Media releases

November 21, 2008

Boom in hospital day admissions driving costs

Benefits paid for hospital admissions rose by almost 8 per cent in 2007-08 driven by increased utilisation of hospital services, according to the latest Medibank Private Health Benefits report detailing the most common hospital admissions funded by the insurer.

Nationally, hospital utilisation grew by 6.7 per cent, with Medibank Private members claiming an additional 51,052 hospital admissions over the previous financial year. The figures also show that it is day procedures that are the principal driver of the increased utilisation, accounting for three quarters of the extra hospital admissions.

"Healthcare is an expensive business, and this report gives a snapshot of how much money is being spent, and on what," said Medibank Private Deputy Managing Director Bruce Levy.

"In 2007-08 Medibank Private spent a record $2.13 billion on member claims for hospital services, with overall costs growing at a rate well in excess of inflation. It is an ongoing battle to keep this cost growth contained, and the report shows that we have been fairly successful in terms of managing growth in unit costs, which have remained fairly flat from last year.

"However growth in utilisation continues to be a challenge, and the burden of chronic disease continues to grow. Almost half of Medibank's total benefit outlay is spent on claims by just 2 per cent of our members, and these high claimers tend to be people with underlying chronic disease, which adds significant costs to the system.

"One solution is to increase investment in preventative health and disease management to try to reduce the need for hospital-based acute care, and it is this direction that Medibank Private is moving in," he said.

Nationally, and in all states and territories, childbirth remained the most common reason for Medibank Private members to stay in hospital overnight, with the fund recording 18,577 birth related admissions during the period.

The report also shows the average cost for high-end cardiac prosthesis such as implantable defibrillators and pacemaker's has dropped, but this saving has been offset by large increases in demand for the devices.

"The average cost of implanting a cardiac defibrillator has dropped by $3,785 to be just under $50,000 per unit, which is welcome, but the number of defibrillators being implanted has increased by 30 per cent. The net effect being an increase in benefits to $23.5 million just for this one item," Mr Levy said.

"In many ways this device encapsulates the key dilemma facing Australian healthcare - how to contain costs driven by the twin effects of expensive medical technologies and the increasing demand for them as our population ages," he said.


For further information please contact:

James Connors
Tel: 03 8622 5163 | Mob: 0433 992 677 | email:

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