Gap In The Insurance Report Needs Treatment
The Age
Thursday April 10, 1997
People dump their health insurance for one fairly fundamental reason: the-often whopping gap between what their (rising) premiums cover and what their doctors and hospitals charge them.
The trouble with the 524-page Productivity Commission report into private health insurance is that it contains absolutely nothing to tackle that problem.
The Government has waved tax rebates as carrots and wielded sticks in the form of the Medicare levy surcharge and now higher premiums for those who join funds in their middle and twilight years.
It has proposed loyalty bonuses for long-term fund membership and a single bill at the end of treatment. It has threatened those who only take out health cover to have babies or knee reconstructions or cosmetic surgery with much longer pre-operational waiting times.
But despite what the health funds may say, paying twice for treatment is one of the biggest disincentives to anybody entering and staying in the private health care system. And at this stage, there is nothing much the Government can do about it.
The measures the Health Minister, Dr Michael Wooldridge, has endorsed are aimed at the industry, rather than the health-care consumer. They are designed to keep health funds afloat, preferably on the backs of those who pay much and cost little, in the hope they will create competition that might eventually bring premiums down.
They are designed to help the industry retain the best risks among those fleeing the system and to weed out - and even discourage - the worst ones. There are no prizes for guessing the best risks are young and healthy and cheap to look after and the worst are the elderly with failing eyesight and fragile bones who need health cover the most.
But the gap is not something which can be legislated out of existence. Gap insurance in its most uncomplicated form would leave doctors free to charge whatever they liked and health funds to bear soaring costs.
The only apparent solution is a form of contract between doctors, hospitals and health funds to guarantee that what you pay your insurer once a year is all you have to pay. The Australian Medical Association has steadfastly resisted, arguing with some validity that this could leave health funds to dictate the quality of care on the basis of cost (and, just quietly, to put a lid on members' salaries).
All previous government attempts to cajole the medical profession into signing contracts have failed monumentally.
Health officials now insist there are clandestine moves afoot to overcome that problem. But until they are universal and formal, not even a report two inches thick will fill the gap.
© 1997 The Age