20th Nov 2017

Government needs to act on its promise to review health fund costs

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Leon Della Bosca

Health funds are reaping massive profits from Australian consumers, with the cost of members’ premiums rising faster than the amount paid in benefits by insurers.

The latest figures from the Australian Prudential Regulation Authority (APRA) reveal that in the past year (to September) premium revenue totalled $23.3 billion, while benefits totalled $19.7 billion.

Health fund net profits after tax rose to $1.43 billion – up by 4.8 per cent.

“These figures might be healthy for health funds’ bottom line but they are not great medicine for private patients who not only face higher premiums but also a five per cent jump in out-of-pocket costs,” said the Consumers Health Forum Chief Executive, Leanne Wells.



“These gap charges, not covered by funds, for medical services in hospital, averaged $299 for hospital episodes and were in addition to any excess or co-payment amounts relating to hospital accommodation allowed for in policies.

“And patients often incur multiple out-of-pocket costs when a medical procedure requires a number of specialists. The provision of a single quote would be ideal but is not consistently done. This adds to the bill shock for consumers. 

“There has been an even more dramatic jump in medical gap costs when doctors bill extra.  These rose to $153.85, up by 19.3 per cent in the 12 months to September, the APRA figures show.”

The figures show that Australians are paying more than ever for health insurance and out-of-pocket expenses to doctors and health professionals, prompting calls for the Government to make good on its promise to follow through on its out-of-pocket expenses project.

“The Health Minister, Greg Hunt, has promised the Government will establish an expert committee to ensure a collaborative approach in determining the best model to make information on out-of-pocket costs charged by doctors more transparent and to help consumers with private health insurance better understand out-of-pocket costs,” said Ms Wells.

 “The Consumers Health Forum is calling for a mechanism to make doctors’ fees much more transparent and open to comparison. We propose some form of independent and authoritative website which lists specialists’ fees and ultimately their performance data so that patients can make an informed assessment.  Modern information technology makes such a service feasible.

“We agree with Mr Hunt who says making doctors’ out-of-pocket costs more transparent will allow consumers to compare doctors’ fees more easily and make an informed choice knowing the expected out-of-pocket costs.”

The Government has pledged funding of $1.1 million to establish a committee that will review best practice models for improved transparency of medical fees and costs.

“Mr Hunt says the change is designed to improve consumers’ understanding of private health insurance and its value to them.  The Consumers Health Form wants to see health insurance made simpler and more certain for consumers to compare different policies easily,” said Ms Wells.

Do you think you pay too much for health insurance that doesn’t deliver? Are your out-of-pocket medical expenses unreasonable? Do you think establishing another committee to review these costs is a waste of time? Would you like to see action instead of more talk?

Related articles:
Health insurance boons identified
Private health reforms snub seniors
Managing the costs of healthcare





COMMENTS

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john
20th Nov 2017
10:32am
Pay $4313.00 dollars a year for private Medibank , it is never ever ever a fair thing. Medibank make profit , and pay executives , which in the health industry should be banned. What does a health fund do with the premiums when people don't use them all the time and when they do it is a complex cover that never ever makes up the difference, there is always something to pay. Like EXCESS IN MOTOR INSURANCE, THAT SHOULD BE ILLEGAL. We can't afford the $4313, but as you get older you have to have some kind of protection although Medibank doesn't save you any thing , it just might if your lucky get you your own picked doctor or specialist. We pay medicare which is a gov insurance , we should have everything else covered with the second insurance we pay for people who are in the private health system.
Without a doubt private health insurance is a money making operation , because all it counts on is getting money and lifting the premiums, that is why they probably don't care when some people opt out. But if enough do, or have to, they might start caring!
mogo51
20th Nov 2017
11:32am
So true John, but it goes further. They privatized Health care and just like every other public utility they have privatized, costs have gone thru the roof.
A bigger problem is the 'thieving' of the medical profession, total over servicing and over charging. I have had 3 major back operations. I saw the account sent to Medibank Private by the Private Hospital and Orthopeadic Surgeon - in excess of $90k plus lucky mean had to pay the Ortho another $10k 'excess'. After the operation he drove off in his Porsch - he did 5 similar operations during the day so go figure what his earn is every year - plus I was advised by a hospital staffer that he was on $1m p.a. retainer by the Private Hospital. If that is not being set up for overpricing/servicing, then what is????
Yes he studied long and hard for many years, but this is just armed hold up legalised.
GrandmaKathleen22
20th Nov 2017
11:39am
Mogo51, there is no need for surgeons to do that. It is greed.
I just had a procedure and it was fully covered but my specialist is not greedy.
Knows-a-lot
20th Nov 2017
3:35pm
There needs to be a Royal Commission into the insurance industry, and another one into the whole medical sector. Both are dominated by rapacious greed.
Tzuki
20th Nov 2017
6:20pm
We have Gold cover with Bupa but when my husband needed a procedure which was just a 90 minute procedure in a hospital, the specialist needed $500 before we even got into the hospital. Then we had to pay $250 excess! What a rip off!
marto
20th Nov 2017
11:21am
Well said john but if people keep paying they will keep charging you have two options get out or pay up and shut up
johnp
20th Nov 2017
11:31am
I assume Marto doesnt bother with private health insurance - that right ??
Although I am in private health fund (Westfund) I believe I am being ripped off even though I have lower premium thru $500- excess
Any comments re the disadvantages of not having private fund ??
marto
20th Nov 2017
11:47am
yep you are exactly right john I do not have private health insurance had it many years ago but when we had one of our children attend the eye hospital for a condition he was in a room next to another child who had similar problem he paid nothing as his parents were in the public system but we paid an extra $1000 and thats when they lost us over the past 3 years I have had a knee done and two wrist operations cost nothing and got it done by my specialist he does both private and public patients yes it took a little time but that was not a bother to me these companys use scare tactics and a lot of people believe them after all do most people insist on their own doctor to do the procedure as far as I am concerned they are a con and the boofheads in canberra allow them to fleece people all I can say is CAVEAT EMPTOR
thommo
20th Nov 2017
11:36am
This LNP Govt (Labor is no different) has let us all down regarding these health funds, who just keep on ripping us off. Why, because they are part of the big end of town, and the govt looks after them. These membership increases are now so big I can't afford them anymore,and I will not be renewing mine next year. If I get sick, i'll just go to EMERGENCY at the local hospital and if necessary, the govt can pay for my stay in hospital.. see how they like that.
Knows-a-lot
20th Nov 2017
3:37pm
The Lieberal-Hillbilly COALition have let Australia down every way you can imagine. Worst hit are our poor, and pensioners. A pox on them!
johnp
20th Nov 2017
11:37am
That is disgusting re the Orthopeadic Surgeon - totally unacceptable !!
GrandmaKathleen22
20th Nov 2017
11:37am
My GP told us that the government has told doctors not to refer patients for many checks like scans. They are forever tightening the health budget and people do not even realise.
We are happy with our private health fund. It is $245 a month for both of us and it is for top hospital and top extras. It is very much worth it to us.
Crafty
20th Nov 2017
12:05pm
We were paying $264 a month for mid hospital & extras cover. Who are you with?
GrandmaKathleen22
20th Nov 2017
3:29pm
Health Care based in Tasmania. I chose them because there is no excess for day surgery and so many procedures are now day surgery.
Jennome
20th Nov 2017
5:22pm
Similarly with HCF, no excess for day surgery and $250 for first hospital admittance of the year. I have no complaints, I have Top Hospital and it has covered almost everything involved in my various Pancreatic Cancer op and ongoing treatments. It covers my weekly chemo treatment in a private hospital, and weekly visits to my oncologist, although he bulk bills most of the time. Probably being on an OA pension helps too. HCF doesn't seem to operate in Victoria, don't know why, but I joined when living in NSW and have kept it on. Hope they don't try to kick me out, although I doubt that's allowed!
Tzuki
20th Nov 2017
6:23pm
GrandmaKathleen22 you are always commenting but never tell us who you are with. Please be kind to us and tell us youe Healthcare provider name??
Greg
20th Nov 2017
10:15pm
Tzuki GK22 did tell us at 3.29pm "Health Care Insurance"
Bonny
21st Nov 2017
7:18am
Many doctors were using scans and tests instead of spending time with their patients working out what was really wrong so it is a good move by government.
MICK
20th Nov 2017
11:41am
As Gomer Pile used to say "surprise, surprise, surprise". Golleeeeee.....
My wife and I have always had good health and have not been in this casino. It is of course a lottery but I see no point in this deceitful game run by the Health Insurance Industry which preys on its contributors and tries everything to refuse payment. A well worn model used by the insurance industry.
The day people leave en masse will be the day the industry stops taking the dough and giving zip in return when people need help.
Avoid this industry. That is what we are all supposedly paying taxes and a medicare levy for.
Rickrick
20th Nov 2017
11:47am
I'm in a members own health gmfundnthst return at least 95% of premiums to members in payouts
I have just had two procedures in two different private hospitals and all it's cost me in out of pocket cost is $450

Very glad I dumped my privately owned und where one of those procedures cost me at least $1500 out of pocket a few years ago
Old Man
20th Nov 2017
12:25pm
Of course health funds are ripping us off. The various governments aren't helping the problem either. The game that is played each year when health funds want to increase premiums well in excess of CPI is ludicrous. The Health Minister of the day pretends to argue with the health funds to scrape back a couple of decimal places so both groups can trumpet how good they are, the Minister is looking after our interests and the health funds are listening to the public.

The truth is out there but we, the great unwashed, are never privy to the truth. As has been said here time and again, the actual increase for a member can be as high as 13.4% although the fund advertises an average increase of 4.1%. We need transparency from all parties to this rort, starting with the Minister. The range of proposed increases should be shown, not the average, with an explanation as to how the figures were arrived at.

In our case, we are in a plan that is no longer available for new members and I'm sure (not with proof) that we are being targetted to make us change to a cheaper plan. A cheaper plan has been investigated but none of them give the benefits that our existing plan allows. We, of course, have the option to walk away but we have reached the age where things are starting to wear out and we are not prepared to get onto a public hospital waiting list. At our age, pain should be got rid of as soon as possible, not at the whim of whatever government is controlling our public health system.
MICK
20th Nov 2017
12:42pm
As always VOTE WITH YOUR FEET OM. Yeah, some folk are captive but many are not.
To change a bad system you bring it to its knees. Sadly the reason why we continue to have bad government is that people find that too difficult. So the game goes on.........
floss
20th Nov 2017
12:35pm
The LNP. represent and are supported by the so called professional type people that are ripping off ordinary people and if you expect the LNP. to upset them you are very naïve .
Old Man
20th Nov 2017
12:53pm
Your observation, floss, would be acceptable if during the 6 years of Labor that health funds didn't ask for an increase in excess of the CPI. History shows that labor caved in to the health funds just the same as the present government.
Knows-a-lot
20th Nov 2017
3:40pm
The LNP scumbags are worse than the ALP in every respect.
Not a Bludger
20th Nov 2017
12:52pm
So long as private health insurance is, essentially, voluntary the cost will be high.

If the cost is to be minimised, private health insurance must be mandatory for all.
Rae
20th Nov 2017
2:34pm
You mean like the medicare levy.

That should have been enough in a universal medical system.

Unfortunately Howard stuffed that up and there is no going back.

Public hospitals with public doctors and nurses would eliminate the need for porsches and Cayman Is accounts.
GrandmaKathleen22
20th Nov 2017
3:32pm
I agree. Many wealthy people are using the public system and paying nothing. When I do that my health fund contributes an amount to them even for ER day care. A nominal fee at least would be helpful.
Not a Bludger
20th Nov 2017
3:54pm
No Rae, it was not Howard who stuffed up private medical insurance.
It was Whitlam in 1974 and Hawke in 1984 who did, between them, destroying what had been an excellent private insurance system - even Pharmacy costs were tax deductible.
You may also recall that Hawke also broke the then excellent and entirely free universal Queensland Hospital System.
KSS
20th Nov 2017
1:45pm
SeekMedi is a comparative website set up by Sydney GP Dr Richard Zhu which allows both GPs and the public to search for the fees of individual doctors and specialists for the initial consultation. Here is the link:

https://www.seekmedi.com/about/

This was a GP lead and initiated website. Dr Zhu literally sat and made phone calls himself to get the costs. This website is designed to reveal all consultation fees of medical specialists, surgeons and allied health, so the general public have more confidence about the fees (especially the out of pocket expense) they shall face when seeking medical help.
If a single GP can achieve this, why can't the Government or even the medical colleges including the AMA take it and make it so it also includes indicative costs for specific procedures?
George
21st Nov 2017
4:02pm
Agree, KSS, The Govt can easily set it up with or without AMA. It is badly overdue and there is no excuse for not having one - a website containing both Fees and Peformance Feedback from patients.
almost a grey hair
20th Nov 2017
2:02pm
Not a bludger, just as a matter of interest we already have compulsory health insurance wether you use it or not its called MEDICARE. the problem with it is some people have to pay more than others, someone who earns nothing pays nothing, those on $150K pay a lot more whether they use the service or not. Also if you have an op in a private hospital and something goes wrong you are immediately ferried to a public hospital where they have the facilities to deal with it. I think half the problem is the medical profession itself ripping off the system and the other half of the prob is government mis management like everything else they manage
marto
20th Nov 2017
2:06pm
How refreshing to hear your comment
Knows-a-lot
20th Nov 2017
3:43pm
"... the problem with it is some people have to pay more than others, someone who earns nothing pays nothing, those on $150K pay a lot more whether they use the service or not."

This is not a "problem", it is just and fair. Pay according to one's ability to pay.
Knows-a-lot
20th Nov 2017
3:30pm
Medicare (public) or Private insurance? You're screwed either way.
Knows-a-lot
20th Nov 2017
3:31pm
Medibank (sorry).
floss
20th Nov 2017
3:56pm
OLD MAN the LNP are in power at this time so they are to blame for now.
floss
20th Nov 2017
4:00pm
NOT A BLUDGER as I have said the LNP. are in power so they can fix the problem how thick are you.
KSS
20th Nov 2017
5:55pm
How rude are you?
heemskerk99
20th Nov 2017
7:41pm
not as thick or prejudiced as you old flossy, just go back to use a toothbrush instead of flossing, it might work by also clearing your brain, love it when labor members, the likes of flossy, knows-a-lot, better known as a know-all and labor micky etc forget the huge increases wich were granted to these health funds while labor was in government by our great spender rudd and our first female prime minister gillard and started what is now a deluge, the only way out of this mess is for everybody to go on medicare as I did several years ago when I was confronted by the choise of government or private insurance and yes I had to pay a premium for opting medicare yet it has repaid us times over.
Dot
20th Nov 2017
9:47pm
Have been with same private health fund for over 55 years. Firstly as a youngster under the family package then when I got married 52 years ago still with the same mob. If it wasn't for my husband I'd ditch it in a second. I've observe that over the past twenty years thousands have entered Australia how many of those have private health cover or are they all free loaders.
musicveg
21st Nov 2017
12:11am
I am interested has it been worth paying all that money for over 55 years instead of putting it in a bank?
Rae
21st Nov 2017
7:00am
I'd have to say no to that music veg as I've done the same as Dot and the only twice I needed to use it was told I wasn't covered.

Once was a test for a child showing blood in urine and needing a $1800 test the other was a skin cancer needing surgery at the specialists rooms. Not covered.

I regret not putting all that money in an account now.

I believe they are forcing prices up now to get boomers out of the system just as they need it.
musicveg
21st Nov 2017
12:13am
If Australia keeps getting ideas from USA many will soon not be able to afford any medical care insurance. I cannot afford it already.
ex PS
21st Nov 2017
9:03pm
We are quickly reaching a point where it is just not cost effective to be in Private Health Cover, one more increase will probably see us self insure.
I can not understand why, if health services are stretched to the limit I have to have a blood test every six months just to get my script issued. My test hasn't shown a negative result in 15 years.
Olddog
21st Nov 2017
11:39am
We would still seem to be better off than America. Talking to an American retiree when we visited there 5 years ago and comparing countries he said he was paying US$9000.00 per year for health insurance.
Rainey
21st Nov 2017
3:29pm
Yes, the US system is bad. But that doesn't make ours good, and we are moving toward the US system - rapidly! We had a great system when I started work. Successive governments couldn't leave It alone, and every change made it worse.
Rainey
21st Nov 2017
3:30pm
Cancelled my health insurance years ago as ''bad value'' when I discovered I was paying for the privilege of paying through the nose for services others got for free. Yes, I'm freeloading and I don't like it and I don't approve of it, but I can't afford the luxury of paying when the system is so disgustingly bad, unfair and corrupt. Sorry!
almost a grey hair
21st Nov 2017
4:39pm
I agree entirely, it seems that some people even when they are in receipt of some sort of welfare still expect to ride for free. We surely must come to an arrangement whereby the user pays, or when you leave a Centrelink office your arms shrink and your pockets grow longer.
George
21st Nov 2017
3:47pm
Nothing wrong with having a Review, however it must be serious and hard-focused. Even the Consumer Health Forum needs to go much harder and not just ask for tools to make comparisons when all of them (Insurance companies, Medical Specialists) are setting similar prices and ripping off customers anyway. Private Health Insurance reform must include:

a. All Medical Costs to be 100% covered (including Pharmaceuticals and Out Patient services), with only 15% of Scheduled Fees to be paid for by patients. Insurance companies must not be allowed to exclude coverage based on excuses such as they can't cover Medicare Gaps, etc.

b. Doctor's fees MUST be regulated - say not to exceed Scheduled Fees by more than say 25% - and latter only allowed IF they accept being put on Govt-controlled Comparison Websites which should compare fees and performance feedback from patients.

c. Premium increases by Insurance companies MUST be limited to CPI only.
Rainey
21st Nov 2017
4:05pm
Privatisation has proved a great success, hasn't it Malcom? We have unaffordable health cover. We have unaffordable electricity - with prices skyrocketing. We have people confused and stressed over which service provider to use for what and how to get the best deal. Geez... it used to be SOOOOO simple. You paid the local County Council for power at a fixed price that was genuinely related to the cost of production and distribution, and was highly affordable. You paid into a health fund that actually covered most of your costs and the contributions were very affordable. You paid a small fee for annual ambulance cover - directly to the state ambulance organization. Which idiot decided that letting private companies reap billions in profit for ripping off the public for essential services was a good idea?

Oh, I guess an idiot who thought along the lines the great Malcolm is thinking now - that giving huge tax cuts to the rich will somehow reduce the deficit!!!! Of it's a bit of a sleight of hand, isn't it? Because he's putting the medicare levy up before he supposedly cuts taxes. No doubt the wealthiest will come out with more in their pockets, and the battling middle class and upper working class will cop it in the neck - as is the usual pattern under this government. Their ethos is throw a few miserable crumbs to the poor and whinge like hell about having to, and feed the greed of the wel-off generously. The poor old struggling worker will keep footing the bill. You know... the guy who doesn't vote LNP. Why care about him?
musicveg
21st Nov 2017
4:12pm
Spot on Rainey, life was a lot simpler before privatization, who does it benefit? Certainly not my mum who just stays with the same providers of everything because she finds it too stressful to change to a so called better deal. Even if I offer to help she can't be bothered.
And the stress of choice is making people unhealthy, confused, stressed out, and the time wasted on phones and internet, when everyone could better spend their time. The rich keep finding ways to make more money without considerations of any sort, whether it is ethical, good for the environment or people in general.
heemskerk99
21st Nov 2017
7:29pm
what a lot of rot......... some of these comments turn out to be!
it used to be soooooo simple, in those times we used to have outside dunnies, remember the redback spider, our worst worry was hoping the man would empty the can before it overflowed, my job was to dig the hole in the backyard if it looked like overflowing, our air condition used to be a hand held fan made out of the newspaper, our showers used to be from wood chipheaters to warm the water, we cooked our meals on a wood stove, brewed our own cup of coffee, grind the beans ourselves and if lucky you had a perculator, very modern for these times, washing our clothes was done in a copper fired by wood we had to cut and gather ourselves and if lucky you had a washing board and mangle, everybody used to pay a percentage of their wages for health insurance, no if's or but's, we all paid a yearly charge for the ambulance, nobody I ever knew got stressed out, confused or lost sleep over this and nobody ever wasted any time on phones or internet, it is soooooo simple, don't blame everybody else just blame yourself for voting these party led imbeciles into govenment, not just to-days government, after all they inherited the rudd's and gillard's harvest now better known as the worst government ever to be unleased on Australia,
maybe labor's mouthpiece rainy can explain how it is malcolm who privatised the health insurance industry as it has been privatised for many, many years, I am no supporter of mal, however rainy when writing comments in these columns at least don't write LIES.
ex PS
21st Nov 2017
9:09pm
How amusing, right wing acolytes still trying to blame the previous government because their High Priests can't deliver what they promised.
Does this mean that when Labor gets in they get a four or five year grace period where they get to blame the previous government for all the problems that Australians face?
If they do, this country is doomed because they will achieve as little or even less than this current mob of incompetents has.
Rainey
21st Nov 2017
9:29pm
Precisely, ex PS. This government CLAIMED they could fix things. All they've done is blame and make weak excuses. It's not Labor's fault that after all the time these fools have had, they've done NOTHING to remedy anything, but EVERYTHING to make things worse.
musicveg
21st Nov 2017
9:46pm
Settle down heemskerk99 I wasn't talking about that far back, I merely said before privatization in the early 1990's started by the Kennett government I believe, correct me if I am wrong.
Rainey
22nd Nov 2017
9:43am
heemskerk must be really old! I am old - probably older than musicveg's parents - but we had an inside flushing toilet for most of my life. I holidayed on a farm once where they had the outback dunny with a can that was collected, but even they got septic when I was very young. Gran had a toilet out back of the laundry and you had to go outside to get to it, but it was attached to the house and did flush.

Yes, we had a chip-heater to warm the bath water at Gran's. Our place had electric. The chip-heater was wonderful. It warmed the bathroom beautifully on a cold day, and in summer it was rarely needed because the sun hit the pipes and warmed the water naturally. Gran put electric in when she got too old to cut wood. She could have had it decades earlier. She just didn't want it. Nor did she want an electric or gas stove, though she got one when she was about 60. Refused to have the wood stove removed though and kept using it because it heated the water for the kitchen and it kept the house cosy. One house I rented after I married had a wood stove and I loved it. Soups and stews simmered slowly all day long - sometimes for a couple of days. Nothing cooked on so-called ''modern'' stoves equals the taste.

Air conditioning was via lots of louvre windows - a fabulous innovation that has been revived because people finally figured out how efficient they are.

As for blame - one can hardly blame voters. It's not as if we've had much choice really, and when we do - rarely - get a good one, look what happens! They are bullied and badgered and pushed out, maybe just for having a British-born granddaddy, despite having served their country in uniform and demonstrated great commitment.

Rudd and Gillard were duds. I'll grant that. But they were nowhere near as bad as many of their predecessors, and they certainly didn't start the process of decline. They actually didn't do too badly at all steering us through a the GFC that was much worse in other countries. And right now, I'd definitely prefer them to the cruel over-privileged morons who can't think past ''feed the rich man's greed endlessly, and screw and blame the less advantaged at every turn''.


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