Health system in trouble without more transparency: report

Bupa's Managing Director Dr Dwayne Crombie has weighed in on a new independent report highlighting the urgent need for change within Australia's health system.

Without significant reform the health system is in for a "significant shock" when it comes to how healthcare services are provided and funded in Australia.

The comments were published in a paper, ‘How to make Private Health Insurance Healthier’ which was commissioned and overseen by the Actuaries Institute.

Actuaries apply risk management expertise to identify and mitigate emerging risks and help maintain system integrity across multiple sectors.

The paper lists affordability, rising out of pocket costs and perceptions of value amongst the major issues facing private health insurers.

It calls for more transparency on fees and health outcomes and better information about premiums.

Insurers, the paper says, have limited ability to control the services and associated costs that they do cover.

“PHI tends to get more than its fair share of blame for high costs, given that most of this is driven by healthcare and provider cost increases more broadly,” it says.

The report says private health insurers can’t contribute much more than they do because they’re excluded from primary health care and most out-of-hospital health services.

“The role private health insurers can play in reshaping their future is somewhat constrained by regulations that restrict their influence in large areas of the healthcare system,” it says.

Bupa’s Managing Director of Health Insurance, Dr Dwayne Crombie, says the Actuaries Institute research should be taken seriously by all parties in the health system.

“These comments, by an independent organisation, show the value of Australia’s public/private health system to consumers.”

“We have long maintained insurers are the canary in the coal mine, so to speak, when it comes to health system costs,” said Dr Crombie.

The supply side of the private healthcare services is cited as an area in need of reform.

The paper says "there are many inefficiencies in the supply side of private health ... including overly-expensive services being performed without supporting clinical evidence, over-priced prostheses items, and inefficiencies arising from the multitude of separately set prices relating to a single healthcare pathway.”

The author of the report, Bevan Damm, a partner at Ernst and Young, told The Australian newspaper, the reforms suggested in the paper were incremental and not structural.

“The reforms we are suggesting are about getting out of the industry's way or providing the enablers that currently aren't there.”

Listen to the paper's authors discuss their report in a podcast by here.

Read more about factors affecting the cost of healthcare.