Australia at the mercy of rocketing health costs
Bupa's Health Insurance Managing Director Dwayne Crombie on the future of health insurance
Australians are turning to private health funds to combat healthcare costs, writes Dwayne Crombie, and Bupa is up to the challenge.
As health insurance premiums go up again, driven by waste and inefficiency in the health system, we recognise that the affordability tipping point has been reached and we’re determined to help do something about it.
New consumer research shows Australians have singled out health insurers and governments to lead the turnaround of the country’s troubled national health and care system by tackling ever-increasing costs while maintaining people’s quality of life.
The results show that Australians expect private health insurers to play the biggest role in combatting the nation’s rising healthcare costs, which is identified as the single most important factor for improving the health and care system as a whole.
Overall the research presents us with an interesting conundrum. People hold insurers most accountable for costs, yet in our health system, it’s medical specialists and hospitals which set the fees while insurers and government are left to pick up the tab.
I’m not sure that situation is going to change, but what is clear is that for too long now, Australia has been at the mercy of rocketing health costs. There has been a lack of accountability from across the health sector when addressing these costs and what that means for the future of this country. Australians are now turning to private health funds to really lead the charge around cost innovation on their behalf.
This means bringing together governments, hospitals, doctors and our networks to tackle these unsustainable costs. It also means addressing the pricing practices of some medical specialists which can leave insured Australians with huge out of pocket expenses.
It has also led to us tackling the issue of medical device costs such as pacemakers and ceramic hips and knees. Australians have unjustifiably paid the highest prices in the world for these items which pushes the costs of health insurance premiums sky high. These costs are set by government and insurers must pay them.
As an example, Bupa's private hospital in central London purchases a St Jude Medical pacemaker for £16,448 which equates to just under $27,000 in today’s exchange rate ($26,975.50). Here in Australia the same device is listed at $52,000. That’s a $21,775 or 93 per cent mark-up. The Government is now looking at this issue where millions of dollars of savings can be realised, all of which will be passed on to customers.
And while addressing cost is critical to the future of healthcare, the research showed this needs to be balanced by Australians not wanting cost to impact their quality of life or life expectancy.
The challenge presented to the sector and private health insurers in particular is how are we going to achieve greater collaboration to meet the expectations of a public equally concerned about improved quality of life, increased life expectancy and reduced cost?”
- Consumers clearly rank cost as the biggest innovation challenge facing the healthcare system in Australia. Finding ways to help reduce the cost of healthcare to the nation is seen as the biggest priority for the future;
- The emphasis on cost as an innovation driver becomes less acute among respondents aged 55 and above. In this demographic, efficiency becomes increasingly important;
- Consumers place high importance on specific initiatives that provide more transparency around private health insurance and better access to information about treatment options;
- Private health insurers and both Federal and State Governments are expected to play the biggest roles in innovation to transform health and care in Australia;
- Private health insurers are also expected to work with GPs more closely, specialists and patients to ensure transparency of information to enable patients to make more informed decisions about their insurance, treatments and methods of prevention;
- Consumers are less interested in technology initiatives except for the possibility of making health records available electronically to doctors and specialists;
- Improving quality of life is seen as the main priority for a majority of consumers and they do not want this compromised by issues of cost. While cost-led innovation is identified as most important to the future of the healthcare system, respondents do not want to see the cost of such innovation compromise their quality of life or life expectancy.
Overall, the survey results reveal that the benefits for the community rest in strengthening innovation between private health insurers, government, health and care providers, and ultimately patients. The message is clear; we all have a role to play. It's how we collaborate that is the major challenge here.
Dwayne Crombie addressed the Committee of Economic Development of Australia (CEDA) in Perth on 30 March 2017 to share insights into innovative ways private health funds can combat rising healthcare costs.