'Junk' insurance policies limit patient access

Despite an uptick in episodes of care in private hospitals in the latest data released, they are still below anticipated numbers considering high levels of private health insurance membership.

This could be because Australians are not able to access the care they need because of low-value insurance policies, Australian Private Hospitals Association (APHA) CEO Michael Roff said.

The latest Australian Prudential Regulation Authority data showed there were just over a million episodes of care in private hospitals in the September-December 2023 quarter – but with 12,092,921 Australians now holding private health insurance, Mr Roff said this number should be higher.

"While it's good to see episodes of care increasing, meaning private hospitals are getting back to more normal levels of activity, we would have anticipated a higher number considering the number of Australians with private health insurance membership has increased by 859,798 people since the beginning of the COVID-19 pandemic," he said.

"In tandem there has been an increase in private health insurance policies with exclusions, more than two-thirds (64.3 percent) have them, which means Australians may not be covered for a health service they find they need.

"We are notoriously bad at understanding our healthcare needs even six months in advance, and people often find their health insurance does not pay for services they thought they were covered for.

"Despite the fact these junk policies provide little cover to Australians, insurers continue to provide them."

Mr Roff said a number of other factors were impacting the private hospital sector.

"The economic environment means private hospitals are under significant financial pressure and, unless the boom in health insurance profitability flows into appropriate funding for private hospital services, the sector will continue to struggle.

"Just this week Private Healthcare Australia CEO Dr Rachel David issued a press release in which she pointed to premiums having to increase 'to ensure our health providers are appropriately remunerated for increases in recruitment, power and food because like the rest of the economy, they have been impacted by inflation'," Mr Roff said.

"This is true, yet there is little evidence of private health insurance companies increasing their payments to private hospitals.

"We have already seen private hospital beds, services, and indeed entire hospitals close and the current funding arrangements need to change if we want this to stop." 

Hear from private health insurers and be part of the discussion of the future of private hospitals at the APHA 41st National Congress see the program for more details.

Read more: Private hospital activity yet to fully recover

Read more: Health insurers 'restrict patient care options'

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