Media releases

May 26, 2008

Hospital and medical fees continue to rise

Health costs continue to increase and look set to top last year's 8% per year increase driven by rising specialist, hospital and prostheses costs and increasing utilisation, according to Medibank Private's second Health Benefits Report issued today.

The Health Benefits Report, which looks at the 12 months to December 2007 in comparison to the 12 months until June 2007, shows continuing steep rises in the cost of hospital, medical and prostheses benefits.

"The Report shows increases of up to 7.3% for medical services in first half year (financial year 2007-08), indicating we could be in line for a yearly hit of over 14%," said Medibank Private Managing Director George Savvides.

"Our overall outlay on benefits for our members, not including ancillaries, has risen by $85m."

The Report details the most common hospital admissions funded by Medibank Private over the 2007 calendar year, and includes average cost figures on procedures and prostheses.

"In terms of specific procedures, a number of admissions for prostheses are increasing rapidly. The growth in cardiac defibrillators, which cost an average of $50,500, has risen by an average of 16% across the country, and some states the figures have increased by as much as 20%," Mr Savvides said.

Unchanged from the 2006-07 Report, the most common overnight procedure was childbirth (18,374 admissions at an average cost of $6,325) while the most common same-day procedures were colonoscopies (increased by 6% to 89,982 admissions) and chemotherapy (increased by 4.5%to 50,937 admissions).

"The report shows that some of the most common procedures, procedures required by a large number of Australians, cost a lot of money," he said.

Medibank Private Chief Operating Officer Mr Bruce Levy, said that the figures illustrate just how many people require the specified medical services and how expensive health care can be.

"Last year Medibank Private paid a record $2.65 billion in benefits for our members. The figure looks set to be much higher this year, with the Health Benefits Report revealing increased costs (excluding ancillaries) of $85 million in the first half year.

"That represents over 775,366 Australians not waiting for surgery on public waiting lists," Mr Levy said.

Prostheses continue to be an extremely expensive part of surgery, with orthopaedic surgery such as hip and knee replacements incurring the largest costs.

"Knee replacements have overtaken hip replacements as the most common prosthesis procedure. The number of knee replacements performed has increased by 8%, and we have paid nearly $37.5 million for our members to have this procedure."

"In 2007 we had 86 claims over $100,000. Those people did not expect to need that medical attention. It's important to prepare for the unexpected. The alternative to having Private Health Insurance has to pay a lump sum in one hit for elective surgery, or go onto a waiting list', Mr Levy said.

Further information: Sarah Chibnall on 03 8622 5181 or 0423 762 676

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