Media releases

June 16, 2003

Cost of health 'Surprises' members

About seven in 10 Medibank Private members are surprised at the potential cost of common private hospital procedures, according to a recent survey conducted by the fund.

In the survey, Medibank Private members were asked to estimate the potential amount that Medibank Private may pay for common private hospital treatments, including hip replacements, strokes, knee procedures and childbirth.

Procedure and Potential Cost Range

  • Gall Bladder removal $4,000 - $18,000
  • Appendix removal $3,000 - $9,000
  • Eye lens replacement $2,000 - $9,000
  • Stroke $7,000 - $24,000
  • Hip Replacement $19,000 - $32,000
  • Coronary Bypass $17,000 - $32,000
  • Childbirth $5,000 - $19,000
  • Knee procedures $3,000 - $14,000
Of the members polled, up to 25 percent were unable to guess at what certain procedures might cost. And nearly 70 percent were surprised upon learning the potential cost of many procedures.Medibank Private Managing Director George Savvides said the research reinforced the need for health funds to better educate members on the benefits of their private health cover.

"Private health cover is a different proposition to other types of insurance. If you compare it to car insurance, you will find that people often have a reasonable knowledge about the prices of cars - but the true cost of health is often unclear to consumers," Mr Savvides said.

"Costs for hospital procedures can vary considerably, and members were very surprised at how much Medibank Private will pay on their behalf for hospital procedures.

"And in the case of our larger benefit payouts, this figure can run into hundreds of thousands of dollars."

In the 2001/2002 financial year, Medibank Private paid hospital benefits for over 400,000 members, totalling over $1.4 billion.

Mr Savvides said that improved member education about the value of private health insurance was important in helping funds to retain members who joined during Lifetime Health Cover.

"This research showed there are tens of thousands of Medibank Private members who would be more inclined to retain their health cover after getting a better understanding of the cost of health," Mr Savvides said.

"We will be looking to incorporate this information into future member communications."

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