Media releases

September 23, 2005

Audit of Medibank Member Service Charter

At Medibank Private, our members are at the centre of everything that we do.

In January 2005, we introduced a Member Service Charter that not details our commitment to our customers, but also measures how we are performing against each of our promises.

Medibank commissioned an independent, external firm - Pitcher Partners -- who specialise in customer service to audit our charter.

Medibank has achieved 21 of the 24 (or 88 per cent) promises we made within the Member Service Charter. This is good, but we aim to do even better, with the goal of fulfilling every promise by December 2005.

Here is a summary of how we performed in the first six months we introduced the charter, from January to June 2005. You can click on each promise for a summary by Pitcher Partners on how the promise was measured.


Promise 1 - Your membership can protect you for your life time
1.1 Medibank meeting changing customer needs Yes
1.2 Medibank's commitment to ensuring quality Healthcare Yes
Promise 2 - Our Service will be courteous, professional and prompt
2.1 Calls answered within a minute Yes
2.2 Served within 5 minutes at retail centers Yes
2.3 Emails responded to within 1 working day Yes
2.4 Letters responded to within 5 working days Yes
Promise 3 - We'll let you know what's going on and we'll always be honest
3.1 Changes to policy and premiums are transparent Yes
3.2 Provision of reference numbers to customers Yes
3.3 Provide background and reasons for all decisions Yes
3.4 Membership information in comprehensive plain language Yes
Promise 4 - We're proudly Australian and we support our community
4.1 Acting responsible in the community Yes
4.2 Working with charity partners Yes
4.3 Encouraging staff to be involved in the community Yes
Promise 5 - We will resolve your concerns promptly
5.1 Aim to resolve problems on the spot Yes
5.2 Complaints handling within 10 working days Yes
5.3 Referral to the Private Health Insurance Ombudsman Yes
Promise 6 - You can trust us with your personal and private information
6.1 Information will not be passed onto any other organization for marketing purposes Yes
6.2 Member information will be kept up to date Yes
Promise 7 - Contacting us and making claims will be easy
7.1 The largest retail network of any private health insurer Yes
7.2 Member information is available on line and through a call center Yes
7.3 Reimbursable claims of less than $200 will be paid on the spot Yes
7.4 Posted Ancillary claims will be processed within 10 working days upon receipt Yes
Promise 8 - We really want to hear what you think of us
8.1 Quarterly customer satisfaction surveys Yes
8.2 Medibank contact information Yes

'Promise 1 - Your membership can protect you for your life time'


1.1 Medibank meeting changing customer needs.

Medibank believe they meet changing customer needs through the use of three mediums:

� Conducting over the phone health cover reviews throughout the year. Medibank has approximately 1.2 million members and for the 12 months ending 30 June 2005 initiated 160,000 cover reviews.

� Over the counter procedures, with employees trained to evaluate members cover through a suitability matrix.

� Through all written correspondence. Medibank includes a short paragraph at the end of each letter encouraging customers to contact them to ensure that insurance coverage is still appropriate.

Pitcher Partners reviewed the Medibank training manual and confirmed that employees are trained in performing cover reviews.

1.2 Medibank's commitment to ensuring quality Healthcare

Medibank ensures all health care providers are appropriately qualified and members of professional organizations. Health care providers that are not covered by professional organizations or qualification requirements (for example alternative medicine), must comply with Medibank's own standards.

Pitcher Partners reviewed recent correspondence.

'Promise 2 - Our Service will be courteous, professional and prompt'


2.1 Calls answered within a minute

This information is obtained from the Genesis telephone system and is based on the average time to answer calls. Based upon the average throughout the six months reviewed, Medibank did not meet this requirement in two of the six months.

2.2 Served within 5 minutes at retail centers

2.3 Reporting against this promise is limited in scope as only 30% of retail centers have the systems in place to report this information.

2.3 Emails responded to within 1 working day

This information is obtained from operator work lists. When emails are received, they are maintained in spreadsheets and databases and designated to an operator's work list. When the operators have completed the response the work list is updated. A review of the emails at the end of each period will verify which email is the oldest and therefore what the turnaround is.

The average email response time was 1.6 days.

Medibank did not meet its aim of the one-day email response time for two of the six months.

2.4 Letters responded to within 5 working days

This information is obtained from operator work lists. When letters are received, they are maintained in spreadsheets and databases and designated to an operator's work list. When the operators have completed the response the work list is updated. A review of the letters at the end of each period will verify which is the oldest and therefore what the turnaround is.

Medibank met its promise of responding to letters within 5 working days for the full six months. The average for the six month period was 2.7 days.

'Promise 3 - We'll let you know what's going on and we'll always be honest'


3.1 Changes to policy and premiums are transparent

We reviewed information regarding changes in policies and premiums. The information reviewed shows documents were transparent and appropriately disclosed. We reviewed correspondence for the following changes:

- Rate Change Notification in April 2005
- Changes to Government Rebate
- Lifetime Health Cover news letter

Information reviewed clearly states the change in premium costs and the effect of new legislation of existing members.

3.2 Provision of reference numbers to customers

Reference numbers are required to be given to all customers on each contact and are generated by the IT systems. We reviewed Medibank's trainer manual and noted new employees are trained to issue reference numbers to all customers.

3.3 Provide background and reasons for all decisions

Due to the qualitative nature of this statement we are unable to provide assurance as to whether this has been met.

3.4 Membership information in comprehensive plain language

A review of Medibank brochures demonstrates information is comprehensive and presented using plain language.

' Promise 4 - We're proudly Australian and we support our community


4.1 Acting responsible in the community

Based upon a review of Medibank's employee newsletter and additional information supplied, Medibank is acting responsibly in the community. The newsletter references to an initiative "Medibank Community", which involves supporting and encouraging staff to make a positive impact on their local communities.

4.2 Working with charity partners

As stated above, the Medibank community initiative is fulfilling this promise. Additional information provided indicates that Medibank has charity partners in:

- Juvenile Diabetes Research Foundation (JDRF);
- Salvation Army Christmas Appeal; and
- Whitelion

4.3 Encouraging staff to be involved in the community

Within Medibank's Human Resource Policy and Procedures, community leave is addressed and outlined with direct reference to the Medibank community program. This program allows each full time and part time employee to have � day of community leave per year, with another � day possible through a donation from a work colleague.


'Promise 5 - We will resolve your concerns promptly'


5.1 Aim to resolve problems on the spot

Medibank monitors this promise based upon quarterly customer surveys and through a first contact resolution initiative. These surveys are conducted of customers that have contacted Medibank in the previous quarter. One of the questions in the survey directly deals with whether Medibank has resolved problems and questions on the spot.

Based upon the results of the survey for the March 2005 quarter, Medibank is achieving its aim with 82% of respondents having their questions resolved on first contact.

Results for the June 2005 quarter were unavailable at the time of our field work.

5.2 Complaints handling within 10 working days

Medibank maintains customer complaint information in a customer relations management system. Complaints are recorded at the time of initial member contact and closed based on satisfactory resolution of the dispute.

A review of the complaint resolution data found that 96% of enquiries and concerns were closed in under 10 workings days, 83% of higher level complaints were closed within 10 working days. These statistics deal with complaint resolution as opposed to the Charter that indicates members will be contacted (as opposed to resolved) in regards to their concerns within 10 days. As Medibank is resolving the majority of complaints and concerns within 10 days this promise is being met.

5.3 Referral to the Private Health Insurance Ombudsman

This is a statement and no assurance of this is considered necessary.

'Promise 6 - You can trust us with your personal and private information'


6.1 Information will not be passed onto any other organization for marketing purposes

Medibank's privacy policy reinforces this statement. Management indicated that they do not forward any member information onto organizations for marketing purposes.

Medibank ensure that the privacy statement is introduced to all new staff. On an annual basis, all staff are required to complete an on line privacy training course (Safetrac). For the year ended 31 December 2004, Medibank achieved 99% compliance by the deadline.

6.2 Member information will be kept up to date

Member information is kept up to date through processes around membership renewals and client contact. Medibank staff are encouraged to update member information whenever contact with members is made.

In order to determine the success of this promise, we reviewed the number or premium advises returned as part of the annual membership renewal process in March 2005. From the information supplied, at total of 8,262 (or 0.6%) of the 1.4 million memberships were returned due to incorrect or outdated personal contact information.

'Promise 7 - Contacting us and making claims will be easy'


7.1 The largest retail network of any private health insurer

Based on a review of information from the Private Health Insurance Administration Council at March 2005, Medibank is the largest private health insurer in Australia, with 29% of market share. In order to verify that they had the largest retail network in Australia, we reviewed Medibank's two largest competitors and confirmed that Medibank had 17 more outlets than its closest competitor.

7.2 Member information is available on line and through a call center

This is a statement of fact and was confirmed through visiting Medibank's Internet site and confirming the hours of call center operation.

7.3 Reimbursable claims of less than $200 will be paid on the spot

Staff are instructed of this requirement through the National Retail Center Operations Manual (NRCOM). This manual is provided to all retail staff and it is an expectation that staff read and understand this manual as part of their customer service role. The manual specifically deals with $200 claims and states retail staff can pay cash benefits of up to $200 per claim. The manual also states for payments over $200, retail centers are allowed to pay benefits through either reverse EFTPOS system cheque or manual cheque.


7.4 Posted ancillary claims will be processed within 10 working days upon receipt

A review of posted ancillary claim information identified Medibank is not meeting the charters promise of 10 days.


'Promise 8 - We really want to hear what you think of us'


8.1 Quarterly customer satisfaction surveys

As discussed previously, Medibank performs quarterly customer surveys. These surveys are conducted for 30 members within each retail center's geographical precint.

8.2 Medibank contact information

This is a statement of fact and confirmed.


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