De-exodus from medical insurance

Back on Blogocracy we had a couple of discussions about the increase to the medicare levy surcharge. When the policy was first announced Tim posted this thread.

The medical insurance industry was saying that it would lead to the membership dropping below the 40 per cent threshold. And some posters were declaring how this was a disasterous policy.

Sherlock: This will result in a flood of people returning to the public system.

Carlyle:  am no fan of insurance companies of any kind, however I believe the changes are ill conceived & before rushing to change the status quo the new Government needs to tread a little more warily.

Tim then made a followup post the next day where he links to an interview with Prof John Deeble who commented on the medical insurance industries comment that membership will drop:

JOHN DEEBLE: Yeah, well they would say that, wouldn’t they? But I don’t think there is any level of viability as such. Look, I was a director of Medibank Private for 17 years so I know something about this.  Private health insurance is not particularly price sensitive. People who buy it, buy it because they want that extra cover or they believe in that particular method of getting their health services. Price doesn’t matter a great deal. The switch that people are talking about cannot be predicted.

The bill stalled in the senate and only passed when a compromise was made where the threshold was only increased by a smaller amount.

And so we move on nearly twelve months and what do we find? Yesterday the following story appeared in The Australian:

PRIVATE health funds have recorded their highest membership rates in seven years, defying warnings that controversial changes to the Medicare levy surcharge would cripple the industry.

In fact, the percentage of take up has increased.

So it seems that Labor and Treasury were right and the coalition, the doctors union (boo!) and the medical insurance industry was wrong.

Funny old world, eh?

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58 Responses

  1. Actually, it is Xenephon and Fielding and the Greens who should cop some of the criticism as well – they were what caused it to be watered down.

    It would be interesting to see if the level of cover has also increased, ie have people gone to a higher level of cover rather than the mickey mouse cover that was offered simply as a means of getting around the surcharge.

  2. I just read the actual article – incredible that it actually comes across as a criticism of the Government by failing to predict the increase and therefore the $300M savings projected won’t eventuate. Also, the ‘record’ level was only because the previous quarter’s figure was revised down by .1%. 🙄

  3. And what did Hockey say last year about the propsed changes?

    “only one way the private health sector can go under the Rudd Government and that’s down”

  4. joni,

    The differences between the way the results were reported by new and smh is stark. Overall the news is pretty good and that is how it was reported in the smh but that news reporting of the same data is just amazing in its negative spin.

    Dutton is standing by the position that the increase in the threshold will result in an exodus – talk about delusional – I wonder what Hockey will say now?

  5. Hockey will say that we have never been better off, and Howard has his full support as PM, and Wokchoices is good for Australia and …..

  6. These figures show that the compromise legislation (raising the threshold to $70,000 p.a.) has been a success. It would be very disingenious to suggest that if the threshold were raised to $100,000 p.a., we’d see the same results. I believed before and still do now, that we’d see too much burden on public hospitals if the threshold were raised to $100,000 p.a. as proposed by Labor. So in my view, Labor were partly correct but too extreme. I’m very grateful once more for the moderate balance of power senators who can help moderate extreme legislation.

  7. Can someone explain to me why the ADA thinks that bringing dentistry under Medicare won’t be of benefit to anyone and possibly make the dire state of dental health in this country worse and roon us all?

    Cause I’m buggered if I can figure that one out.

  8. Alastair,

    Fair point, But Labor did predict that people would drop out if the threshold was increased but that this would save the Government around $300m in reduced rebates. Of course this may have placed increased pressure on hospitals but my experience is that people with private cover still use the public system in emergencies and this is where the bulk of the pressure on the system is. Waiting list have been reduced in most states and, as the smh article points out, people will buy private health insurance if it is worrth it. I fail to see why the Government should prop up an industry that fails to deliver value for money. The very fact that the industry suggested that people would drop out was an acknowledgement that these people didn’t see value for money in their product. If this resulted in premiums increasing, it was further acknowledgement that the medicare surcharge forced people into the private system, and that these people effectively subsidised the rest of the people in the system.

    The conservatives constantly say that reducing taxes stimulates growth by encouraging people to work harder. reducing the threshold should have been in line with this ideology but instead, government support for private sector business prevailed.

  9. Ross,

    Beacuse it will reduce the amount of money (some) Dentists get by placing pressure on them to operate on a bulk billing type system. It is purely self interest that motivates these comments and not the practicalities of the system. The AMA opposed the introduction of medicare and bulkbilling for similar reasons (though I don’t see too many starving GPs).

  10. i had the pleasure of seeing Prof John Deeble give a lecture a couple of years ago at my annual union conference. He is a terrific speaker and he knows how to cut through the spin re medicare and the attempts to destroy a previously acknowledged, world’s best heath scheme.

    in fact, the percentage of take up has increased.

    The problem is the take up has increased, but only for the purpose of getting the tax rebate. Many people have bought into the specially designed private health packages which deliver little health benefit when it needs to be used, just to become eligible for the rebate. The same people are to be seen in our crowded public hospitals when they are sick because their insurance doesn’t cover enough of their medical costs.

    Ross, Can someone explain to me why the ADA thinks that bringing dentistry under Medicare won’t be of benefit to anyone

    Vested interests? Can’t bear the thought of having their exploitative incomes controlled under a universal medicare like arrangement. They say that only the deserving poor should have assistance. Shades of the old AMA vs Medibank argument.

  11. Kittylitter

    I’m not sure the increase can be put down to the tax rebate or threshold avoidance, after all, these have been in place for several years now. The general trend to increase tqakeup may be partly due to this but the increase is at odd with the increased threshold which was predicted to force some people to drop out albeit less than the amount of dropouts anticipated by the initial threshold increases proposed by Labor.

  12. I had a severe dental phobia for about 8 years. When I finally worked up the courage to go again, the dentist wanted to do $14,000 worth of work. And they wanted it paid in one hit up-front.

    So I got a second opinion – the second guy fixed up a botched root canal from several years ago (which originally cost me $1000) and charged me $900, and sent me off to a periodontist. I go every 3 months, and it’s $200 bucks a pop. In my late 30’s, I spent about $8000 on dental work. I’m an implant away from coping financially to complete ruin if something dire happened and needed immediate attention.

    But I’m a single bloke on an average wage (60K+), and I could probably scrape something together. How on earth would a single income family with a couple kids and a mortgage cope?

    I’d like to see some of our pollies try to get elected with a mouthful of black stumps and gaps. Wouldn’t happen.

    I swear, I hear this crap from the ADA and want to grab them by the scruff of the bloody neck and slam their heads into a brick wall until their own teeth get spat out of their bloody nostrils.

    F***ing a*seholes.

  13. That’s a bit off-topic, I know. Sorry about that. Needed to vent.

  14. vent away Ross, vent away – pretty sure most of us have similar sentiments

  15. Dave55
    Happy to stand corrected dave.

    I’m actually more interested in the inequity of the system, how wealthy australians receive more in public funding even though they are supposedly ‘private’.

    from the Doctors Reform Society Submission to Australian Health and Hospitals Reform Commission.

    A rich Australian on $250,000 per year can take out a $3000 PHI policy, receive a rebate of $900 and an exemption from the Medicare Levy of $2500, be $600 better off, and then have a taxpayer funded procedure in a private hospital, and avoid the public queue. That’s inequitable, but it gets worse. The private hospital procedure costs the taxpayer as much as the public hospital procedure, as documented by Harper et al in 2000 (7).
    There were no replies to this study from the private hospital or private health insurance industry, suggesting they could not fault the methodology and wished to avoid discussion which might demonstrate clearly how inequitable the taxpayer support of the publicly funded pseudo private industry is.

  16. Kittylitter

    I don’t have any figures or surveys to support what I said but given the only change is the raising of the threshold, I can’t see how the increase can be attributed to a policy that has been in place for more than 5 years; particulary when the only change introduced by the Government would suggest that take-up should reduce.

    Perhaps the increase resulted in better products being offered and people saw better value in them, esp when the tax threshold and 30% rebate are factored in. Not sure – you could be right that the rebate and threshold are still driving factors in health insuurance take-up.

    Agree totally about the inequality issue. As I noted above, it was the people forced into the private system that wouldn’t otherwise see value in the product (and probably take out the lowest cover just to avoid the additional tax) that subsidise the rest of the people in the system. I don’t see the equitey in this eitehr, particularly when these people are probably those on the lower income.

  17. Dave55, on February 19th, 2009 at 11:13 am Said:
    Of course this may have placed increased pressure on hospitals but my experience is that people with private cover still use the public system in emergencies and this is where the bulk of the pressure on the system is.

    Dave in an emergency there is no option, the ambulance takes you straight to the nearest public hospital where there is an available bed.

    My mother was a member of a private medical scheme for over 40 years and yet my father still ended up in a public hospital. What the heck, not much difference except maybe a better menu. After dad’s passing, mother cancelled her private health insurance.

    Ross..I’m with you. In the ye olde days 3 kids, 6 monthly dental check ups and all that you had to do was hand over your Medibank card. Perhaps someone here with young kids would like to post about how much 3 kids x 3 small fillings would cost, but my estimate is around the $600.00 mark.

    My (less than) favourite is youngest daughter crying her eyes out on the phone from the dental surgery – she needed emergency dental treatment, has excellent teeth but had an abcess, had been in extreme pain for 2 days. The dentist demanded TWO THOUSAND DOLLARS up front before they would treat her. Callous BASTARDS!!

  18. How to avoid the 1% Medicare levy surcharge and private hospital in-patient gap. A blatant case of “to have one’s cake and eat it too” I’d say.

    http://www.theaustralian.news.com.au/story/0,25197,24858227-2702,00.html

    http://www.news-medical.net/?id=44562

    Sorry all, don’t know how to create a link – can someone help?

  19. Links worked automatically – brilliant!

  20. Dave in an emergency there is no option, the ambulance takes you straight to the nearest public hospital where there is an available bed.

    And public hospitals don’t have the luxury of going on Emergency bypass like private ones do.

    Even privately held insurance will only cover for transport to nearest public hospital eg an extract from Teachers Federation Health.

    Ambulance costs are not covered under Medicare. Teachers Federation Health Ambulance cover will protect you from potentially expensive ambulance costs. Ambulance cover can be taken on its own or combined with Extras cover. Teachers Federation Health will pay 100% of medically related ambulance costs including air ambulance to the nearest public hospital.

  21. I would love to start some type of campaign where, whenever you hear something that is complete and utter twaddle and an obvious con-job, run an ad in a newspaper addressed to the relevant knobhead/s and underneath, a large photo of a hand giving the finger and the legend “Up Yours”.

    For example, the ADA reaction to dental care. Or the banks plan to charge a couple bucks to check your balance. Or those a*sewipes who want to raise the retirement age to 67 or 68.

    Dear ADA / Bank CEO / Statistical a*sewipes who’ve never done an honest day’s work in your life …

    We don’t believe you any more.

    Photo of finger.

    Up Yours.

    Authorised and paid for by the several hundred thousand Australian citizens who reckon you’re full of it.

  22. From your bottom link RN, re patient’s in public hospitals being asked to use their PHI.

    …This has been rejected by the Australian Healthcare and Hospitals Association, which represents the public health sector, as not a true picture of what the figures show and action which would be illegal.

    At present Canberra requires that all patients be given access to free public hospital services, and they are not forced to use their private health insurance to fund their treatment …

    i know it’s true because I’ve seen it happening. The pt is not ‘forced’ to use their PHI but it is requested of them (by the consultant doctors).

  23. oops

  24. Maybe the extra take-up is all scared people who’ve seen too many media reports of public hospital mistakes lately, there surely have been a lot of them in the last few months.

  25. deb

    Possibly but as min and other have pointed out, most of these issues have occured in overrun emergency departments which is where even private patients are taken.

    I suspect mistakes occur in private hospitals as well but the person who is affected is compensated and hushed up before new gets out, no such luck with public hiospitals and tabloid journalists willing to pay for horror stories about the public system.

  26. Dave55, an example is:

    http://news.theage.com.au/breaking-news-national/gap-between-private-public-hospitals-20090215-87xb.html For every baby that dies soon after birth in an Australian private hospital, three die in the public system.

    Women who give birth in public hospitals are also more than twice as likely to suffer tearing, or that their babies will need resuscitation, according to the alarming findings of a new study.

    Note that the above does not have journo’s name attached and so is likely to have been a press release.

    And then we have:

    http://www.theage.com.au/national/many-more-caesareans-in-private-hospitals-20090217-8a9x.html DOCTORS at private hospitals are performing twice as many caesareans and three times the number of inductions on healthy first-time mothers as are carried out in Victoria’s public hospitals.

    However, this time it’s from a journo…

    Now if I was a suspicious type of person, I would be thinking that the press release came from a public hospital organisation preempting the written piece from a journo.

  27. If you were really sick you would wish (as did Kerry Packer) to be treated in a public hospital, that is where the expertise is.

    Private hospitals rely more on elective surgery for their profits, they are not interested in expensive, chronic, medical conditions which they prefer to shunt over to the public system.

  28. Kittylitter:
    At present Canberra requires that all patients be given access to free public hospital services, and they are not forced to use their private health insurance to fund their treatment …
    i know it’s true because I’ve seen it happening. The pt is not ‘forced’ to use their PHI but it is requested of them (by the consultant doctors).

    I know its true as well Kittylitter since I witness privately insured patients refusing to use their PHI in almost every instance as inpatients in public hospitals.

  29. Kittlitter
    Private hospitals rely more on elective surgery for their profits, they are not interested in expensive, chronic, medical conditions which they prefer to shunt over to the public system.

    Its all about predictable LOS & predictable outcomes (therefore predictable profits).

    And then there is this from http://www.news-medical.net/?id=44562

    “According to Australia’s biggest health fund, Medibank Private, expensive and complex surgical operations which were once carried out in big public hospitals, are being performed more often in private hospitals.
    This has a knock on effect as it is exacerbates problems public hospitals have in finding and retaining surgeons and nursing staff and is a concern within the public system as staff shortages in public hospitals impact on waiting lists and the delivery of treatment.”

  30. Ross Sharp, two of the top properties in this district are now owned by Dentists,and they appear to be at this time, the main ones buying up big on new equipment. Guess the ATO has a flaw in the ten thousand page Tax Act :).

  31. Lang Mack

    So it’s true that we are paying through our teeth 😉

  32. Dave 55,
    Another player who lately entered the field!, is an Undertaker, it’s great fun watching the locals trying to equate what this all means.

  33. It means the dead will live to smile again.

  34. I wonder if dentists will crack the sads if the government suggests a universal dental scheme?

    From: http://www.abc.net.au/pm/content/2008/s2493978.htm

    There are about 650,000 adults waiting for public dental care. On average they wait for about 27 months.

    The Australian Dental Association agrees something must be done to shorten the wait. But the president Dr Neil Hewson says a universal scheme is not the answer.

    NEIL HEWSON: Overseas experience shows that universal dental care schemes don’t work and they become failures and people end up having to seek alternatives.

    Umm alternatives such as a pair of pliers???? http://www.smh.com.au/news/health/glue-and-pliers-for-those-who-cant-bear-to-wait/2005/02/14/1108229934207.html

  35. Min, I notice from that report …

    And so far, she’s [Roxon] failed to win the support of the non-government senators.

    No doubt, Senator Fielding would prefer his pensioner constituents to gum their pet food.

  36. Ross..what you do is to wait until Continental pasta dishes are on special for $1.25 and then you split this into 2 dinners.

  37. “what you do is to wait until Continental pasta dishes are on special for $1.25 and then you split this into 2 dinners.”

    SHEER LUXURY!

    We used to have to split them into five dinners to last the working week when I was a lad!

  38. Reb, you were never a lad. Well maybe you were.

  39. True Min,

    I was a diminutive gentleman.

    I was the one that always chose to wear the formal school uniform which involved a crisp white shirt, school tie, blazer and cap, whereas most of the other boys (actually about 99%) opted for the alternative grey short sleeve shirt and shorts.

    To this very day, I still maintain that there’s simply no excuse for short sleeve business shirts – even in Quensland!!

  40. Continental pasta dishes?! Och aye, laddie, that’s a fancy food, too fancy fer me, fer sure, fer sure. Oi ain’t gonna be eating none of vat foreign muck.

    Oim ‘appy wiv a half tin of Heinz spag in tommyato sauce an’ a glass of water (wivout dat flurescent stuff innit which makes babies grow up funny-looking). Vat’s all I need to keep me ‘appy. Folks these days don’t know when dey’s well off, oi reckons.

    A little starvation never ‘urt no-one.

  41. Reb, fortunately hubby doesn’t have to choose. We live in NSW and he works in Qld. Reflecto shirt and trousers are the go teamed off with a rather nice pair of steel capped safety boots. Once home, one sheds the aforementioned and following showering dons a nice pair of trendy Quicksilver surf shorts and hopefully matching t-shirt.

  42. Reb..you can’t be more diminutive than me. I stand 5′ 1 and 1/2.

  43. To this very day, I still maintain that there’s simply no excuse for short sleeve business shirts

    eek!

  44. Dinnae geez any a’ that Etalian shite, those tally b@stads didnae ken whose side they wer an in ra war n’ that!

  45. Ross and Reb..you must be channelling my grandmothers.

  46. you must be channelling my grandmothers.

    Oi loikes a noice plate ‘a tripe an’ white sauce.

    Wiv jelly fer afters. Or a bowl a’ junket.

  47. jelly!

    Bloody Luxury!!

    We had to settle for bread n butter puddin’ made fae last week’s crusts mixed wae wallpaper paste…

  48. Ross..what about smoked cod and braised brains.

    Ohh junket, I love junket and bread and butter pud with sultanas and ‘frogs eggs’ (tapioca pudding).

    Mind you, this is probably why the oldies live to their 80’s and 90’s instead of dropping off the perch in their 60’s as the current generation is likely to do.

  49. My ex was (is?) from Ecuador and used to cook tripe in a peanut sauce. I used to vacate the flat when he would cook it for his latino friends…. (joni gags like a reb in an airport).

  50. I just had a look at the link. Amazing, I used to be reasonably articulate and rational.

    Joni – “My ex was (is?) from Ecuador”

    Did you ever visit? It’s a fantastic place.

  51. Completely off topic, however I was bottling a brew and heard on the ABC that Crissy Moan is such a Lib. that he wore a Lib. badge to kindy or thereabouts, and was out drumming up business for the Libs.when was a tweeny, about a twelve year old. Still is.
    He sort of looks like a Ring Tail Possum that just dropped an apple, I apologize to any Possums reading this.

  52. Was just thinking, when his balls drop and his voice takes on a deep timbre , this will be a force to be reconed with.

  53. Tom

    Yeah – I went to Guayquil, Machala, Quito and Otavlo.

    Loved it.

  54. Ah Latin Americans………..women that is!! 😉

  55. I didn’t think much of Guayaquil, but I loved Quito. Also Banos, in the Andes, very spectacular.

  56. “Mind you, this is probably why the oldies live to their 80’s and 90’s instead of dropping off the perch in their 60’s as the current generation is likely to do.”

    That’s a strange thing to say Min.

    I’d rather live a shorter life than contribute to the SLAUGHTER.

    If I can help it.

    My cats can’t help themselves. I can.

    (Moby – Why Does My Heart Feel So Bad)

    N’

  57. N’..I was talking tapioca pudding. Simple home cooking and food that contained few artificial flavorings and colorings.

  58. “I was talking tapioca pudding. Simple home cooking and food that contained few artificial flavorings and colorings.”

    Just like my Gran. She was a real sweetie…but I imagine we’d spar a bit over recipes these days, if she weren’t six feet under, poor thing.

    Didn’t you know I turn into Captain Conscience after midnight…:)

    Gran always had these sayings. One was “The Devil will get you back” if one was naughty. I had a migraine headache all day. She’d be smiling & wagging her finger…& saying, “told you so”.

    N’

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