JOHN THOMPSON. Private health insurance seek to extend tentacles.

Jun 13, 2016

The recent report of the Inquiry into Chronic Disease Prevention and Management in Primary Health Care by the House of Representatives Standing Committee on Health has been somewhat overshadowed by the current election campaign.

One of the terms of reference of the Inquiry required the Committee to consider the role of private health insurers in chronic disease prevention and management.

In addressing this issue, the Committee makes an initial and highly questionable statement that “Private health insurers (PHIs) have an essential role in Australia’s health system”. Apparently this indispensible status of the PHIs is derived from the fact that about half of the nation’s population has a commercial relationship with a PHI. This dubious statement ignores the government ’s billions of dollars of support to the PHIs to enable them to cultivate this relationship, or the government’s inducements such as Lifetime Health Cover that penalise those members of the public who do not establish an on-going relationship with a PHI.

There is now considerable evidence that the government support of the private health insurance sector is diverting major government financial resources that could be used to provide better health services to non-productive and inefficient insurance administrative functions. Furthermore, the private health system leads to inequity of access to health services, and inhibits the control of increasing health service costs. So it is disappointing that the Committee framed its inquiry on the basis of this specious statement.

Submitters to the inquiry fell into two camps. First, the PHIs themselves (Australian Unity, Bupa, GMHBA, etc.) made energetic presentations and were supported by some organisations that had some operations conducted jointly with them. Secondly, there was a large number of organisations that were either sceptical of the benefit of PHI involvement in chronic disease prevention and management, or were opposed to any PHI involvement in this field. Significantly it was the health professions (AMA, Royal Australian College of GPs, Public Health Association, Australian Health Promotion Association, Health Consumers Association, etc.) that were most critical of any PHI involvement.

In the event, the Committee apparently found it difficult to specify an appropriate role for the PHIs. Of the 14 recommendations in the report, none related to a specific role or an expanded scope for the private health insurance industry in chronic disease prevention and management.

John Thompson is an economist with experience in primary health.

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