WA News Letters Insurance and Cost Spirals
Insurance and Cost Spirals
Written by Dr Linda Swan
Monday, 27 February 2017

Dear Editor,

I was interested to read the views of WA doctors on health trends (February). I’m often asked what I see as the biggest health challenge facing Australians. To be really succinct – it’s that we are going to run out of money.

I believe we have one of the best health systems in the world but we also have an ageing population, a growing prevalence of chronic disease, and the ever-increasing costs of new technologies.

Clinicians are at the heart of our healthcare system and they are dealing with all of these challenges on a daily basis. The health systems, both public and private, face significant technological change. In thinking about how best we offer care in 2017 and beyond, the patient’s outcomes must come first and this means we may need to move away from fee-for-service billing to a more outcomes and volume-based system.

Governments and private payers can't afford to continue to pay for health care in the way we have for the past 50 years. Health-care costs are increasing because Australians are going to hospital more often.

Every time we’re admitted, we are receiving more treatments and services than in the past, and the cost of treatments and services are also rising.

I can offer figures from a Medibank Private perspective – since 2011, the number of hospital admissions per member has increased 19% and the average amount the insurer pays in benefits per admission has increased 10%. This has seen average hospital benefits paid per member increase by 31%.

Tackling these big and complex issues to ensure the sustainability of Australia’s health care system requires innovative and creative solutions. It also requires us to focus – not just on reducing waste and lowering costs – but on our ultimate goal of improving the health of individuals.

Dr Linda Swan, Chief Medical Officer, Medibank Private