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Tech & Science Private health system in a 'death spiral', says expert, but what can be done to save it?

01:36  30 november  2019
01:36  30 november  2019 Source:   smh.com.au

'Hospital-in-the-home revolution': Hunt's plan to shake up private health insurance

  'Hospital-in-the-home revolution': Hunt's plan to shake up private health insurance Health Minister Greg Hunt wants health funds to be able to cover specialist treatment delivered outside hospitals at a lower cost, starting with mental health and orthopaedics. He hopes to roll out the proposed regime by mid-2020 so insurers can factor in cost savings and keep a lid on premium increases in 2021.Currently, Australians can only claim on their hospital cover for treatment received in hospital, a rule Mr Hunt said created "perverse outcomes and perverse incentives".

I found it surprising how many thousands of dollars mums who choose to give birth in private hospitals do pay. She said these costs could be particularly distressing for parents without access to paid maternity leave. Private health insurance review finds reforms failed and industry in a ' death spiral '.

A Princeton Univeristy health economist told the liberal website Vox that the Obamacare state exchanges were in a " death sprial" and nothing could be done to save Uwe Reinhardt: I always joke about it like this: If you got a bunch of Princeton undergrads to design a health care system

Greg Hunt wearing a suit and tie: Health minister Greg Hunt says he's determined to keep funds' premiums increases to 3 per cent this year.© AAP Health minister Greg Hunt says he's determined to keep funds' premiums increases to 3 per cent this year.

George Savvides, who ran Medibank for 14 years until 2016, describes the exodus of young people from private health insurance as akin to “a climate change event in the health system".

The Grattan Institute health economist Stephen Duckett is more blunt, saying the trend has put the private system into a "death spiral" and that urgent surgery is required to save it.

Whatever the turn of phrase, the symptoms are clear: the rising cost of hospital treatments is leading to higher health insurance premiums which people - particularly young ones facing anemic wage growth - can't afford to pay.

Private hospitals must hold 'greedy' doctors to account to save private health care, says Grattan Institute

  Private hospitals must hold 'greedy' doctors to account to save private health care, says Grattan Institute Think-tank report says a handful of specialists charge patients more than twice the official Medicare Benefit Schedule fee, resulting in unhappy surprises for patients when they receive the bill.The Grattan Institute has made a raft of recommendations identifying $2 billion in possible savings a year, declaring if the changes are realised, it could "save private health care in Australia".

As noted, there was protection against this death spiral in the ACA—by mandating that companies keep poor and sick people in the same group and issue Two weeks before the new version of the bill passed the House, the Center on Budget and Priority Policies laid out exactly what could happen to

Bertolini said his company has not decided whether to continue selling insurance in the exchanges in 2018, but it already has exited most of the Cynthia Cox, associate director of a program focused on health reform and private insurance at the Kaiser Family Foundation said that in a true death spiral

As they cancel their membership (the number of people aged 20 to 34 with cover is down 11 per cent over the past five years) they take the premiums that subsidise older and sicker members with them, which Duckett says forces premiums higher again.

“The government policy of having a significant part of the Australian population in private health, to take the pressure off the public system, starts to unravel," says Savvides. "If that gets out of balance you end up with a very expensive public system with long queues and pretty unhappy customers."

The rate of hospital insurance coverage has dropped from 47.3 per cent of the population to 44.1 per cent over the past five years, according to the latest data from the Australian Prudential Regulation Authority. And the amount funds have to pay out in benefits is rising faster than their premium revenue from members (3.6 per cent versus 2.6 per cent for the year to September) according to APRA, which has raised concerns about funds' financial stability.

My Health Record exposed to security risks

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Australia could soon find itself in a " death spiral ", where young and healthy people abandon private health cover, according to a bleak new The Grattan Institute report paints a bleak picture of the private health system , saying it has become "riddled with inconsistencies and perverse incentives".

Our dual health system is in strife as people abandon private insurance. Where is the evidence that Subsidies to private health funds and therefore to private medical care are subsidised to the tune of As the Grattan Institute’s Duckett has said often this week, the private health industry is in a death

the inside of a building: The exodus of young people from health funds is putting pressure on the entire private system.© Gabriele Charlotte The exodus of young people from health funds is putting pressure on the entire private system.

Rachel David, from health insurance lobby group Private Healthcare Australia, says the challenges the private system faces are real but "absolutely fixable".

"And it’s essential that we do fix them because without the people who are able to afford it paying something, our health system is not sustainable,” David says.

But like a patient being bounced between doctors, the private system is receiving a different diagnosis and prescription at every stop, and Health Minister Greg Hunt is under pressure from the industry and the public to produce answers.

Hunt came down firmly on the side of consumers last week when he rejected 20 insurers' requests for an average 3.5 per cent rise to their annual premiums, saying he was determined to keep a lid on premium rises to 3 per cent this year, even as funds say they're struggling to meet rising costs.

Customer confusion prompts calls for health star rating expansion

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The health law has been less competitive than proponents had hoped, and prices have gone up A view of the spiral staircase leading to the rooftop of the U.S. Capitol dome during restoration work in That’s part of the rationale behind the new House proposal to reshape the health care system .

It ’s a tricky business to fine-tune a market and encourage buyers and sellers to do the right thing — both providing access to That is what my top-rated plan, Qualchoice, did in Ohio in the late 1990s to stem multimillion- dollar losses from its participation in the Medicaid Advantage managed care program.

"We did it last time, they said it would be impossible to get them down," he tells TheSydney Morning Herald and The Age.

But he has also backed one of the health funds' core ideas to bring down their hospital spending, by allowing them to fund some hospital treatments in patients' homes where costs are lower. The first stage of Hunt's policy - for mental health and orthopaedics - will launch by mid-2020 to allow funds to factor the changes into their 2021 premium rises.

Labor, which positions itself as "the party of Medicare", has seized on the crisis in private health to attack the government as being "devoid of leadership" on the issue, and called for a Productivity Commission review into the sector.

But Labor's position is not wildly different to the Coalition's; the Opposition wants to keep Australia's dual public-private health care system and ensure that private health insurance is sustainable.

"It would be a fundamental change in the health system if nobody had private health insurance," Labor health spokesman Chris Bowen said this week, calling “hospital-in-home” reforms "a worthy enough suggestion".

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At a crucial moment in history, it ’s worth thinking about the evolution of progressive ideas, in the US, the UK and in Australia.

Now some experts question whether it should be saved at all. Private health insurance review finds reforms failed and industry in a ' death spiral '. Some psychologists treating military personnel say they have not been paid since Bupa took over the defence health contract in July.

Leanne Wells, chief executive of Consumers Health Forum of Australia, which advocates on behalf of patients and customers, also backs a Productivity Commission inquiry to examine how to ensure health insurance provides "value for consumers who use insurance and for the taxpayers who subsidise it”.

Private Healthcare Australia wants insurers to be able to pay for longer GP consultations for patients with mental health and chronic illnesses, and is pushing for the health insurance rebate to be restored to 30 per cent for all people under 40. The government has pledged to bring back the full means-tested rebate - which currently ranges between zero and 25 per cent - as soon as it achieves a "sustainable" budget surplus.

Hunt has already made it possible for insurers to offer discounts of up to 10 per cent to members under 25, and all funds have to move to a simplified membership model (split into categories of basic, bronze, silver and gold) to make policies easier to understand.

Bowen says increasing the government rebate is not "a sustainable solution" and describes an insurer push for a fringe benefits tax to enable employers to pay for workers' health insurance premiums as "an Americanisation of the system".

According to the Grattan Institute's Duckett, the $6 billion a year spent subsiding the private sector through the insurance rebate is only money well spent if private hospitals are being run more efficiently than public hospitals and, on his analysis, they aren't.

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Speaker Paul Ryan, R-Wisconsin, has said Obamacare is in a " death spiral " as GOP looks to WASHINGTON -- President-elect Donald Trump says that President Barack Obama’s health care THE FACTS: Experts agree that Congress could fix the law’s problems, should it choose to do so.

That leads to a death spiral , which is worse than failure. Related: Do You Recognize the 8 Early Then there's the double risk that the tech never delivers on the promise and that it doesn't meet the More important, what are you doing to speed up the rate at which you extract responses from your

In a major report into the sector released this week, the Grattan Institute identified $2 billion in annual savings in the private system which, if passed on to customers, would cut 7 to 10 per cent off insurance premiums and “save private health care”. That would come from cutting insurance payments for “low-value” or unnecessary care, such as caesareans and knee arthroscopies which are more common in private hospitals, and reducing the longer stays on average compared to public hospitals.

After the cost of premiums, large out-of-pocket expenses when patients go to hospital are the second most common reason that people cancel their health insurance. Duckett is calling for hospitals to negotiate with all medical practitioners involved in a hospital stay on the patient's behalf before handing "a single bill" to their insurer (an idea Private Healthcare Australia supports), with hospitals having to absorb any excess cost.

But Craig McNally, the managing director of Australia’s largest private hospital operator, the $15 billion ASX-listed giant Ramsay Health Care, rejects the suggestion that there is easy fat to cut. He says rising health care costs are a fact of life as the population ages and medical technology advances - improving lives but bringing considerable new expenses.

“The whole industry needs to be looking at how we can make it more efficient. But the reality is, in this country as in every other country around the world ... health care costs rise at a faster rate," he says. “If Australia wants to start to rationalise services - not provide some services that the community expects - sure, that’s a way we can save costs in the system, but I don’t think the population will find that acceptable."

Radical plan to overhaul private health insurance put forward by Grattan Institute

  Radical plan to overhaul private health insurance put forward by Grattan Institute There is a "fatal flaw" in Australia's private health system, according to a public policy think tank that has released its plan to make it sustainable, as more young people opt out of buying coverage.However, the 43-year-old single mother from Perth said the system was now letting her down.

It was the private shame of having made a big mistake and hurt people’s real love for Netflix that felt awful.” In the annals of corporate missteps, there are few parallels to such a rebound from what once looked like a death spiral , especially in the momentum-driven world of technology.

Health experts have moved to reassure British vapers in the wake of a severe respiratory illness that has killed at least five people and hospitalised many more in the This point was backed by Prof Linda Bauld, a public health expert at Edinburgh University. “ It seems highly unlikely that widely available

McNally, who runs 75 hospitals and surgery units across Australia, says the average annual increase in health insurance premiums of 3 to 4 per cent could be used as a proxy for cost growth in the private sector. That compared favourably to the public system where federal and state governments have recently agreed to a 6.5 per cent annual increase for the next five years, he says.

McNally says the Grattan's suggested model of “bundled billing” is inefficient and would add costs to the system. And while he supports the idea of “hospital-in-home” treatment, he says it should not be left in the hands of health funds, who could end up dictating what kind of treatment patients get.

Robert Cooke, a 40-year health industry veteran who was CEO of private hospital operator Healthscope for six years until 2017, agrees with insurers that there are savings to be made by reining in how much they pay for medical devices.

Funds are pushing the government to change its "prostheses list", which dictates how much funds must pay for everything from replacement hips through to surgical sponges; the funds say the prices can be double what is paid in the public system or in other countries.

Cooke recalls a Boston-based investor telling him about four years ago that Australia was like “Treasure Island” for device manufacturers because of the prices they command here. "They were … interested in how could Australia pay so much, and the margins be so much, and whether that as an investor that would continue," he says.

While government should try to stop the manufacturers' gravy train, Cooke says it wouldn't be a permanent fix to health funds’ woes. The nation's ageing population and hospital salaries are having a far greater effect, he says. “Hospitals will get you at some stage of your life. So all the other well-meaning attempt to control costs … a lot of it is about delaying the inevitable.”

Desperate to try to reach younger customers, Private Healthcare Australia invited futurologist and Millennial expert Rocky Scopelliti to address its annual conference in Sydney on Thursday.

He says that trying to sell Millennials, aged 20 to 36, a traditional health insurance product was a doomed venture because their concept of life stages had been turned upside down. "This generation's views of healthcare are very different from the ones before," he says. Longer life expectancies combined with an unpredictable job market meant that young people were not able to conceptualise their older years in the way their parents did.

Scopelliti says that if insurers want to convince young people to sign up, they must move away from trying to sell them a "generic product".

Hunt has already changed the rules to allow a discount on premiums for under-30s, but remaining restrictions stop health funds from further adjusting premiums based on age.

Savvides, the former Medibank veteran, says he is confident that the key players have enough time to put their heads together and stop the gradual drift towards anything resembling a "death spiral".

"Because the noise that comes from a continual drift to that pain point will become too deafening."

Health funds call for urgent reform after government caps price hikes .
The smallest annual increase since 2001 will come as a relief for consumers, but health funds have pleaded for reform to help them deal with their rising costs. Health minister Greg Hunt on Saturday said health insurance premiums would increase by an average of 2.92 per cent next April, after rejecting the funds' proposal for averages hikes of 3.5 per cent.The smallest annual increase since 2001 will come as a relief for consumers, whose wages are only growing at 2.2 per cent annually and have been dropping out of the private system because of affordability.

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