Health insurer limits surgery payouts

Health insurer Nib will start capping the amount it pays for some surgeries from September in a bid to stem rising premiums.

It said the move was designed to make health insurance more affordable by better managing medical claims.

Chief executive Rob Hennin said claims data revealed Kiwis were paying thousands of dollars more for surgery depending on where they lived.

‘‘We are seeing some shocking surgical cost variations between regions with no evidence of better quality healthcare, which is simply not acceptable,’’ he said.

‘‘For instance, customers in Auckland on average are being charged almost 40 per cent more for a knee replacement than those living in Canterbury.

‘‘That’s around a $15,000 difference. This has a very material impact on the price of premiums.’’

Health insurance pays medical bills for things like elective surgery.

Under Nib’s ‘‘First Choice’’ policy, the insurer will make policyholders aware of health providers who charge below the maximum.

But any policyholders who decide on treatment from a surgeon who charges more will have to pay the difference out of their own pocket.

‘‘Customers will still be able to choose any Nib registered medical professional from around the country. However, by selecting a First Choice network provider, they are guaranteed to have zero out-of-pocket expenses,’’ Hennin said.

‘‘Until now, our customers and in turn Nib has just had to accept these costs.’’

One of the biggest disparities was in the cost of mastectomies, with customers in Auckland and Wellington paying significantly more than the national average, up 83.5 per cent and 62 per cent respectively.

Of the three largest cities, Wellington is paying the most, with customers living in the area paying 31 per cent more in total costs than the national average across the 26 procedures surveyed.