Coalition can't dodge need for urgent health reform

A MAJOR chasm has opened in the federal election campaign with the Coalition refusing to back the need for urgent funding reform of private health insurance, which has already been committed to by Federal Labor.

It follows a second public ultimatum by Federal Health Minister Mark Butler on Monday that health insurance companies must restore the funding ratio to private hospitals, pledging:

"There has been a structural shift of where the money is going in the system. There is a shift downwards for private hospitals. There has been a shift up in profitability and management expenses of insurers." Mr Butler said. "There needs to be a lift in the benefits payments ratio."

Minister Butler has previously asserted that unless the insurers recant their profiteering at the expense of patients and hospital operations, that he will "will instruct his department to regulate to make it so within three months".

However, when asked the direct question to match the commitment on ABC Radio National yesterday, Shadow Health Spokesperson Anne Ruston dodged the issue, saying:

"It's a very simplistic solution to what is a very, very complex problem. First of all we need to know who is going to pay for the estimated $1 billion cost of the Minister's policy comments, because we want to make sure that the 14 million Australians who have been hit with above inflation premium hikes this week are not going to be the people who pay for this billion dollar commitment".

"It's a line straight out of the health insurers' talking points and, frankly, conjures concerns about a Minister for Health Insurance, rather than for Health," APHA CEO Brett Heffernan said today.

"The failure to even recognise that the health insurance industry has racked-up unprecedented profits over the just the last three years of more than $5 billion, while short-changing private hospitals by over $3 billion, is alarming in itself.

"Minister Butler has rightly called out not only the insurers' profiteering to the detriment of the health system, but also the vulgar 18% increase in their so-called 'management fees' during a cost-of-living crisis, which sees them pocket a further $3.5 billion a year from people's premiums.

"In referring to the funding ratio, Minister Butler is, again, rightly noting that the traditional 88 cents in the dollar return to healthcare providers from health insurance company premiums has been inadequate for years. In fact, the health insurance industry has not hit that benchmark since 201920 and currently sits at a paltry 83-84 cents.

"Based on consecutive years of record profits, the health insurance industry in being forced to meet the 88 cents in the dollar threshold, would still be banking $1 billion in profit from annual premiums, as well as $3.5 billion in annual management fees.

"So, to answer Ms Ruston's question, the insurance companies can absorb paying for treatments in full, which is their job and their pact with insured patients, without increasing premiums. There is no basis in their claim that premiums must go up.

"Minister Butler is late to the party, but we're glad he has arrived. That the Coalition is a no-show on these critical reforms is concerning.

"The health insurers cannot simply be allowed to run amok and abuse their market power, while insured patients lose out on access and choice, and hospitals are forced to make hard decisions to close down services. All while putting massive extra pressure on public hospitals.

"Regardless of who forms government after May 3, healthcare in Australia needs a government committed to a balanced public-private hospital system and that means holding the health insurance industry to account.

"Both sides of politics must accept the critical need to reform the funding mess caused by insurance company greed. Australia's world-leading complementary public-private hospital system is too important to abandon to the profiteering of health insurance companies.

"Anything less will not stop more hospitals from shutting down services or, indeed, closing entirely."

-ENDS-

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