MEDICUS FEBRUARY 2016

C O V E R S T O R Y

Continued from page 19 MANAGED CARE BY STEALTH

Australians pride themselves on their ability to access healthcare, regardless of postcode. Moreover, the system is set up to protect vulnerable populations – children, the elderly, lower income earners, and Aboriginal and Torres Strait Islanders. However restrictive measures such as the government’s MBS Rebate freeze, the (now-scrapped) GP co-payment, removal of bulk billing incentives to pathology providers, state and federal cuts to frontline health services and the trend towards quality and safety parameters in hospital-private health insurer negotiations create doubt about shifting costs. In August last year, a long-running dispute between the Calvary Group of hospitals and health insurer Medibank Private ended with the signing of a new three-year deal. The confidential agreement between the two parties came just a day before the old contract was due to expire, meaning Medibank Private customers may have been charged additional fees for using Calvary hospitals.

165 “Adverse Events” it would no longer cover. This included falls in hospitals and readmission to hospital as a result of a wound infection – risks that could never be completely eliminated even with best practice healthcare delivery. Of course, Calvary refused to accept the “quality and safety” measures demanded by Medibank Private as part of contract renewal negotiations. While both parties have now settled, the fracas turned the spotlight on just how tense and delicate negotiations between hospitals and private health insurers can become. Of greater concern though is the dangerous precedent it has set for future negotiations between healthcare providers and insurers. In the clash over costs, doctors and patients are concerned about the potential impact if the hospital refuses to agree to the insurer’s demands. This could include a hospital no longer appearing on the insurer’s preferred provider list, thereby eliminating a patient’s choice of which hospital to attend. The overall effect would see more consumers moving away from PHI.

Lifetime Community Rating Scheme – which allowed individuals who earn above a certain income threshold to purchase PHI to avoid paying an extra Medicare levy, a 30 per cent rebate on the premium, and an age-based penalty scheme to encourage earlier adoption of PHI. The incentives have been successful in expanding PHI coverage from 30 per cent in December 1998 to 45 per cent in 2010. But over the past five years, the figure hasn’t increased all that dramatically with just 47.2 per cent of the Australian population having hospital treatment cover. In the last financial year, half a million Australians cancelled or downgraded their private health insurance. Keep in mind that average health insurance premiums rose by more than 6 per cent in 2014 and 2015. Junk policies are flooding the market. APRA figures show the number of “all inclusive” private health insurance policies with hospital cover fell by 500,471 to 3.5 million in 2014-15. In contrast, there was an increase of 558,619 in the number of health policies, with hospital cover that exclude certain medical services and also require patients to pay an excess and co-payment, or gap. Indeed, a critical time has been reached. The AMA recognises that a robust health system depends on the vigour of both the public and private health sectors. It is a good sign that reviews are in motion and that discussion is being encouraged. Amidst the voices of the many stakeholders, though, let us not forget the patient’s voice – and most importantly, their right to choose. ■

One of the main causes for the dispute was Medibank’s list of

In an effort to boost flagging PHI membership, the federal government introduced

three schemes since 1997 – the Private Health Insurance Incentive Scheme, the Private Health Insurance Incentives Act and the

References available on request.

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