MEDICUS FEBRUARY 2016

C O V E R S T O R Y

Patients must remain at the centre of any reform

Dr Omar Khorshid AMA (WA) Vice President & Orthopaedic Surgeon

T here is no doubt that

Australians pay more for prostheses than

measures. We have already seen examples of ‘junk policies’ that provide no meaningful cover for hospital care and instead seem aimed at helping patients avoid the Medicare Levy Surcharge and boosting the coffers of private health insurers. We have seen exclusions added to existing policies and heard stories of patients being encouraged to take up policies that exclude expensive but life-changing care like joint replacement or cardiac procedures. The recent conflict between Medibank Private and Calvary Health exposed the push by certain health insurers to reduce costs by refusing to pay hospitals for complications perceived to be avoidable. Although that dispute was resolved, it remains unclear what the impact may be on patients and their doctors due to the confidential nature of these contracts. It was sold as a quality argument but seemed to have more to do with containing costs than improving the quality of healthcare. The prosthesis list has been identified as an area in need of major reform. Australians pay more for prostheses than most other countries and the way the list is structured results in a complete lack of competition when it comes to private sector pricing. However, the great thing about the prosthesis list is that patients can be confident that their prosthesis will be covered by the insurer regardless of

our changing economic environment and escalating

which brand, doctor, hospital or insurer is involved. Any change to the prosthesis list must ensure that patients and doctors are the only ones deciding on prosthesis choice and that decisions are made on clinical grounds. Insurers and hospitals must not be allowed to dictate prosthesis choice to patients or doctors. Along similar lines, we must also avoid a situation where out-of-pocket costs for patients are uncertain due to prosthesis choice that is often made in the middle of a procedure. Reform of PHI is a necessity to ensure that our health system remains sustainable into the future. We must ensure the patient remains at the centre of any reforms and that we avoid the traps of managed care. All options should be considered, including changes to the taxation system, superannuation, Medicare and public hospital funding as well as PHI itself. Quality and efficiency of healthcare is important, but should not be defined by for-profit health insurers. ■ most other countries and the way the list is structured results in a complete lack of competition when it comes to private sector pricing

health costs are putting pressure on Private Health Insurance (PHI). Escalating premiums worry our patients and when it comes time to make a claim, patients are often surprised by the out-of-pocket costs associated with private hospital care. Perhaps it is time to take a step back and assess the value proposition that underpins PHI. Using joint replacement in my own specialty of Orthopaedics as an example, patients with PHI cover the majority of the cost of their care through their insurance premiums and out-of-pocket costs. Government makes a contribution through Medicare rebates, the Pharmaceutical Benefit Scheme and the Private Health Insurance Rebate. In contrast, if the same patient has the identical procedure in a public hospital, government covers all of the costs. The private patient doesn’t get great value for money in this scenario despite making the same (or greater) contributions through taxation as the public patient. PHI could be more sustainable if patients could use a portion of the cost of public care towards paying for their healthcare in a private hospital. Unfortunately, it is unlikely that major reform of the PHI sector is coming. Instead, insurers will continue to push for cost containment through other

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