Health At Too High A Premium
Sydney Morning Herald
Friday March 4, 2005
The increase in health insurance premiums is but the latest warning, if warnings were needed, of health care costs that are out of control. The pending 8 per cent average rise in premiums follows other equally steep increases in recent years. Worse, those increases are set to continue.
The Government needs to increase efforts to rein in costs across the sector. It can begin by reassessing the 30 per cent rebate on health insurance premiums. The rebate is hugely expensive, at more than $2.5 billion a year, yet was not effective in boosting private fund membership until it was married to Lifetime Health Cover with its threat of higher premiums for those who deferred health insurance. The two measures were intended not merely to increase numbers, but to win younger people to private cover. Instead an Australia Institute study shows that the number of Australians under 55 with health cover has actually fallen by 4.8 per cent over the past three years, while the number over 55 years is up by 13.7 per cent. It is a trend that can be made only worse by the Coalition's election commitment to increase the health insurance rebate for older people. Given that the cost of benefits paid to an 80-year-old averages eight times that for a 40-year-old, premiums will only go on rising as insurers find themselves with an ever older client base. The Government strategy has helped lock the health funds into an escalating spiral, where rising payouts will continue to outstrip increases in premiums. At least while the Government continues to pay $2.5 billion a year in private insurance premiums, it is in a good position to increase the pressure for greater efficiency and rationalisation in the private health insurance industry. Does competition really demand more than two dozen private health insurers? Turning from insurance to practice, the Government must seek to reverse the drift of minor procedures from doctors' rooms to day surgeries and hospitals. And for those who must go to hospitals, the Government must identify more innovative ways of shortening their stay. Most difficult of all, the Government must seek to change community attitudes and the expectation of the insured that if a problem can be diagnosed, it should be treated. After paying their premiums, it is not surprising that the insured feel they have a right to the most elaborate care for even the most minor ailments, and to pay nothing - or almost nothing - from their own pockets. Certainly, private hospitals, doctors and the health industry generally have no financial interest in dissuading patients from that point of view. The Federal Government gives the distinct impression of being a willing captive of the private health sector and the expectations of its clientele. One way or another, it is paying the piper and it should call the tune. It is not enough for the Health Minister, Tony Abbott, to say, "Let's hope that ... next year's applications [for increased premiums] are lower." They will not be lower unless the Government acts, and quickly.
© 2005 Sydney Morning Herald
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