The customer must be at the heart of health insurance reform


Around 44% of Australians have private health insurance which gives them valuable choice in when and where they receive care and by whom.

By Emily Amos, Managing Director Bupa Health Insurance

Privately insured Australians take the pressure off our public hospital system which is currently experiencing ballooning wait periods for many non-emergency procedures.

We don’t want health insurance to cost one dollar more than necessary. But the reality is, the increasing cost of health care continues to drive premiums up. This is partly due to our ageing population and advances in medicine, but also inefficiencies and waste.

Under the leadership of Health Minister Greg Hunt, the Federal Government is consulting on ways to address some of the structural issues that present challenges to delivering affordable and relevant private health insurance.

While this is a welcome step forward, we urge the Government to be bold in its reform efforts to put customers at the centre of our private health care system, ensuring health insurance is affordable and relevant to the evolving needs of Australians now and for the future.


Health insurers are required to pay for care delivered in hospitals, even when it may have low clinical value. For example, following a knee or hip replacement, private patients are transferred to in-hospital rehabilitation at around double the rate of public patients.

Not only is hospital-based care significantly more expensive, many people prefer to recover in their own home, surrounded by appropriate support, where clinically appropriate.

Bupa believes that the majority of rehabilitation should be undertaken in the community provided it is clinically appropriate, unless there are special circumstances certified by clinicians, for example, the patient lives alone and requires around the clock nursing care.


Australian private patients pay the highest prices in the world for medical devices, with no evidence of better clinical outcomes than patients in public hospitals who pay a fraction for comparable items.

Substantial reform to prostheses pricing is needed, which includes an independent approach to price setting that reflects the market in our public hospitals and internationally. In many cases, our customers are paying twice for consumable items, such as sponges and glues, that are billed as medical devices as well as being included in the prices insurers pay hospitals for procedures. Bundling prostheses into ‘family groupings will drive cost-effectiveness and allow the measurement, reporting and incentivisation of quality clinical outcomes.

Evolving care delivery and mental health

We need to re-orient our private health system to more adequately cater to those suffering from chronic disease and to offer more connected home and community-based services.

Mental health care is the most obvious starting point for reform and will be increasingly important to Australians as the impacts of the COVID-19 pandemic continue to be felt. We want to be able to support our customers across their entire journey through the mental health system, not just when they are admitted to an acute hospital.

Health insurers should have the ability to fund community-based care, including making top-up payments for mental health MBS items to reduce the often high out-of-pocket cost of seeing a psychologist or psychiatrist. Expanding the services health insurers can fund through Chronic Disease Management Programs to include mental health nurses, social workers and community pharmacists, will also help the private system deal with the chronic diseases from which so many suffer.

Products that appeal to young people

Under the Government’s proposed reforms, dependent children will be able to remain on their parents’ policies until they are 31. While we applaud efforts to encourage participation by young people, addressing the cost barriers will have limited impact if the product is fundamentally irrelevant to this group, which is why insurers need the flexibility to evolve their product offer. Enabling insurers to fund a broader range of non-rebateable health and wellbeing services will have a far greater impact in attracting young people to private health insurance.

Our priority is ensuring our customers receive the affordable, personalised, connected, high-value care that helps them lead longer, healthier and happier lives. We welcome measures that reduce unnecessary costs and place less pressure on premiums, but importantly are in step with how Australians are living their lives today and support their health and wellbeing. These considerations will be front of mind as we continue to work with the government, hospitals and healthcare professionals to pursue real reform.