These recommendations were developed over 12 months of consultation by the taskforce, facilitated by independent policy institute Global Access Partners (GAP) and made up of health professionals, academics, consumer representatives and industry groups.

The recommendations are:

1. Increase the emphasis on prevention and chronic disease management services.
2. Fund equitable access to a patient-centred delivery model in primary care.
3. Implement all independent MBS Review recommendations as soon as possible, to remove low-value care and improve patient outcomes.
4. Leverage the existing clinical committee infrastructure from the MBS Review to create an ongoing review process to identify low-value care opportunities.
5. Invest in the utilisation of technology in primary care, e.g., telehealth, consumer email and out-of-hours communication, and online self-help resources.
6. Provide effective cover for dentistry services, particularly for children, the elderly and people in lower socio-economic groups, including Indigenous Australians.
7. Support the utilisation of mental health services, including digital services, to improve access to services and the delivery of treatment services that are consistent with best-practice care.
8. Through a private-public partnership structure, pool funds (e.g., Primary Health Networks, Medicare, other state and federal funding, PHI) to develop more innovative models of care, including by leveraging outcome-based payments for either (a) specific patient cohorts, or (b) specific episodes of care, to strengthen the incentive for case management and hospital avoidance activities.
9. Ensure the price paid for services is appropriately benchmarked to the value they demonstrate.
10. Establish a National Centre for Healthcare Innovation and Improvement as a public-private partnership.
11. Establish a standardised national approach to measuring patient-centred health outcomes for specific healthcare episodes and conditions.
12. Require publication of average charges for consultations and common procedures, and mandate pre-service disclosure of out-of-pocket expenses and an auditable informed patient consent to these costs in non-emergency situations.
13. Require all health service providers to publicise information on complication and re-admission rates, and longitudinal health outcome data, with appropriate confidentiality protections.
14. Develop a primary health information strategy to standardise data collection nationally, with the aim of improving patient experience and preventative health efforts.
15. Invest in implementing national digital health initiatives to effectively maximise their value.
16. Require healthcare professionals to maintain technology and data standards as a condition of accessing Medicare funding.
17. Increase contestability for public health services e.g., allowing private organisations to manage integrated health budgets or managing dental care programs.
18. Establish joint working models between public and private sector bodies to ensure compliance and reduce fraud.
19. Develop a long-term national health workforce reform strategy that incorporates the impact of automation and the role of precision medicine changing workforce requirements.

Taskforce chair, Martin Bowles AO PSM, emphasised the need for long-term thinking and reforms that build on the existing system.

Patient-centred models of care and increased transparency are among the suggestions put forward in the report.

Bupa Managing Director, Dr. Dwayne Crombie, welcomed this approach.

"Affordability is a major concern for the health system and we need to prioritise delivering the right care, at the right time, in the right setting," he said.

"Cost pressures driven by the ageing population aren’t going away, so it’s critical that the health sector works together to ensure long-term sustainability."

Improving affordability for customers remains a key focus for Bupa.

Several pilots are underway, aiming to provide the same or better health outcomes at lower cost, while also giving customers more choice. Rehabilitation, chemotherapy and palliative care in the home are among the services currently being rolled out to Bupa customers across the country.

The Bupa Health Foundation co-funded the Australia’s Health 2040 taskforce, alongside GAP, EY, Johnson & Johnson Australia and Westpac. Read the full report here. 

Find out more about what's affecting the cost of health care

Dr Dwayne Crombie, Managing Director of Bupa Health Insurance, said that by looking at where the biggest expenditures came from, the health system can work together to deliver a sustainable system.

“These are all very good and very useful procedures. They are helping us live longer lives and have better quality of life. But many of these operations are symptomatic of people getting older and more of the population being overweight or obese.

“Greater access to more sophisticated technology to improve health outcomes should be celebrated, but we need to understand that these advances come with increased costs.

“It also tells us that if we want to be able to put downward pressure on health insurance premiums, we need to be able to trial different ways of delivering healthcare which don’t affect quality of care but may reduce cost or give patients more choice.

“This includes continuing to look at why prosthetics for hips and knees cost significantly more in Australia than other parts of the world. It means changing the mindset that a person must stay in hospital for rehabilitation after a knee or hip replacement where all the evidence says the outcome is the same or better if done in their home.

“And it also means understanding that surgery for many of these conditions could be avoided if appropriate preventative health measures, including weight management, are appropriately promoted and funded.

“We’re keen to have these discussions, to work with clinicians to see people getting the right care, in the right place, at the right time and for the right price,” Dr Crombie said.

Read more about factors affecting the cost of private health insurance. 

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.

“We need to make sure value for our customers is at the centre of everything we do,” said Dr Crombie.

“Health insurers like Bupa need to work cooperatively with governments to look at reform across the entire health sector, not just singling out insurers.”

The peak lobby group for the private health insurance industry, Private Healthcare Australia, said a proposed Labor promise to cap private health insurance premium rises at 2% a year for two years would have put smaller funds at risk and threatened competition in the sector.

This year has seen the lowest increase in premium rises in 18 years, with an average of 3.25%. The federal government’s reforms to health insurance have seen the introduction of 4 categories to simplify insurance: Gold, Silver, Bronze and Basic.

AMA President, Dr Tony Bartone, says the government needs to ensure the private health system remains strong.

“The private health insurance reforms need to be bedded down, and the integrity of the private health system and its symbiotic balance with public hospitals needs to be supported and maintained.”

This view is backed by Dr Crombie.

“Everyone in the health system, whether they are GPs, specialists, hospitals, governments or insurers needs to put consumers front and centre.”

“We can’t afford to carry on as if it’s business as usual. The pressure is on us all to come up with ideas and policies that will ensure the sustainability of the public/private balance that serves Australia well.”

Read more news about the cost of health care

HEALTH insurer Bupa is delivering value for Tasmanian customers with a range of initiatives to address premiums and reduce out-of-pocket costs for healthcare.

Since April 1, members under 30 years of age will receive an automatic discount of up to 10 per cent, while all members can elect to increase their hospital excess for a reduced premium.

Bupa is also reminding members it has the largest network of healthcare providers in Tasmania, meaning negotiations by Bupa provides certainty around cost.

Bupa says using its Member First network could save Tasmanian families hundreds of dollars by being more selective about where they go for dental, physiotherapy and chiropractic treatments.

Further savings could be made for those with children, with many Bupa products providing kids dental, physio, chiro and podiatry consultations as well as a range of selected glasses at Member First providers (up to yearly limits) with nothing to pay.

Bupa Health Insurance managing director Dr Dwayne Crombie said Bupa was acting to provide value for money for health insurance customers and reduce additional costs.

“When you or your family are sick, injured or need medical care the last thing you want to worry about is how much you will have to pay,” Dr Crombie said.

“We've heard the message about affordability and value for money loud and clear from our members. That's why we've acted to both address cost of health insurance and what members are then required to pay if they need medical care.

“Our Member First network of hospitals, dentists, physiotherapists and other health services means members have certainty around what they will be charged, and may even receive care with no additional charges. We list all of our Member First providers on our website or through the MyBupa app and research shows it can literally save a person hundreds of dollars each year.

“We're also moving to address the price of premiums. 80 per cent of our customers currently choose a policy with an excess and this will be the first time in almost 20 years they can choose a higher excess in return for a lower price.

“We will also offer customers aged 18-29 years annual discounts of up to 10 per cent off their private health insurance hospital cover premiums.

“The more under 30s we have taking up health insurance annually, the better it is for all health insurance customers because it helps to reduce costs for everyone,” Dr Crombie said.

Read more about what's affecting the cost of healthcare

“We know that it’s common to undergo a medical procedure in hospital without knowing how much it will cost. We’ve heard our customers’ concerns and frustrations about unexpected fees and bill shock, and so we have created a calculator that will help inform our customers about the average cost of a hospital procedure,” Ms Shay said.

“This costs calculator will enable customers to have a far greater understanding about what their surgical or medical procedure will cost, and if they will be out-of-pocket. This calculator shifts the balance of power back towards customers in their discussions with doctors and hospitals,” Ms Shay said.

“The costs calculator complements Bupa’s list of specialist doctors who are a part of our Medical Gap Scheme, which is another way Bupa is working to reduce out-of-pocket costs for our customers.

“This specialist doctor search tool shows not only which doctors are a part of Bupa’s Medical Gap Scheme, but also the percentage of cases in which they have charged a gap fee to our customers,” Ms Shay said.

Private health insurance in Australia can only cover doctors’ fees for hospital and day surgery medical procedures. This means that medical appointments with a GP, obstetrician or orthopaedic surgeon in the lead up to a surgery cannot be covered by health insurance and are therefore not included in this calculator tool.

Take me to the calculator tool.

Read more about healthcare affordability

Dr Dwayne Crombie, general manager of Australia's largest health insurer, Bupa, has confirmed reports manufacturer-linked technicians with sales-based incentives are being used in theatres.

He said some of these individuals were technicians and some were "more at the sales rep end", and could be in a position to influence specialists' choices.

"We're told that many of those reps are almost incentivised on commission basis to get their products sold," Dr Crombie said.

Read the full article from the ABC

Read more about factors driving up the cost of health care

It is alleged that the device manufacturer then pays a rebate to the hospital.

Some doctors have expressed concern this rebate may influence clinical decisions or drive costs at a time where affordability and transparency of costs in healthcare are a priority.

Dr Dwayne Crombie, Managing Director of Bupa Health Insurance, said more needs to be done to improve transparency of costs in healthcare given that consumers are the ones who ultimately end up paying.

“Everyone needs to remember it’s the poor, long-suffering customer who pays for this,” Dr Crombie said.

“I don’t think it’s unreasonable to balance the very real need of health insurance customers who are screaming for affordability with the profitability of medical technology companies,” Dr Crombie said.

Despite changes made to the Prostheses List last year by the Federal Government to reduce costs, Dr Crombie said more needs to be done to address rising costs.

“As the largest health insurer in Australia I can say that despite the changes made to the Prostheses List last year we are significantly over budget. We have seen real savings from the reforms, however coincidentally we have seen increased utilisation so it does raise questions.

“It would seem the medical device industry has found ways to fight back and reclassify products.

“I would suggest that there could be more commerciality of things on the schedule. If you compare the price we pay for devices in Australia compared to other countries, we are a bit out of synch.

“The current schedule system inhibits effective price competition by suppliers where the schedule price for a prosthesis or medical device is significantly above the actual commercial market price. A main cause of this is that medical technology companies share the windfall profit with hospitals through this system of rebates (or kickbacks).

“A medical technology company that tried to charge less than the schedule price - which would benefit the paying patient - effectively wouldn’t have a windfall profit with which to incentivise the private hospital and so would find it hard to win any competitive business.

“There also needs to be a more dynamic process for how the schedule price and the list is set. This is not just about getting stuff on to the list, but also getting things off that are no longer the most efficient or effective way of care,” Dr Crombie said.

Read more about healthcare affordability

IT’S the document doctors don’t want you to see.

The secret fee bible that recommends specialists charge up to three times more than the Medicare fee for thousands of hospital procedures can be revealed for the first time.

News Corp has obtained the Australian Medical Association’s “List of Services and Fees”, used by doctors to set their rates for more than 8700 common procedures.

And their greed is plain to see — some are charging 10 times more than what it recommends, contributing to the more than $1.6 billion a year in gap payments not covered by patients’ health fund or Medicare.

The peak doctors group has for years refused to make the fee list public and in doing so has made it impossible for patients to understand whether their doctor’s fees were reasonable.

Today we lift the lid on a massive overcharging scandal by showing that many doctors are charging even in excess of these higher AMA fees.

And we give consumers the power to find out if their doctor is overcharging via a new online tool that lets them compare the fees they have been quoted to those recommended by Medicare and the AMA.

For ACT residents, the recommended AMA and Medicare fees are the same as NSW, but gap fees may vary.

Read the full article and access the tool via the Herald Sun: 'The secret fee list your doctor doesn't want you to see', and in the Courier Mail, 'AMA list exposes overcharging doctors'.

Read more about what's affecting the cost of health insurance

While health insurers are easy targets for criticisim, the underlying causes of what drives premium rises are seldom discussed, according to Dr Dwayne Crombie.

“If you look at all the good health systems, they would say the primary care or general practice part of the system is the bedrock, to the extent you can get the right kind of treatment in the community. That care needs to work well with a mindset where we don't do stuff in expensive hospitals when you don't need to do it. But how do you create a system that encourages people to do things for the least cost and in the safest setting?”

"In the private sector where people have a financial incentive, it’s important to check that it's balanced in the interests of the patient as well as the profession."

“There are a lot of financial incentives for those who own day stay facilities or hospitals and who want to do things where they 'clip the ticket'. We have to face up to the fact that sometimes health professionals do behave in a way to support themselves.”

“It’s actually really hard to have a serious policy debate about health care. If you step back, there is a certain irony in the new Labor policy to have a 2 per cent cap on private health insurance premium rises at the same time the Coalition Government is offering the states 6.5% in the public system. These are two systems dealing with the same kinds of issues. We have an ageing population so we want to provide more of the care to improve quality of life. We have all the technology that gives us one of the longest life expectancies in the developed world."

Let's get real

Recent comments by a prominent hospital provider, refusing to even acknowledge the existence of low value care in the health system, are a good example of this. Unnecessary surgery is one of the big contributors to rising costs in the health sector.

“If you take a couple of examples of something that can be low value, one is inpatient rehabilitation after hip or knee joint surgery. We know that you can spend two weeks in a rehab hospital which costs about $9000 or we can go home and visit an outpatient rehab, which typically, the community options costs, between $500 and $1000.”

“If you’re a hospital operator you're quite happy to have someone go through your unit for $9000, if you're an older patient you might think 'I paid my insurance, why don't I just enjoy two weeks with my feet up?’”

“The problem is you do end up paying, because that $9000 adds up – at Bupa we spend about $160 million a year on inpatient rehabilitation. If you can go home for $500 or $1000, that's a much better choice and we could spend that money on something else or lower your premium.”

Tap into Spinal Fusion ‘epidemic’

“Another definition of low value care is when you provide something that may benefit only a small number of people you're giving the procedure to. Two of the obvious examples are diagnostic knee arthroscopy, and the one that has really taken off lately, spinal fusion for lower back pain, particular chronic back pain.”

“We know from the studies that a very small proportion of people benefit from spinal fusion of the lower back - probably in the order of 10 to 15% and yet this is a very difficult, expensive operation often with complications.”

“You might ask why we have such an explosion lower spinal fusions? Well, chronic back pain is a horrible problem to have and often people feel like any choice, even if its questionable success is something they might want to contemplate. Obviously, surgeons are willing to do it because that's what they're trained to do.”

“It's only when you step back and look at how poor the outcomes are for a majority of people that you get more of a system view.”

“I would say that at the moment spinal fusions are an epidemic in the Western world. We spend probably in the order of $50-$60 million a year without any evidence at all on the good it does. In most cases it does not beat conservative treatment and the rate at which they're being performed is rocketing up.”

A better Mental Health System

“For us, mental health in the private sector is one of the areas we can collaboratively work together with community services, with psychiatrists, mental health therapists and NGOs. We need a debate about how we can create a fantastic mental health system in Australia. Everyone agrees it could be better. At the moment I spend $0.94 of every dollar on inpatient care, I know that's not right and that's one area where I hope we could come together.”

Working together for better outcomes

“A couple of research institutions in Australia are leading the way: the Menzies Centre for health policy, Prof. Adam Elshaug, as well as the Grattan Institute. The Menzies is now working with the public health sector and looking at the different procedures people do and at what proportion of those operations is there any clear indication of benefit.”

“There are a lot of people who do very well with the existing system, no one ever likes to change the system where they will lose out slightly. It's actually hard for people to act in a mature fashion.”

“Sometimes I can get a bit despondent we’re going to get there. The most pragmatic way we can is with willing organisations and people, probably at the practical level of particular areas."

“The challenge is not going to go away if we don't confront it. We need to have a really honest discussion.”

Read more about healthcare affordability

Everyone acknowledges and accepts affordability is a big concern for consumers of health insurance.

If private healthcare is going to be sustainable and an effective choice for Australians, then collectively we need to solve the complex challenges that surround it.

Australia faces a challenge almost all countries in similar circumstances struggle with, and very few manage health system cost growth below 5 per cent (public or private).

Total federal health spending has historically tracked between 5 and 7 per cent a year....

Read the full article in the Australian.

Read more news about healthcare affordability

Bupa said that, on average, customers who used a Member First dentist, physio and chiro within a 12-month period would have an average out of pocket fee of around $397* compared to $983 on average for non-Member First providers.

Dr Dwayne Crombie, Managing Director of Bupa Health Insurance, said that many customers still weren’t aware that there was a difference in what providers charged and how much it can affect the household budget.

“It’s no secret that everyone is feeling the pinch in relation to the general cost of living pressures,” Dr Crombie said.

“As health insurers, we aim to negotiate the best price for our customers however even after many years of these arrangements being in place some people aren’t aware of the difference it makes.

“Saving up to $600* can make a big difference and we want customers to know about it, ensuring people can see the real value for money their health cover can provide them.

“Whilst Bupa customers can visit any provider, it is important for people to understand the financial experience does vary significantly and attending a Members First provider can not only deliver financial savings but all submit claims electronically making the entire experience simpler as well.

“We list all our Member First providers on our website or through our app,” Dr Crombie said.

Find out more about how chosing the right provider can save you hundreds of dollars on news.com.au.

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*Bupa data is based on the average out of pocket costs summed for customers over a 12-month period if they were to utilise these modalities for services included in the Members First agreement.

By Sarah-Jane Tasker

The Australian

A survey of 1535 people commissioned by health insurance giant Bupa revealed that Australians had identified addressing rising costs as the single most important factor for improving the healthcare system.

Dwayne Crombie, Bupa’s Australian health insurance boss, said the research presented the industry with an interesting conundrum because while people held insurers most accountable for costs, it was medical specialists and hospitals that set the fees, while insurers and governments were left to pick up the tab. 

Read the full story in The Australian.

Interested in finding out more about what's driving the cost of healthcare? click here.

Bupa would like the Government to establish a Productivity Commission review of the health system and develop a 10-year roadmap for structural reform of the health system.

“The Productivity Commission should be tasked with developing a 10-year roadmap to move to a ‘values-based’ health system, focused on sustainability, improved quality and greater efficiency, driven by a more effective market.”

Hospitals can play a major role in helping lower health costs

Preventing public hospitals from loading patients onto the private system is one of the company’s recommendations.

It asks that public hospitals should only be able to charge private patients for pre-booked admissions (e.g. not emergency) or if they have contracts with health insurers, with the contract to allow compliance, monitoring and audits, as per arrangements with private hospitals.

Or, if the patient signs a statement prior to admission, submitted to insurer at least 24 hours prior to hospitalisation, with the statement clearly spelling out the additional benefits that will be received as a private patient e.g. choice of doctor.

Comparator websites are costing people money

Another key plank of Bupa’s submission is that the government crackdown on comparator web sites which, while purporting to save consumers money, Bupa says actually contribute to higher prices and poorer health coverage for people.

Bupa wants the disclosure of full details of commissions that would be received in relation to products including up‐front and trail commissions by comparator websites.

Bupa says people are often not getting the coverage they think when they take out health insurance through comparator websites, with the fine print not explained.

It wants clear signposting of key product conditions that apply to the recommended product such as exclusions, excesses, co‐payments and waiting periods.

One solution is to bolster the government website www.privatehealth.gov.au so it provides a more consumer friendly and sophisticated comparison than is currently the case.

This, Bupa says, would create a truly independent useful comparison tool for all consumers without the payment of commissions by insurers.

Better information for patients

Bupa says the Government should work collaboratively with relevant bodies including professional associations to develop agreed performance indicators to assess the performance of health practitioners.

That data should be comparable, reliable, appropriately aggregated, benchmarked, and should account for external factors such as more complex client case-loads.

Once developed, performance indicators could be used professionally to support peer review, and externally to support patient choice.

Care in the community; mental health and rehabilitation

Based on its own customer survey data, Bupa says people want more access to rehabilitation and mental health care at home.

It found 87% of people surveyed believed mid-level psychiatric care should be delivered at home or in the community, rather than in hospital.

82% thought post-surgery rehabilitation should be conducted at home or in the community, rather than in hospital.

Bupa spent over $167 million in 2015-16 for hospital and medical benefits relating to mental health. Only 11% of the total mental spend was on same day visits.

The Government should work with the health sector, states and territories to develop new funding arrangements that incentivise the delivery of care in the community where it is clinically appropriate, Bupa says.

“We can better meet the needs of our customers, offer them a higher quality of life, and alleviate costs if we deliver more mental health care in the community or at home, rather than in hospital.”

Future health; other recommendations to government

• Having gap free option for dental, optical, physiotherapy and podiatry services available for children - reinforcing the preventative health element- will improve the wellbeing of future generations of Australians and ultimately helping reduce the impact of chronic disease.

• Bupa says it fully supports any reform to make Private Health Insurance more transparent and to simplify products for customers.

• A Lifetime Health Cover Discount should be introduced for adults under the age of 30, to a maximum of a 10% discount, to encourage greater participation of younger people in health insurance.

The Australian is also reporting on Bupa's submission to a Senate inquiry on the health sector, highlighting its call for major reforms in order to bring costs down.

Read more about healthcare affordability

Previous national research¹ has shown that more than 36,000 Australians are hospitalised every year for sports related injuries, with thousands of others treated outside of hospital. Dr Dwayne Crombie, Managing Director of Bupa Health Insurance, said that while participation in sport delivered overwhelming health benefits, when injuries occurred costs could exceed as much as $5,000.

“The aim of releasing these figures is not to discourage people from playing sport, but rather make them aware of the costs they could be facing and encourage them to take protective measures where possible,” Dr Crombie said.

“We’ve looked at some of the most common sports injuries and identified the costs associated just with the time spent in hospital. On top of this would likely be ongoing, out of hospital rehabilitation such as physiotherapy.

“Last year a fractured arm or wrist was the most common sports injury requiring hospital care for our members while, based on hospital care alone, a person tearing their ACL faced the highest costs of $5,858 on average.

“Many of these injuries are unavoidable, but it should reinforce the use of protective items if available for your sport and wear appropriate footwear to minimise the chance of injury as much as possible.

“There’s been a lot of discussion lately about the value of health insurance. What these figures demonstrate is the peace of mind it can provide, especially for those aged 35 or under who are the most common to be hospitalised with sports injuries,” Dr Crombie said.

^{1 AIHW Australian sports injury hospitalisations 2011-12 http://www.aihw.gov.au/publication-detail/?id=60129549100}

Read more news about the cost of healthcare

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.

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?”

Survey findings

• 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.

Read the full survey on the Future of Private Health Insurance, part of Bupa's Future Survey Series 2017.

Read more news about healthcare affordability

"This is a really important reform as up until this point Australians have unjustifiably paid the highest prices in the world for medical prostheses. In a recent Bupa customer survey, 87% of our members felt it was important that the Government take action to reduce premiums by reviewing the cost of prostheses.

"We thank Minister Ley for helping address this critical need. We have guaranteed our customers that we will pass on every cent saved through lower health insurance premiums.

"While this is a much needed step, we believe there is a real opportunity in this term of government to put in place more practical and achievable reforms that will deliver an improved health and care system. This means continuing to focus on waste and inefficiencies to help address factors that are increasing the costs of health and care for consumers, providers and governments at an unsustainable rate.

"As part of this we believe that the Government should commit to a Productivity Commission review of the total private health system and how it interacts with the public system - to improve coordination of healthcare services and reduce complexity, fragmentation and duplication."