Private Health Insurance
The Truth Behind Health Fund Premium Spin
Under the banner headline ‘Health Cover Soars’, the Daily Telegraph recently announced that health insurance funds have applied for an average increase of 6% in health insurance premiums for 2006.
According to the article by Sue Dunlevy, this has been driven by an 8.7% increase in hospital visits by health fund members and an 11.9% rise in specialists’ gap fees. The reporter from the Daily Telegraph specialises in misrepresenting the behaviour of doctors, particularly specialists. But she writes good stories.
A couple of points are worth making. A 6% increase in what the health funds have asked for is lower than the average 8% increase, which has been granted for the last four years. We should all be pleased that the premium increase asked for is closer to AWE increases than it has been in the last four years. The key issue is whether the proportion of household expenditure devoted to private health insurance premiums shifts significantly over time. This is what will affect the participation rate in the medium term.
This appears to have been missed by the Daily Telegraph reporter. I suppose from our perspective the better headline would have been ‘Health Cover Premium Growth Slows’ and the article would go on to say that health fund rebates paid out to patients in respect of specialist medical services grew by 11.9% in aggregate but most of that is explained by the volume of medical services supplied (at least 8.7%), and only a tiny bit by the increase in health fund rebates paid out in respect of specialist fees.
Maybe it wasn’t missed by the Daily Telegraph reporter at all but she completely expediently realised that the story as written was much more interesting than the true story. It’s a question of whether the journalist is there to write the truth or write a good story. Good stories are going to win out all the time in my experience. As long as you know that you can work with it.
It shows the importance of being there giving your own version of events. This Federal Government does seem more concerned with the viability of private health insurance than private health delivery. The latter is the end and the former only a means to the end. What helps the public hospitals is the number of admissions into the private hospital sector, not the number of privately insured - although the two are correlated. The Government needs to realise this.
In the meantime, it is happy to collude with the private health insurers on a regular basis to put a spin on events so they portray the medical profession in a bad light and the insurers as mere victims. The next step is to give the insurers powers to lift themselves out of this oppressed state. This is the move the AMA needs to be very careful about. We fought the US-style managed care battle some years ago. Can it now come back now as a more sophisticated move to nudge the medical profession out of the driver’s seat?
The new CEO of the AHIA is saying that informed financial consent (IFC) is the most important issue in town and it cannot be resolved without big legislative sticks subjugating the medical profession into obedience.
The AMA has always accepted that we need to do IFC better but there is no need for draconian legislation. We have developed some good ideas for improving the incidence of IFC and the quality of it as well. It is sound commercial practice anyway. We are about to put these to the Government.
It will be interesting to see whether the Government goes with the payers or the providers on this one. It may signify the start of a bigger battle.
John O’Dea is Director of the Medical Practice Department of the Federal AMA
[Australian Medicine, Volume 18, Number 4, March 6, 2006, page 6]
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