Private health insurance overhaul, privacy concerns over personal genomic testing and e-health for older Australians

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Why are out‑of‑pocket costs driving people away from private health insurance in Australia?

Dr. Norman Swan 0:00

Hello and welcome to the Health Report with me, Norman Swan. Today, personal genomics, getting your genes analyzed by one of the 50 or so companies offering cheap genetic tests, from disease susceptibility to finding your ancestors. All sorts of issues are arising. How tiny blood vessels may cause depression, making your home health smart, and it's more than not tripping over the rug, and the affordability. Of private health insurance and the sometimes extraordinary out-of-pocket costs involved in seeing specialists and receiving treatment. In fact, Australians have some of the highest non-reimbursed out-of-pocket costs in the world. And some suggest it's putting people off private health insurance, and indeed, if they are privately insured, being treated into the private sector, going to the public hospitals.

Dr. Norman Swan 0:46

Stephen Duckett runs the health group at the Gretchen Institute and has made a submission. with his colleagues to the Senate Community Affairs References Committee on both these issues. Welcome to the Health Report, Stephen. Thanks, Norman. So w this what what are the what's this community affairs references committee looking at?

Stephen Duckett 1:02

Uh they're looking at a ragbag of uh of topics, uh both the structure of the health system generally and and chronic illness and so on, but also looking at specifically at out of pockets and also value for money in private health insurance. Just what what are the statistics with out of pocket costs? Well, uh as you said in the intro, Australia has one of the highest proportion of out of pockets in comparable countries. I think Switzerland has a slightly higher proportion. But w we have uh I think it's twelve percent. I think of gross t m of our health spending is on consumer out of pockets, uh which is a very high proportion. What's that money going on? Well, uh some of it goes on dental care, uh very very high proportion of out of pockets for dental, uh that's uh not covered by Medicare obviously, but also a significant proportion on out of pockets for specialist medical care, out of pockets for private uh hospital care.

Dr. Norman Swan 1:58

Now you say y that uh in a recent piece that you we pay too much for medical specialists, surgical specialists in Australia. Why?

Stephen Duckett 2:05

Well I think there are a range of reasons why why we're paying too much, but paying especially paying too much uh out of pocket. One of them is just supply and demand. In particular parts of Australia, uh we there are fewer specialists and so they're able to charge more. Uh ACT is an example, rural and regional Australia generally is an example of that. How do you define being paid too much? I mean nobody ever complained about being to pay too much. Well it's uh the way I phrased it was about out of pocket costs and th so we're paying way above the uh the Medicare rebate. Uh you th you might argue in some circumstances the Medicare rebate is too low. You could also argue in other circumstances, such as cataract operations, the Medicare rebate is too high.

Stephen Duckett 2:47

But I think uh the the fact is that consumers are paying these significant amounts and more importantly, Norman, uh Uh in the case of s medical specialists, for example, eight percent of uh Australians reported that they deferred seeing a medical specialist because of cost.

Dr. Norman Swan 3:04

So they're not getting the care they may they may need. I mean I mean my understanding is that um private hospital utilization in Australia is down by a very six significant percentage this year and they're they're blaming some of them are blaming out of pocket costs.

Stephen Duckett 3:19

Well, uh private health insurance uh has been by and large large stable in terms of the total number of people with health insurance. But what's been happening is the composition of health insurance has changed. So now almost everybody who has health insurance has some sort of deductible, that is, they have to pay the first five hundred or a thousand or two thousand dollars. And a significantly an increasing proportion. have some sort of exclusion. That is, they might not be covered for orthopaedic services, for example.