Thinking differently will improve our healthcare system
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More than 13.5 million Australians participate in private health insurance. Our customers appreciate the choice the private system provides and more broadly our role in taking pressure off the public system.
But we know affordability is still a big issue for our customers. Over the past decade the cost of healthcare in Australia has risen by 4.5% p.a. above inflation. Dealing with this in a meaningful and sustainable way requires reform to the system.
Both major political parties recognise that more must be done. Our role is to advocate for this on behalf of our customers.
More needs to be done on transparency, especially around out-of-pocket costs. The number of customers who say these are a key reason for dropping their private health insurance has more than tripled over the past five years.
While we await the recommendations from the Government committee, a good start would be for treatment costs and quality data to be readily, and universally, available to customers. By having greater visibility of this essential information, customers can make more informed decisions about their care.
Secondly, there is the challenge of Australia’s changing demography. The number of Australians aged 65 and over is set to double within the next 40 years. The ageing population means greater demand on our health system and simultaneously fewer taxpayers to help fund it. We need new solutions, such as further developing alternative care options like in-home treatment or telehealth options.
Additionally, one in every two Australians has a chronic disease. This accounts for approximately $50 billion or 36% of the total health budget. Unless more is done to prevent and manage chronic disease, these costs will swamp the public and private health systems.
Finally, we need to be smarter about healthcare spending. The Productivity Commission estimates that 10% of healthcare spending either has no effect, causes harm or is not worth its cost. So if we are seriously considering changes then surely, tackling low value care must be on the table.
All of us want a system that is more affordable, easier to use, and creates greater customer value. We are working hard within our business to achieve this, but it cannot be solved by private health insurers alone.