nov 2017
    Can't agree, Crimmo. I encountered far more incompetent doctors in the private system. I would struggle to name an incompetent I've seen as a public patient.
    30th Nov 2017
    We had top hospital cover but no dental, optical or extras - the premiums for dental and optical, compared with what you would be reimbursed, were too high. The government needs to bite the bullet and have a serious talk with the medical profession about the GAP. Despite top hospital private cover, we were left with a $12,000 gap for cancer surgery. No complaints about the surgery or the private hospital, but $12,000 when you are supposed to be insured??? I would far rather pay a much increased Medicare levy and do away with private insurance and private treatment. The public system is second to none and think of how much better it could be if tax payers were contributing a little more rather than paying the premiums of private insurance.
    30th Nov 2017
    And if you'd had no insurance, the exact same treatment would have been free, Elizzy. Wrong, isn't it?
    30th Nov 2017
    To be clear - not wrong that it's free for the uninsured. It should be. Wrong that the insured pay a huge gap after having paid a fortune in premiums.

    30th Nov 2017
    The government has done nothing to make the health insurance system work. They introduced a reward for joining early and retaining cover, but paid no attention to the fact that the high cost of rejoining blocks anyone who had to give up their cover during a financial crisis. Forced out by a period of little or no income, you are forced out forever! That really makes no sense when the government wants more people to insure. Then again, not much this government does makes any sense!

    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles