Category: Health Reform

DESPITE NIB POSTING $184 MILLION PROFIT ANOTHER 57000 AUSTRALIANS DROP PHI COVER

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[vc_row][vc_column][vc_column_text]The quarterly Private Health Insurance figures show another 57,512 insured persons dropped out, with the largest decrease in coverage during the quarter coming from people aged 20 and 24, the very group that needs to remain in the system to reduce the risk rating.

Despite this private health insurers collected $23.9 billion in premiums, paid $20.5 billion in benefits and reported net profits after tax of $1.37 billion, 15 per cent higher than two years ago.

NIB chief executive Mark Fitzgibbon said that the “benign” claims environment had resulted in NIB upgrading its full-year profit forecast by 14 per cent. Although private health insurers provided firm commitments that cuts to the Prostheses List benefits would be fully passed on to consumers, NIB’s profit upgrade shows the end result will be a surge in NIB’s profits.

Public frustration with insurers increasing annual premiums by more than double the rate of wage growth comes as a Parliamentary Senate inquiry recommended passing legislation that includes key components of the Minister for Health, Greg Hunt MP’s, wide ranging package of reforms to make private health insurance simpler and more affordable for Australians.

Stakeholders are increasingly voicing concerns around certain components of the reform package. The ambitious timeline for introducing Basic, Bronze, Silver and Gold policies from 1 April 2019 is increasingly problematic.

Spinal surgeon, Dr Matthew Scott-Young, says his field will be one of the hardest-hit by the reforms. Some surgical interventions that consumers commonly rely on such as spinal fusion, would require the highest and presumably most expensive level of cover despite many of these procedures being available today to people holding lower levels of cover.

“People like the reliability and certainty with their insurance and these changes, while in good faith, don’t deliver that,” Dr Scott-Young said.

“The analogy would be that a lady who was pregnant came into hospital to deliver their child through natural birth, but unfortunately there was a complication such that a caesarean section had to be done and they found out they weren’t covered.”

One supporter of the government’s private health insurance reforms has been the Medical Technology Association of Australia (MTAA), but they too have raised concerns around the product categorisation issue of gold, silver, bronze and basic policies. The MTAA CEO, Ian Burgess, believes the proposed categorisations would negatively impact on consumers, leaving them worse off compared to the current system.

“We have expressed to the Health Minister our concerns that insurers will choose to no longer offer these services, like spinal fusion, on the lower categories. This could lead to a further retraction in the number of people with private health insurance or a reduction in the number of people covered by effective health insurance that properly covers them for their needs. In either case there is a risk that further burden would be placed upon public health services for elective surgery and increased waiting lists for common procedures such as joint replacements,” Mr Burgess, said.

“We are discussing with Minister Hunt the need to protect consumers to ensure they are not required to pay higher premiums just to maintain existing levels of insurance coverage as a result of the product categorisations.”[/vc_column_text][/vc_column][/vc_row]

MY HEALTH RECORD OPT-OUT PERIOD EXTENDED

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[vc_row][vc_column][vc_column_text]This was a key request from the Australian Medical Association and the Royal College of General Practitioners and gives Australians more time to consider their options as we strengthen the 2012 My Health Record legislation.

The Government will amend the 2012 legislation to ensure if someone wishes to cancel their record they will be able to do so permanently, with their record deleted from the system forever.

This means any Australian will be able to opt-out of the system permanently, at any time in the future, with their record deleted for good.

The government has said it will also strengthen the legislation to match the existing Australian Digital Health Agency policy.

This policy requires a court order to release any My Health Record information without consent.

The amendment will ensure no record can be released to police or government agencies, for any purpose, without a court order.

The Australian Digital Health Agency’s policy is clear and categorical – no documents have been released in more than six years and no documents will be released without a court order. This will be enshrined in legislation.

As the Australian Digital Health Agency has already stated, contrary to incorrect claims made by unions this week, under the Healthcare Identifiers Act 2010, specifically subsection 14(2), healthcare providers cannot be authorised to collect, use or disclose a healthcare identifier, and as a consequence access a patient’s My Health Record, for employment and insurance purposes.

Under the Act it is expressly prohibited and using or disclosing a healthcare identifier without authority is an offence and subject to severe penalties, including two years in jail and a fine of $126,000.

Last week in Alice Springs all health ministers unanimously reaffirmed their support for My Health Record, the national opt-out approach and our steps to strengthen the legislation.

Minister for Health Greg Hunt said he welcomed the bi-partisan support from both Labor and Liberal state governments for this important health reform.

As health ministers noted at the meeting, the expert clinical advice is that My Health Record will deliver better health care for patients.

The Government will also work with medical leaders on additional communications to the public about the benefits and purpose of the My Health Record, so they can make an informed choice.[/vc_column_text][/vc_column][/vc_row]

PRIVATE HEALTH INSURANCE REFORM – WILL IT DELIVER?

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[vc_row][vc_column][vc_column_text]The PHMAC was tasked with developing easy-to-understand categories of health insurance, standard definitions for medical procedures across all insurers for greater transparency and simplified billing, as well as ensuring private health insurance meets the specific needs of consumers living in rural and remote Australia.

While the PHMAC’s measures are expected to be in place by next year’s premium increase, scheduled for 1 April 2019, the questions on everybody’s mind is: will this reform help to deliver lower premium increases or will it only serve to heighten people’s frustration with private health insurance companies?

Consumer advocacy group CHOICE has urged the federal government to scrap its plan to allow health insurance companies to offer discounts to people aged 18 to 29, arguing the move will lead to health funds luring young adults into buying low-value ‘junk policies’.

“While the cost of private health insurance is one of the top concerns that needs to be addressed, cost cannot be looked at in isolation. Discounted private health insurance cover isn’t worth it if you don’t need the cover in the first place,” says CHOICE Campaigns and Policy Team Lead, Katinka Day.

“A cheap policy that adds little or no tangible value is a poor outcome not only for the individual, but also for taxpayers who are subsidising a private system.”

This was reinforced by former chief of the health insurers lobby group and board member of a not for profit health fund Russell Schneider in his submission to the Senate inquiry. He claims that unless 100,000 extra young people buy health insurance, premiums will rise for everyone else to cover the discounts.

The Consumer Health Forum remains concerned the discounts on health insurance premiums for young people under 30 will erode the community-rating principles and further entrench a two-tiered system.

“Such changes to health insurance rules seem designed largely in the health funds’ interests to shore up declining member numbers but go nowhere far enough to respond to the frustration and concerns many consumers have about their health cover,” the CEO of the Consumers Health Forum, Leanne Wells, said.

“The latest statistics showing a significant year-on-year overall fall in health insurance members, particularly the 5.3 per cent drop among those in their 20s, highlights the need for a searching examination of Government assistance and regulation of health insurance.”

The Medical Technology Association of Australia supports the Government’s private health insurance reforms and its intent to address the issues of value, affordability, simplification and transparency of health insurance for Australian consumers.

But its submission focused on concerns around the product categorisation issue of gold, silver, bronze and basic policies. It believes the proposed categorisations would negatively impact on consumers, leaving them worse off compared to the current system.

“The exposure draft released by the Department of Health proposes restricting coverage for some surgical interventions that consumers commonly rely on such as spinal fusion, joint replacements, insulin pumps (for which there is no public hospital alternative), pain therapies such as spinal cord stimulation, hearing implants and intraocular lenses. Under the Department’s proposed model, all of these procedures would require the highest and presumably most expensive level of cover despite many of these procedures being available today to people holding lower levels of cover,” the CEO of the Medical Technology Association of Australia, Ian Burgess, said.

“We have expressed to the Health Minister our concerns that insurers will choose to no longer offer these services on the lower categories. This could lead to a further retraction in the numbers of people with PHI in total, or a reduction in the number of people covered by effective health insurance which covers them for their needs. In either case there is a risk that further burden would be placed upon public health services for elective surgery and increased waiting lists for common procedures such as joint replacements.”

“We are discussing with Minister Hunt the need to protect consumers to ensure they are not required to pay higher premiums just to maintain existing levels of insurance coverage as a result of the product categorisations.”

With these reforms due to come into play from 1 April 2019, at the same time as premium increases and the likelihood of a Federal Election in May 2019 you can be certain health will be a major factor in the campaign.[/vc_column_text][/vc_column][/vc_row]

DIGITAL HEALTH WILL BENEFIT PATIENT OUTCOMES

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[vc_row][vc_column][vc_column_text]The revelation sparked the Minister for Health, Greg Hunt, to announced amendments to the legislation to assure Australians their records would not be readily available without the appropriate oversight.

The COAG Health Council unanimously endorsed the MyHealth Record legislation and the national opt-out approach.

In a joint statement COAG health ministers “reaffirmed their support of a national opt out approach to the MyHealth Record. Jurisdictions noted clinical advice about the benefits of MyHealth Record and expressed their strong support for MyHealth Record to support patient’s health. Ministers acknowledged some concerns in the community and noted actions proposed to provide community confidence, including strengthening privacy and security provisions of MyHealth Record.”

Speaking of the benefits of digital health for patients Australian Digital Health Agency CEO, Tim Kelsey, said “having a MyHealth Record means that your important health information such as allergies, current conditions and treatments, medicine details, and pathology and diagnostic imaging reports can be digitally stored in one place.”

“MyHealth Record also places Australians in control of their healthcare and gives authorised healthcare providers secure digital access to key health information at the point of care, wherever that may be,” Mr Kelsey said.

The Medical Technology Association of Australia (MTAA) CEO Mr Ian Burgess echoed many of the healthcare stakeholders who spoke in support of the My Health Record.

“With MyHealth Record looking to store medical device information digitally it’s an invaluable step in the right direction. Storing a minimum set of information (brand, model, serial number) will also support better and more effiicent post-market surveillance.

“MyHealth Record data is critical to the implementation of value-based healthcare in Australia at a national or jurisdictional level and is consistent with Government’s desire to contain healthcare costs and move to a patient-centric approach to healthcare,” Mr Burgess said.

The nursing profession will be a major beneficiary and this week the Australian College of Nursing CEO Adjunct Professor Kylie Ward indicated they have a major role in answering patient’s questions.

“Due to the role that nurses have as the interface of the health system, patients will turn to them to discuss participation in the initiative.

“Electronic health records will definitely improve clinical safety and ACN supports the introduction of My Health Record but protecting patient privacy is also a key priority for nurses, Adjunct Professor Kylie Ward said.”

Catholic Health Australia CEO Suzanne Greenwood this week called on all Australians to rationally consider the transformative benefits of the My Health Record to patient treatment, particularly in complex aged care.

“Some in our sector estimate up to 25 per cent efficiency gains through reduced duplication of pathology tests, better coordinated care, and treatment decisions, particularly in aged care where older Australians are more likely to suffer from complex co-morbidities,” Ms Greenwood said.[/vc_column_text][/vc_column][/vc_row]

CHRONIC PAIN THE FOCUS OF THE WEEK

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[vc_row][vc_column][vc_column_text]More than 6.9 million Australians live with a musculoskeletal condition, and around 81,200 Australians visit their GP everyday for a pain-related issue.

According to Painaustralia – the national peak body working to improve the quality of life of people living with pain – there has been a rise in opioid prescriptions for treating pain, increasing by 24% between 2010-11 and 2014-15.

The recognition of the need to tackle opioid addiction is something that has been widely accepted by state and federal government.

However, concerns have been raised over the government’s plans to limit chronic pain management options through the new private health insurance categorisation reforms. Under new categorisations – gold, silver, bronze and basic – chronic pain therapies would only be available for consumers who can afford to be on the highest ‘gold’ level category.

It would mean any moves to limit access to therapies such as spinal cord stimulators for the management of chronic pain would work against any efforts to arrest the increasing opioid dependency among chronic pain sufferers.

Current spinal cord stimulators use novel waveforms that are paraesthesia-free, meaning patients can drive and sleep with the therapy. This has led to improvements in quality of life measures.

A January 2017 study, sponsored by MedTech innovator Abbott, found average daily opiod use declined or stabilised for 70 percent of chronic pain patients who receive a stimulator, compared to opioid use before the implant.

Restricting insurance coverage for proven chronic pain therapies will undermine the value of private health insurance for consumers, as well as push the issue of chronic pain down the track.

Painaustralia has developed a National Pain Strategy to serve as a framework for best practice pain management. The Strategy has been given broad endorsement by an eminent group of experts from pain medicine, allied health, drug and addition medicine, mental health, rural health, general practice, pharmacy and rheumatology, as well as consumers.

Painaustralia CEO, Carol Bennett said the issue was attracting bipartisan support from both the Minister for Health, Greg Hunt MP, and the opposition’s health spokesperson, Catherine King MP.

“There has been unprecedented level of support for the issue of chronic pain in Australia recently, and we appreciate the support of the Australian Government”, Ms Bennett said.

“This long misunderstood and neglected health issue is now receiving the attention it deserves from all sides of politics, a positive move towards ensuring the best possible outcomes for individuals, families, communities, workplaces, as well as the Australian economy.”[/vc_column_text][/vc_column][/vc_row]

THE UNINTENDED CONSEQUENCES OF R&D TAX INCENTIVE CHANGES

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[vc_row][vc_column][vc_column_text]Treasury consultation on the R&D Tax Incentive (RDTI) changes that closed this Thursday has raised a number of concerns from the MTP sector.

Despite successive governments having identified the economic and other benefits that derive from encouraging the conduct of clinical trials in Australia, stakeholders like Research Australia are concerned the changes will have unintended consequences.

“The Bill will reduce the level of government support for the R&D undertaken by thousands of small research-intensive companies, regardless of reductions in the corporate tax rate. This has a direct impact on the capacity of these companies to undertake research and development, including their ability to employ the staff they need,” said Nadia Levin, CEO of Research Australia.

“And it is occurring against the backdrop of a recent fall in private sector investment in R&D when the Government’s ambition for future Australian prosperity relies on an ‘Innovation Nation’,” said Ms Levin.

Clinical trials generate the evidence required by the Therapeutic Goods Administration to enable the safe and effective sale of medical devices in Australia.

The number of clinical trials involving medical devices continues to increase from 119 to 159 in just three years, showing the strongest growth compared with others in the MTP sector.

The Medical Technology Association of Australia (MTAA) focused its concerns with the proposed definition of clinical trial which could see that growth in recent years being curbed by the proposed legislative definition.

“The proposed definition of clinical trials only covers medicines, it needs to reference the TGA definition of medical devices to ensure medical devices are covered by the $4 million cap exemption,” said Ian Burgess, CEO of MTAA.

“Limiting the current definition to the trials being conducted in humans may inappropriately limit the scope of the exemption provisions. Firstly, for many medical devices, expenditure on human clinical trials is not as significant as in the preclinical studies and therefore the value of applying the cap exemption provisions for medical devices is limited.”

“The significant cost of preclinical studies is a unique consideration for medical devices and it may be possible that in some instances, these costs exceed those of conducting the clinical trials in humans,” said Mr Burgess.

As such, MTAA considers the exemption provisions should be implemented in a way that would allow medical device companies to receive an uncapped tax refund for conducting preclinical studies.

Additionally, the new calculation method of the RDTI will see start-ups with turnover under $20 million and in tax loss, lose a much-needed portion of their cash refund.  Eligible expenditure, previously resulting in a 43.5 per cent claim, will now be eligible for only a 41 per cent refund. For each $1 million of expenditure, the loss will be $25,000.

“Despite the welcome protection of clinical trials in RDTI reform package, the details of the definition and eligible expenditure remain uncertain and we now find that biotech and medtech companies claiming refunds will be hit with a 2.5 per cent loss of refund as soon as the legislation passes, due to a new calculation method,” said Lorraine Chiroiu CEO of AusBiotech.

“The double-pronged loss of benefit resulting from the new calculation method and the new intensity measure, along with the uncertainty on how the clinical trials protection will work, creates a serious threat to this important program – and it should not be rushed,” said Ms Chirou.

Despite RDTI being the subject of multiple government consultations since 2013 it looks like the MTP sector is going to have to put up with a less than satisfactory system. Time will tell if clinical trial numbers and R&D expenditure drops in 2019 and beyond.[/vc_column_text][/vc_column][/vc_row]

GOLD, SILVER, BRONZE AND BASIC IS IT JUST A BRANDING EXERCISE?

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[vc_row][vc_column][vc_column_text]Earlier this week Minister Hunt invited stakeholders to comment on the exposure draft of the Private Health Insurance (Reforms) Amendment Rules 2018 (the Rules). The measures contained in the Rules will give effect to elements of the private health insurance reform package.

One industry with a keen interest in ensuring consumers continue to receive access to life saving and life changing medical treatment through their private health insurance is the medical technology (MedTech) industry.

Speaking on behalf of MedTech innovators, Medical Technology Association of Australia (MTAA) CEO, Ian Burgess, said that while MTAA supports the intent of the government’s reforms, there was still concern as to whether complex health insurance policies being peddled by private health insurance providers would continue due to the differences in coverage across a large number of hospital treatment categories.

“MTAA has already played a significant role in addressing the rising financial burden of private health insurance, particularly in terms of value and affordability. Our industry agreed to a reduction in the benefits paid by insurers for devices on the Prostheses List. These actions resulted in savings to insurers of around $1.1 billion, over four years, and underpinned the lowest premium increase in 17 years,” Mr Burgess said.

“The longer and more specific the list of services for inclusion/exclusion in the insurance product tiers, the more complicated the insurance product will be and lead to continued consumer confusion about what they are purchasing.

“Many of the hospital treatments that are flagged to be exclusive to the gold category are associated with clinical conditions with a high and/or growing prevalence. If insurers do not maintain existing coverage for patients with these conditions who are currently covered by low and mid-tier insurance products, consumers will be required to upgrade their cover to ensure they maintain existing levels of coverage, thereby increasing the cost of premiums at the household level.”

Australian Private Hospital Association CEO, Michael Roff, said that while the categories have the potential to make the system easier to understand, there remain concerns about the retention of junk policies.

“It’s disappointing. Not only has the government not addressed the issue of junk policies, it has, in fact, entrenched them with the new ‘basic’ category. Junk policies are a major cause of consumer dissatisfaction when they discover they don’t have cover for private hospital treatment when they need care,” Mr Roff said.

Despite the concerns raised by other industries, Private Healthcare Australia – representing the private health insurance industry – welcomed the government’s announcement saying the new system marks a major improvement to how consumers choose and use their private health insurance.

“Over a two-year period, we have gone through health fund products line by line to classify them into Gold, Silver, Bronze and Basic categories depending on the cost of the product, and the level of cover provided,” Private Healthcare Australia CEO, Dr Rachel David, said.

“This has been a complex process and a balancing act, because we need to ensure consumers have access to products which are both affordable and provide value for money across all life-stages.

“We have been careful not to unintentionally increase complexity, or introduce product changes that would either increase premiums or reduce coverage unnecessarily,” Dr David said.

Many in the industry will continue to look closely at these reforms to see whether they will help stem the flow of consumers opting-out of the private healthcare system, in favour of the public healthcare system.[/vc_column_text][/vc_column][/vc_row]

UNDERSTANDING THE DIFFERENCES – PUBLIC & PRIVATE MARKETS

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[vc_row][vc_column][vc_column_text]Australia’s healthcare system is one of the world’s best, providing a range of services from population health and prevention, through to general practice and community health; emergency health services and hospital care; and rehabilitation and palliative care.

What makes Australia’s health system different compared to other countries, is its voluntary private healthcare system which helps complement and supplement the country’s public system.

This means Australians have the option of being covered by the public Medicare system (which provides access to free treatment and accommodation in a public hospital), or they can choose to be covered by a combination of Medicare and private health insurance.

Australians with private health insurance are eligible to receive funding to cover some of the costs of their care in a private hospital. They are also able to use a public hospital, although they may be charged for it.

The complexity of Australia’s healthcare system has played a considerable role in influencing the cost of medtech devices between the public and private healthcare systems. These complexities include:

  • The purchasing arrangements and level of segmentation of the market;
  • The level of technical manufacturer support required; and
  • The level of regulatory hurdles and market delays.

Unlike in the public system, choice of surgeon and choice of medical device is a fundamental benefits of private health insurance cover and we need to work towards ensuring that value remains a cornerstone of our private healthcare system.

The fragmentation of the private healthcare system however, means achieving the same level of efficiencies of the public system challenging.

Take for example the approximately 630 private hospitals that purchase resources such as medtech devices on an as-needed basis, compared to the public sector (i.e. hospitals administered by the state and territory governments) which utilise their public tendering process to drive down prices and choice of devices available in their 695 public hospitals.

As a result, public hospitals can meet the delivery requirements of certain services through their funding arrangements. Whereas private hospitals, due to the lack of infrastructure required to deliver the same services, must rely on the device supplier to cover the costs, causing differences in prices between the public and private sector.

These factors mean comparing prices across public and private hospitals or across international jurisdictions can be problematic or in some cases not appropriate.[/vc_column_text][/vc_column][/vc_row]

AUSSIE INNOVATORS TO DRIVE BETTER HEALTH OUTCOMES

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[vc_row][vc_column][vc_column_text]The four committees, made up of renowned Australians with extensive experience from sectors such as research, technology, innovation and healthcare, will support the Australian Advisory Board on Technology and Health Competitiveness.

In March 2018, we announced the establishment of the industry led Advisory Board that is partnering with the United States Council on Competitiveness (USCC).

Both groups are focusing on collaboration and promotion of Australian technology, innovation and healthcare to boost business opportunities and create better outcomes for patients.

The Advisory Board is co-chaired by Mr Charles Kiefel OAM, Distinguished Fellow of the Global Federation of Competiveness Councils, Dr Larry Marshall, CEO of CSIRO, and Dr Jane Wilson, Director of Sonic Healthcare Ltd.

The Advisory Board is establishing an Australia-US Chief Technology Officer Dialogue.

The Dialogue will connect Australian and US Technology leaders to discuss common challenges, opportunities, and promote business and research collaboration in areas including healthcare, advanced computing, finance and entrepreneurship.

The four committees will help shape the agenda and discussion of the Advisory Board with members contributing their time and expertise on a pro bono or honorary basis.

These efforts will create more opportunities for Australian firms and innovators to learn from leading innovators in the United States.[/vc_column_text][vc_separator][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

STRATEGIC COMMITTEES TO SUPPORT THE AUSTRALIAN ADVISORY BOARD ON TECHNOLOGY AND HEALTH COMPETITIVENESS.

Autonomy

  • Professor Russell Boyce (Chair for Space Engineering at UNSW Canberra)
  • Mr Ric Gros (METS Ignited, growth centre)
  • Dr Nick Barnes (3D vision, Data61)

Healthcare

  • Ms Sue MacLeman (Managing Director MTP Connect (MedTech and Pharma Growth Centre)
  • Dr Rachel Swift (Principal Boston Consulting Group)
  • Professor Karen Reynolds (Dean of Research, College of Science and Engineering, Flinders University and member of the Australian Medical Research Advisory Board)
  • Mr Lucas Litewka (Director, USC Clinical Trials Centre)

Advanced computing

  • Mr James Johnson (CEO, Geoscience Australia)
  • Professor Andrew Dzurak (Director of the NSW node of the Australian National Fabrication Facility (ANFF) UNSW)

Financial systems, access to capital, and entrepreneurship

  • Mr Sam Sicilia (Chief Investment Officer, HostPLUS)
  • Dr Manny Pohl (Bond University)

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DOES AUSTRALIA’S PRIVATE HEALTH SYSTEM NEED EMERGENCY TREATMENT?

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[vc_row][vc_column][vc_column_text]The Government has introduced a range of measures to increase affordability including the $1.1bn cuts to medical devices, providing discounts to under 30-year old’s and forthcoming classification of policies into gold, silver, bronze and basic.

Meanwhile Labor has promised a wide-ranging Productivity Commission review, the first in 20 years, during which it committed to capping annual premium increases to 2% for two years.

Australia has a fantastic health care system that delivers great patient outcomes for the money we spend. Health expenditure should not be a cost but an investment in our community by maintaining a healthy population.

The reality is, surgical volume growth is slowing, a sign that private health insurance (PHI) customers are either electing to delay procedures or go onto the public waiting list. And why might they be doing this? Cost.

Last week the ACCC released its annual report into the private health insurance industry, which called for the industry to make its products more consumer friendly by providing reliable and transparent information about product features and changes to private health insurance policies.

Dissatisfaction with PHI has reached that point that complaints to the Private Health Insurance Ombudsman (PHIO) have increased by 30%, continuing a trend of increasing complaints, which have risen for the fourth consecutive year.

The evidence of increasing profits and retained capital reserves by private health insurers would indicate scope for them to do more on their end.

The Medical Technology Association of Australia’s (MTAA) CEO, Ian Burgess, has pointed to the Prostheses List Agreement, co-signed with the Government, which has resulted in $1.1 billion in cuts, over four years, to assist with the affordability of private health insurance.

“More and more Australians are turning away from Private Health Insurance (PHI) because it is increasingly costly while covering less and less due to exclusions” Mr Burgess said.

“Just last week PHI was claiming a 2% cap on premium increases would lead to eight insurers operating at a loss in the first year and put three on the brink of insolvency in the second.  This is an industry that receives $6 billion in taxpayer subsidies every year.

“The public would be right to seriously question the fundamentals of the PHI industry, if it can’t deal with a 2% cap,” he said.

The increase in out-of-pocket costs is seeing patients not opting for elective surgery in private hospitals and instead going on our public waiting list.

According to a Credit Suisse analyst “utilisation in the short term as long as affordability pressures continue to shift patients into the public system and the government displays low appetite to produce meaningful reforms to reverse this trend.”

Australia’s largest private hospital provider Ramsay Health Care, revealed this problem recently.

“We are facing more challenging conditions in Australia with lower growth in procedural work and inpatient admissions, which has adversely impacted casemix in our Australian hospitals,” Ramsay’s managing director, Craig McNally, said.

“Given the current climate around private health insurance and affordability, we expect this trend will continue into 2019.”

The problem is exacerbated for the private hospitals who over recent years have aggressively increased the number of beds and brownfield sites, leaving them with a quagmire of less patients and more beds.

The Weekend Australian revealed that internal government documents had warned the Health Minister reforms were needed to prevent a decade-long decline in the sector.

The Office of Best Practice Regulation wrote that “Without a discussion of how consumers might take advantage of reforms to change their level of private health insurance, or how the take-up by younger people might be affected, it is difficult to see how the reform option as a package is intended to result in a net benefit for consumers, private health insurers and the community.”

Many across the healthcare sector have raised concerns that nothing in the next 12 months will see PHI increase its value proposition to consumers and ever increasing profits will only fuel the rage.[/vc_column_text][/vc_column][/vc_row]