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Mark Fitzgibbon


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Mark Fitzgibbon

  1. 1. 1 Health Insurance Summit 22-23 July 2013 Sydney Harbour Marriott Hotel
  2. 2. 2 Overview • We’re spending more and more on our healthcare. • Government cannot sustain its relative funding of our healthcare – it’s an enormous opportunity. • We need a clear long term vision about how we in PHI would like the healthcare system to look. • Nearer term reform has to cognisant of and influenced by the long term vision and context. • Reform won’t happen on its own and requires compromise.
  3. 3. 3 Where’s it all end? • Expenditure on health in Australia was estimated to be $130.3 billion in 2010-11, up from $77.5 billion in 2000-01. • This expenditure was 9.3% of gross domestic product in 2010-11 up from 8.2% in 2000-01. The estimated recurrent expenditure on health was $5,796 per person. • 69.1% was funded by governments, up from 67.7% in 2000-01. The two largest components of the increase in health expenditure were public hospital services, which grew by $2.2 billion in real terms, followed by medications ($2.1 billion). Source: Health expenditure Australia 2010-11 Australian Institute of Health and Welfare
  4. 4. 4 Commonwealth outlays – it’s just not sustainable….
  5. 5. 5 10 point long term vision for PHI 1. 100% of Australians enjoy the protection of PHI i.e. its compulsory. Multiple licensed PHI insurers compete via price and service for enrolees. 2. Minimum comprehensive hospital and dental benefits are prescribed by regulation. Insurers cover the full spectrum of healthcare. 3. Premiums are risk rated but kept affordable through a combination of active health risk and utilisation management, hospital and provider cost control/quality assurance, a focus on clinical outcomes, risk equalisation and the broad positive risk selection made possible by compulsion. 4. Government subsidies for premium follow the enrolee and are based upon income, inherent medical risk factors (including age) and other disability factors (including geographical). 5. Risk is equalised across insurers through a system of prospective cost reimbursement providing insurers with commercial incentives to invest in risk management. 6. Insurers set premiums independent of Government control with competition delivering the necessary pressure on premiums. Government (PHIAC) continues to regulate prudential and professional standards. 7. Doctor, hospitals and other clinical providers are remunerated on the basis of negotiated prices and outcomes. There are no regulated minimum prices. Insurers contract with both private and public providers. 8. Price signals (i.e. out of pocket gaps) create price signals to help manage demand and facilitate provider price competition. The extent of the gap increases with the level of discretion implicit in the treatment. So for example, nil gap for an emergency procedure and maybe 20% for non-emergency caesarean section. 9. Medical savings accounts assist enrolees in meeting the cost of gaps. Savings income within the account isn’t taxed as an incentive to save. Medical savings accounts especially help in later years of life as utilisation becomes more intense. 10. Consumers enjoy a high degree of choice and empowerment via various mechanisms and technologies which make transparent provider prices, accessibility and quality. Electronic personal health records aid and abet the coordination, continuity, efficacy and safety of care.
  6. 6. 6 Short term (doable) goals • Expanded cover for GP services associated with risk and utilisation management. • Denticare means 100% of population has some PHI. • Premium setting independence – capping of the rebate. • Prospective risk equalisation. • No provider price fixing. • Risk rating behaviour and reducing moral hazard. • Personalised electronic health record. • Medical savings accounts.
  7. 7. 7 Thank you