No Minister, shifting public costs to private patients isn’t right


Shifting public health costs to patients with private health insurance isn't right, writes HBF managing director Rob Bransby.

I was concerned and utterly disappointed when news surfaced last week that Health Minister Kim Hames had directed staff of public hospitals to encourage people to use their private health cover for treatment in public facilities.

Mr Hames gave the directive at a meeting of the Australasian College of Health Service Management last week and it was reported in The West Australian this week.

It’s no secret the State Government is under pressure to find savings in health. But simply shifting public health costs to Western Australians with health insurance isn’t fair and it isn’t smart. It was a blatant example of cost shifting to privately insured Western Australians.

As tax payers, HBF members have already paid for the privilege of using this states’ public hospitals. They have exactly the same right as everyone else to access the public system without being expected to draw on their private health cover.

And rightly so, our members expect their premiums to fund their access to Western Australia’s private health system – not simply to pay for the services that others receive for free.

Affordability of private health insurance – driven largely by cost pressures outside the control of insurers – is already a major concern. This latest cost-shifting move by Mr Hames is only going to make things worse.

Health insurers don’t have a magic pudding of funds. Every dollar paid by insurers for the use of public hospitals ultimately comes from our members’ premiums.

HBF already pays $40-50 million in benefits for public hospitals each year and health funds already pay 9% of the revenue of public hospitals in WA.

If this increased to 19% of public hospital charges (as is the case in some other Australian states) HBF would pay an extra $56 million in benefits and would need to add an additional 2.8% (an average of $1.30/week) to hospital premiums to cover this alone. HBF’s premium increase in 2015 was 5.96% so this would have lifted this closer to 9%.

Not only does Mr Hames’ approach threaten to undermine the viability of private health insurance, his approach is short-sighted and ignores the impact it will have on the millions of Western Australians who rely on the public health system.

The reason the Howard Government introduced a rebate on private health insurance 16 years ago was to incentivise people to have private cover, to remove the burden on public hospitals, and improve universal access to health services.

The health of our health system relies on there being an equal use of public and private health services. Tipping that balance could be catastrophic.

I urge our members to think twice when asked if they’d like to ‘go private’ in a public hospital.


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