AMA submission to private health insurance review
The AMA today released its submission to the Government's review of private health insurance regulation.
AMA President, Dr Kerryn Phelps, said the submission includes:
- A rejection of managed care scenarios that allow health fund clerks greater control over doctors' clinical decision-making. Such interference would delay or deny some patient treatments and the health funds would become legally liable for adverse health outcomes arising from their involvement in clinical decision-making.
- Removing the need for the Government to approve premium increases. Under the current system, the funds are forced into a cat and mouse game of asking for much larger increases than they really want so the Government can play the charade of only allowing a smaller increase.
- A recommendation that controls over all gap insurance should be deregulated and left to the expressed preferences of patients in the types of products they choose.
- Criticism of excessive regulation that has led to a lack of competitive pressure on the funds. As a result, the funds have become fat and lazy.
Dr Phelps said the AMA submission refutes many of the mischievous comments by the AHIA's Mr Russell Schneider reported in the Australian Financial Review of 30 May 2002.
"Mr Schneider continues to peddle the fantasy that all the problems with the private health insurance industry are caused by everybody other than the private health funds themselves," Dr Phelps said.
"The Schneider solution is always 'blame the doctors'.
"Mr Schneider attacks the 'uncontrolled proliferation' of doctor-owned freestanding day surgeries as a major cost driver in the health system.
"On the contrary, it is much cheaper for a procedure to be performed in one of these centres because the patient returns home on the same day.
"Perhaps Mr Schneider would prefer patients to be admitted to a much more expensive major hospital? I don't think his employers would subscribe to that theory," Dr Phelps said.
The rise of day surgery has been one of the significant trends in health in the last 20 years.
It now represents 56 per cent of all private hospital admissions and it is still growing strongly.
Freestanding day surgeries represent 14 per cent of all private hospital activity but only 4 per cent of revenue.
Private freestanding day facilities represent less than 3 per cent of benefits paid by health funds.
Dr Phelps said that if Mr Schneider were serious about reducing the cost of premiums, the place to start trimming would be the management expenses of the major health funds.
"The AMA submission shows that health fund management expenses account for more than 15 per cent of benefits paid," Dr Phelps said.
"Extending the funds' ability to reimburse other out-of-hospital services such as GP consultations, in the way being proposed by Mr Schneider, would only lead to further cost and premium increases.
"As this proposal stands, there is plenty of benefit for the funds.
"There could be a limited role for private health insurance in some areas of general practice that could benefit GPs, their patients and the funds, but so far Mr Schneider and the AHIA have shown no interest in developing this in consultation with the medical profession," Dr Phelps said.
The AMA submission is available on the AMA website or by contacting AMA Public Affairs on 02 6270 5493.
CONTACT: John Flannery (02) 6270 5477 / (0419) 494 761
Sarah Crichton (02) 6270 5472 / (0419) 440 076