Long waits push surgeries onto private list
The long wait for hip and knee replacements and cataract surgery in the public hospital system is being used to justify those procedures being available only in toplevel insurance policies, given patients already have a strong incentive to go private.
Under planned gold, silver, bronze and basic categories of insurance, to be introduced from April, tens of thousands of policies will be reorganised into comparable tiers, promising members greater transparency and the ability to shop around.
However, assigning clinical services to categories proved difficult and took longer than the federal government expected. With hospital coverage falling, and concerns over rising premiums, stake- holders have also had to predict how members and prospective members will react to the changes.
Documents obtained by The Australian under freedom-of-information laws show waiting times for elective surgery in public hospitals have been factored into category design.
The Australian Institute of Health and Welfare this week revealed the average overall median waiting time for admission for elective surgery in 2017-18 was 40 days and increasing at a rate of two days a year.
Consultants engaged to model various category options told the Department of Health they had factored in “demand shifting from the public to private setting” but may have underestimated the potential in elective surgery.
Where people faced waiting more than a year in the public system, or an uninsured bill that would be higher than premiums over the same period, there was greater incentive to take out insurance.
“Such consumers may warm to the option of purchasing a product for a particular service to avoid the public hospital waiting list,” the consultants said, giving as examples hip and knee replacements and cataract surgery, which will be mandated only for gold-category policies.
With an ageing population, demand for cataract surgery is increasing and it is the most com- mon elective procedure in the public system. So, too, is demand for hip and joint replacements.
According to the institute data, 1.9 per cent of people on the public list for cataract surgery wait more than 365 days, with 6 per cent of those on the list for hip replacements and 8.4 per cent of those on the list for knee replacements, also a consequence of rising obesity rates.
The consultants said that in 2016-17 the average charge for a hip replacement was $27,070 and for a knee replacement $24,599.
“Both hip and knee replacements are good examples of treatments which have both long public waiting lists and treatment charges that are multiple times the typical cost of a single year’s premium,” the consultants said.
“Both of these effects will make private health insurance particularly appealing, and there may even be people who adversely select against the industry by dropping their cover again once they have received their treatment. The financial sustainability of the private health insurance system is best managed by minimising such opportunities for gaming the system.”
Health Minister Greg Hunt said the biggest driver of waiting times in the public sector was governments pursuing insured patients for the revenue, forcing those who cannot afford insurance and are “generally doing a lot tougher” to wait longer.