Private Health Insurance
Allen Consulting Group visited the AMA recently in the course of conducting a review of gap cover schemes and informed financial consent at the request of the Department of Health and Ageing.
Two of the questions they wanted answered were ‘are gap cover schemes inflationary on private health insurance premiums and has there been improvement in the incidence of informed financial consent?’
If the Government wants private health insurance premiums to cover medical gaps whichwere previously paid out of patients’ pockets, then it will be inflationary on premiums. That doesn’t mean it will be inflationary on medical fees.
Many commentators, even those who should and do know better, equated increases in health fund medical benefit payments to patients to increases in doctors’ incomes.
There may have been a one-off effect as doctors took up gap cover schemes in 1999 and 2000. The proportion of private inpatient medical services provided under gap cover schemes rose from almost zero in 1998 to around 70 per cent after 2000.
Another 10 per cent of private inpatient medical services were billed at the MBS level so nearly 80 per cent involved no gap or in a few cases, a known gap.
These figures have been stable over the past four years. There probably is no lasting inflationary impact on premiums now that participation has reached a plateau. Doctors participating in gap cover schemes are effectively accepting the health fund’s yearly indexation as a condition of participating in the scheme and this adjustment is almost certainly below inflation. Maybe participation is deflationary!
Some argue that gap cover schemes are inflationary because they affect volume. Not being exposed to a price signal means people will demand more specialist inpatient services.
Having gone under the knife myself recently, I seriously doubt whether this is a good argument. Being hospitalised is not a pleasant experience and being a referred service, there is limited scope for patient initiated demand.
All things considered, gap cover schemes should not be a reason for premium increases and this is what we told Allen Consulting.
On informed financial consent (IFC), a lot of progress has been made in the past 12 years.The first Federal Council resolution on this matter was in 1988 but it was in 1993 that the AMA really began to pursue this issue.
Federal Council resolution number 08/93 stated: ‘It is prudent to inform the patient of medical fees to apply, wherever possible, in advance of the service being provided’. This humble statement signalled the start of a campaign which has been pursued by every Federal President of the AMA since Dr Brendan Nelson penned it.
Recently Federal Council passed a further resolution calling on the admitting medical practitioner to take on an IFC role in relation to other medical practitioners involved in the episode of care.
If that practitioner was not able to actually provide IFC, then he or she should make sure the patient understands there are other practitioners involved and give the patient their names and contact details.
We recently agreed with the Private Health Insurance Ombudsman that medical practitioners have a vital role in informing patients of the respective benefits paid by health funds for private inpatient medical services.
The doctor’s advisory role did not extend to encouraging a patient to leave one fund and join another. Nor was it appropriate ever for a doctor to exert any sort of pressure or compulsion on a patient to change health funds.
All these various policy initiatives and decisions by the AMA over the past 12 years are being incorporated into one comprehensive position statement on informing patients about the medical fees involved in providing medical care. It is hoped this will be passed by Federal Council in March 2006 after we have consulted the consumers, the hospitals, the health funds and Government.
Along with other initiatives to encourage IFC, it may lift the level of compliance to more than 90 per cent of all possible inpatient medical services which is close to the maximum level achievable. There should be no need for punitive legislation provided the profession shows good faith as it has for over 12 years now.
John O’Dea is Director of the Medical Practice at the Federal AMA
[Australian Medicine, Volume 18, Number 1, January 2, 2006, page 6]
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