An ageing population, the increasing prevalence of chronic and complex conditions, and new and more expensive medical technologies are driving up the costs of healthcare in Australia.
The Federal Minister for Health recently stated that health costs are increasing at around 8 per cent every year.
Dr Linda Swan, Medibank’s Chief Medical Officer, says work needs to be done to address the increasing costs of healthcare in Australia.
“The great news is that Australian’s enjoy some of the best healthcare in the world," says Dr Swan. "However, it faces a number of significant challenges, and so it’s vital that key reforms are made to ensure the long-term sustainability of our private healthcare system and Australia’s health system overall.”
Private healthcare plays a key role in Australia’s health system, relieving pressure on the public health system. More than 13 million Australians hold some level of private health insurance.
Rising costs of healthcare
Recent Medibank data shows that Australians are being admitted to hospital more often, and receiving more hospital treatments per admission than ever before.
According to the data, in 2014-15:
- There were more than 1.2 million claims by Medibank members for hospital admissions and procedures.
- Medibank paid more than $3.47 billion in benefits for these claims – an increase of 3.4% on the previous financial year.
- The amount paid by Medibank for prostheses, such as pacemakers and joint replacements, jumped by more than $25 million – to over $480 million – on the previous year. Prostheses make up 14% of the costs paid by private insurers to hospitals.
- In 2014-15, Medibank Private Limited paid a total of $5.1 billion on behalf of Medibank and ahm members.
Driving innovation and advocating for greater transparency and efficiency
Medibank is working with the Federal Government and with hospitals, doctors and other partners across the private health system to reduce waste and inefficiencies in the system, and to improve the affordability of private healthcare.
“We all need to work together to address the increasing costs of healthcare if we are to going to maintain our current high standards,” says Dr Swan.
Medibank recently provided seven key recommendations to the Federal Government’s review into private health insurance to deliver better patient care, and improve transparency, affordability and value for Australians.
The recommendations include providing Australians with clearer and more accessible information regarding costs and quality of private healthcare; standardisation of products and terminology; and reducing costs of prosthesis which are currently highly inflated for private patients.
"These reforms would not only help Australians to better understand the costs of private healthcare and allow them to make more informed choices, but could also drive improvement in the delivery of private healthcare services,” says Dr Swan. “It will also provide significant savings which will in turn improve the affordability of private healthcare.”
“We are absolutely committed to improving health outcomes for patients and their experience of healthcare, as well as improving the affordability and long-term sustainability of Australia’s world health system,” says Dr Linda Swan.