Using private health insurance members’ premiums to fill shortfalls in health budgets is wrong, writes Medibank chief executive George Savvides.
Like any other private health fund member, Medibank members have the choice of attending a public or a private hospital when they need health care. If they attend a public hospital they should, as a taxpayer, be treated the same as any other Medicare eligible patient.
However this is often not the case, with many public hospitals charging members as private patients. This means that costs are shifted to private health insurers and ultimately result in higher premiums for our members.
The scale of this practice is significant – Medibank currently reimburses over $350 million per year in public healthcare costs and we estimate that this practice costs privately insured people in the region of $1.3billion a year.
The majority of these payments cover services provided at no cost to other public patients. Furthermore, patients using their private cover at a public hospital often face unexpected and undisclosed out-of-pocket expenses.
It is worrying that some state health ministers are asking public hospitals to encourage patients to pay for their care using private health cover. Using private health insurance members’ premiums to fill shortfalls in health budgets is an unsustainable, short-term measure.
Since 2002, the amount Medibank pays to public hospitals has risen by about 10 per cent every year. Our evidence indicates public hospitals are targeting private health care members as an easy source of extra funding, with some even employing staff whose job is ‘to liaise with patients to maximise hospital revenue through patients utilising their private health cover.’
At a time when affordability is a key issue for each one of our members, it is unfair that their premiums are being used to pay for services for which their tax dollar has already paid.
In our recent submission to the Australian Government’s review of private health insurance, one of our recommendations was that the Government steps in to stop public hospitals from billing members as a private patient.
A valid exception to this must be regional areas where choice of hospital is limited. In this instance, members should have the benefit of choosing their own specialist in the private or public system.
We estimate that this change could reduce our members’ premiums by up to 5.4 per cent. Stopping this practice would also help to take pressure off the public health system, as more privately insured patients choose private hospitals.
We encourage any of our members going to a public hospital to think carefully before being admitted as a private patient. If a hospital asks you to do this, it’s unlikely this will give you better care or outcomes and you could face unexpected out-of-pocket costs.
Share this comment if you would like your health insurance to be more affordable, and you disagree with the practice of public hospitals claiming your treatment from your private health insurance.