Dan­ger seen in health fund re­forms

The Weekend Australian - Travel - - Health - Sean Par­nell

HE latest round of private health in­sur­ance re­forms has sparked fears that com­mu­nity rat­ing — the key­stone of the sys­tem, en­sur­ing mem­bers are treated the same re­gard­less of their med­i­cal his­tory — is un­der threat.

Un­der re­forms fos­tered by Health Min­is­ter Tony Ab­bott, health funds will be able to cover more out-of-hospi­tal ser­vices, doc­tors’ clin­i­cal in­de­pen­dence will be sup­ported, and mem­bers will be en­ti­tled to stan­dard prod­uct in­for­ma­tion to en­able them to com­pare funds.

‘‘ This pack­age will cre­ate new op­por­tu­ni­ties for the private health sec­tor, al­low­ing greater in­no­va­tion and even greater choice in private health care,’’ Ab­bott said when he in­tro­duced the leg­is­la­tion into Par­lia­ment.

When im­ple­mented the leg­is­la­tion will be a win for con­sumers, a win for private health in­sur­ers and a win for ser­vice providers — and a win for our pub­lic hospi­tal sys­tem too.’’

But lead­ing health an­a­lysts have warned the sick and dis­abled might be the losers in the re­forms if health funds are al­lowed to cir­cum­vent com­mu­nity rat­ing.

In a sub­mis­sion to a par­lia­men­tary com­mit­tee in­quiry, the Cen­tre for Health Eco­nomics Re­search and Eval­u­a­tion said the re­forms would fa­cil­i­tate cream-skim­ming’’ by health funds.

Such ac­tiv­i­ties can take many dif­fer­ent forms and guises in­clud­ing mar­ket­ing strate­gies aimed at younger co­horts, de­sign­ing prod­ucts that typ­i­cally ap­peal to more healthy in­di­vid­u­als, or mak­ing in­sur­ance prod­ucts for con­sumers with spe­cific con­di­tions more ex­pen­sive,’’ CHERE said in its sub­mis­sion.

The an­a­lysts, based at the Univer­sity of Tech­nol­ogy Syd­ney, warned the re­forms might lead to higher pre­mi­ums for the un­healthy, who would be forced to use

pub­lic hos­pi­tals car­ing for a sicker pop­u­la­tion’’.

The Con­sumers Health Fo­rum raised sim­i­lar con­cerns, but health fund Aus­tralian Unity down­played the risk of com­mu­nity rat­ing be­ing eroded, and the Aus­tralian Health Man­age­ment Group said the re­forms would ad­van­tage mem­bers.

Shortly af­ter the com­mit­tee handed down its re­port, largely en­dors­ing the leg­is­la­tion and avoid­ing the is­sue of com­mu­nity rat­ing, the De­part­ment of Health and Age­ing handed Ab­bott a re­port warn­ing cor­po­rate prod­ucts had al­ready put com­mu­nity rat­ing un­der threat.

The de­part­ment heard ev­i­dence some health funds were de­lib­er­ately se­lect­ing com­pa­nies based on the age, or likely health, of their em­ploy­ees, while oth­ers went so far as to seek de­tails of prior claims be­fore of­fer­ing mem­ber­ship, thereby re­duc­ing the fi­nan­cial risks to the health fund.

While there is, in the­ory at least, no im­ped­i­ment to cor­po­rate prod­ucts be­ing made avail­able to the gen­eral pub­lic, funds have been loath to ad­ver­tise them and some have ac­tively dis­cour­aged non-staff from tak­ing that type of in­sur­ance.

While the de­part­ment re-en­dorsed cor­po­rate prod­ucts and noted ‘‘ some crit­i­cisms about cur­rent prac­tices ap­peared to be mo­ti­vated, un­der­stand­ably, by a de­sire to pro­tect mar­ket share’’, it still pro­posed re­forms re­cently ticked off by Ab­bott.

The rel­e­vant leg­is­la­tion will be amended to give funds pro­tec­tion if they of­fer cor­po­rate prod­ucts, avoid­ing the risk of puni­tive ac­tion for breach­ing the com­mu­nity rat­ing pol­icy — with one ma­jor caveat.

‘‘ This would be sub­ject to the con­di­tion that all prod­ucts, cor­po­rate or re­tail, must be avail­able for pur­chase by all mem­bers of the com­mu­nity,’’ the de­part­ment told health funds this week.

From April 2008 funds will be re­quired to ad­ver­tise their cor­po­rate prod­ucts on the gov­ern­ment’s planned con­sumer in­for­ma­tion web­site ‘‘ to in­crease trans­parency’’.

Em­ploy­ees would also be able to keep their cor­po­rate cover if they quit, al­though funds would have the flex­i­bil­ity to charge dif­fer­ent pre­mi­ums for cor­po­rate cus­tomers as op­posed to mem­bers of the gen­eral pub­lic.

While the smaller health funds wel­comed the move, Med­ibank Private man­ag­ing di­rec­tor Ge­orge Sav­vides avoided giv­ing the Gov­ern­ment his full sup­port.

Med­ibank Private has been of­fer­ing a cor­po­rate prod­uct, Pri­or­ity, since 2005, and has built a mar­ket around its well-be­ing pro­gram and the abil­ity of em­ploy­ers to mon­i­tor their em­ploy­ees’ health.

‘‘ Open­ing the prod­uct to the mar­ket is an op­por­tu­nity,’’ Sav­vides said. ‘‘ But what’s im­por­tant to re­mem­ber here is that Pri­or­ity was tai­lor-made for the cor­po­rate mar­ket, so al­though we will make it avail­able, it may not be the most ap­pro­pri­ate level of cover for ev­ery­one. The fact re­mains that peo­ple have to choose the most ap­pro­pri­ate level of cover for their life stage and lifestyle.’’

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