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Private health insurance and the illusion of choice

The number of people with health insurance plummeted in the 1990s, but almost half the Australian population now has private hospital insurance and over half have ancillary or extras cover. But our research…

There’s a gap between what people with private health insurance think they’re paying for and what they’re getting. mvcaf/Flickr

The number of people with health insurance plummeted in the 1990s, but almost half the Australian population now has private hospital insurance and over half have ancillary or extras cover. But our research on private health insurance websites and interviews with consumers shows that messages about increased choice don’t always match reality.

Both Liberal and Labor governments have been encouraging us to purchase private health insurance since 1997. They’ve claimed that private health insurance promotes choice for the consumer and takes pressure off the public health system.

Private health insurers urge us to choose their products so we can take responsibility for our health and have more choice in our health-care experience – including timing, hospital and specialists. And government tax penalties, higher rebates for people over the age of 30 and subsidies encourage us to finance our health-care needs through private health insurance.

But our research found that private health insurance may not increase choice in health care. In birthing and maternity care, in particular, people purchase insurance because they want choice of doctor and place of birth. But in regional locations, choice is limited. Despite participants in our research mentioning choice as the reason why they had private health insurance, all babies in our regional research site were delivered at the local public hospital.

What people were actually buying with their health insurance was what one participant called “the luxuries” and commentators have called “hotel services” – the capacity to move to a private hospital after the birth with privacy, nicer facilities and better food, as well as the perception of better care.

About a quarter of people with private health insurance use the public health system rather than the private system. This may be because the care they need is only available in the public system, or the cost.

Extras surprise

Many people are surprised at how much extra they have to pay when they use their private health insurance in hospital. By contrast, there are few, if any, additional costs in the public system. And many people don’t really know what they’re getting when they purchase private health insurance.

Our research into why people take out private health insurance found that people had limited awareness of what was covered in their policies and very few had increased choice if they did use it. Most often, we found that people have little knowledge about what’s covered by their private health insurance. As one participant said, “I pay more attention to the details of my car insurance.”

This may, in part, be because these details are confusing. While writing this piece, we did a search on the website iSelect, which is designed to assist consumers choose their health insurance, for the cost and value of private health insurance for an older couple without children. Even with these limited parameters, the search revealed a price range between $136 and $393 a month with significant variation in what was covered for both hospital and ancillary care.

Further confusion arises when one tries to compare the types of therapies that may be covered. Dental care provides an excellent example of major differences between insurers. Again, using the iSelect search, we found that the monthly ancillary premium ranged from $51 and $133 per month, the annual claim limit ranged from $500 to $1200 per person, with no clear link between the cost of the premium and the available benefits.

This also holds in the fast-growing area of complementary and alternative therapies. Our iSelect search revealed a huge variation in type of alternative therapies (such as acupuncture, naturopathy, traditional Chinese medicine) covered by the various private health insurers and the amount that could be claimed ranged from $100 to $700 per person per year.

Irrational choices

While one response to all of this may be that people should ensure they’re well informed and make rational choices based on their perceived needs, our research found that the notion of choice itself is problematic. Family history was more predictive of choice of insurer than cost-benefit analyses. People were unlikely to change insurers even when concerned about the cost.

Indeed, people appear to be much more cost and value conscious when shopping for consumer products other than health insurance.

One reason for this may be that despite the rhetoric of consumer choice, Australia has a world-class public health-care system. While sometimes falling short and often getting negative publicity, the principle of a health-care system based on equity and access accords well with Australian values.

Unlike health systems where individuals must take all responsibility for their health-care costs, Australia’s public health system provides a safety net that ensures we are not wholly dependent on health insurance.

But for those who do choose to pay for private health insurance, the capacity to choose their care remains unequally distributed.

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74 Comments sorted by

  1. Rachael Dunlop

    Post-doctoral fellow at University of Technology, Sydney

    I think the other point is the option of opting out of "choices". For example, I once enquired about cover with no complementary therapies and found only one fund that even had that option, but it was more expensive to opt out than to have the cover. Not much choice there. I want to choose to have no CAM but my choices are extremely limited in this regard.

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    1. jamie jardine

      Acupuncturist

      In reply to Rachael Dunlop

      That's because you're in the minority, CAM use continues to grow annually so why shouldn't they insurers include it in their cover? In fact research shows that CAM users generally are well educated, high income earning women between 30 - 50 yo. So come on Dr. Rachie, get with the program lol!

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    2. William Bennett

      Lecturer in Environmental Chemistry at Griffith University

      In reply to Rachael Dunlop

      This is a great point, Rachael!

      CAM should not be covered at all under private health. If people want to throw money away by using treatments that have no convincing evidence of efficacy, then I support their right to do so, but not via the Extras system.

      Why should my premiums be higher because some people want to waste their money on CAM?!

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    3. Rachael Dunlop

      Post-doctoral fellow at University of Technology, Sydney

      In reply to William Bennett

      Hi William, the Aust government announced last year that they are looking at cutting their 30% subsidy to private health funds for CAM. (This was in the context of a surplus so I dunno the status of this now given the surplus appears in jeopardy).

      "Chief Medical Officer, Professor Chris Baggoley, with identifying a range of therapies that have not been shown to be clinically effective. NATURAL therapies such as aromatherapy, reiki and homeopathy will be targeted.

      Many are covered by private…

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    4. Sue Ieraci

      Public hospital clinician

      In reply to jamie jardine

      "CAM use continues to grow annually so why shouldn't they insurers include it in their cover? "

      Perhaps because most "alternatives" (except perhaps chiropractic for back pain) don't improve health outcomes.

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    5. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Rachael Dunlop

      "cutting their 30% subsidy to private health funds for CAM. (This was in the context of a surplus so I dunno the status of this now given the surplus appears in jeopardy)."

      Shouldn't cutting a subsidy help the government to achieve a surplus?

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    6. Kim Darcy

      Analyst

      In reply to William Bennett

      There is no reason why your premium must necessarily be higher. In fact, a generous CAM offering might attract a very large number of quite healthy people, who just want to avoid the Medicare surcharge. In this case, your premium would actually be reduced.

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    7. Felix MacNeill

      Environmental Manager

      In reply to jamie jardine

      Jamie - you are being exceedingly arch - just because CAM has become popular doesn't mean that it should become virtually compulsory!

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    8. Felix MacNeill

      Environmental Manager

      In reply to Rachael Dunlop

      Rachael, I'm going to make a big public confession here - I learned Reiki many years ago and I must say that any claim that it is an effective physical therapy is completely absurd.

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    9. Tim Scanlon

      Debunker

      In reply to Rachael Dunlop

      I agree Rachael. I don't want to pay premiums toward CAM, since I'm not going to use them

      It is even worse that they are included at all, with that pesky fact they don't actually work.

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    10. Karen Witcombe

      logged in via Facebook

      In reply to Rachael Dunlop

      Rachel, perhaps you have never had an injury that required rehabilitation to suggest that physio should be excluded and when you get older you may find podiatry an essential element of your health care too.

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    11. Rachael Dunlop

      Post-doctoral fellow at University of Technology, Sydney

      In reply to Karen Witcombe

      Sorry, I think you may have misunderstood my comment (or rather I didn't explain myself very well). I meant they shouldn't be in the list of "mainstrean natural therapies" which includes acupuncture etc because they are evidenced based modalities. I didn't think there was any question as to their effectiveness which is why I was questioning their inclusion at all. It seems to confusing to clasify physio and podiatry as "mainstrean natural therapies" but maybe that's just me.

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    12. Rachael Dunlop

      Post-doctoral fellow at University of Technology, Sydney

      In reply to Kim Darcy

      Hi Kim, there is one fund that had no CAM at all and that's a Drs Health fund (funny that). All others have some form of CAM extras and last time I asked, I either couldn't get them excluded or one fund would but it would cost me extra to do so.

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    13. Peter Ormonde

      Farmer

      In reply to Rachael Dunlop

      I wonder what actuarial analysis sees quackery so gleefully embraced by the insurer.

      One would like to imagine the the cold calculating eye of an insurer would be looking for the proven efficacy of the services they pay out for.

      But no. I can get my broken heart cured by Reiki long distance, or homeopathy, or drinking infusions of weeds, bark and animal bits. But if I want to get it fixed in a hospital they go in through the wallet.

      I suspect the statistical profiles of folks that use CAM look quite different to the rest of us.

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    14. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Rachael Dunlop

      "Sure it should, but hasn't the government abandoned the surplus?"

      So you're saying that if the government has abandoned the surplus, then it should give up trying to avoid wasting money on things like subsidising CAM?

      Interesting.

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    15. Rachael Dunlop

      Post-doctoral fellow at University of Technology, Sydney

      In reply to Chris O'Neill

      Absolutely not. I'm saying I don't know if these cuts are still going ahead given the government was looking to cut 30 million as a mechanism for delivering a surplus. If the surplus doesn't happen, maybe the cuts to CAM rebates may not either.

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    16. Kim Darcy

      Analyst

      In reply to Rachael Dunlop

      Hi Rachel. Sorry, I did not mean that just YOUR premium might be reduced. I meant that for all policy holders, premiums could go down, the more healthy policy holders there were, who only ever needed/used CAM, compared to if more unhealthy members who joined who heavily used/acessed regular hospital services. I don't know anything about your fund, but I'd imagine that once a fund has decided on its products and pricing, it would be just far too hard to offer 'a la carte/bespoke' additions/subtractions from the standard menu. I remember, years ago, I went with an American exchange student to MacDonalds in Newtown. He asked for a Big Mac "with no pickle" and a different sort of sauce. They looked at him like he was from Mars.

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    17. Kim Darcy

      Analyst

      In reply to Peter Ormonde

      "One would like to imagine the the cold calculating eye of an insurer would be looking for the proven efficacy of the services they pay out for."
      Maybe they have, and the results say that the quackery causes little harm. From their point of view is the consumer demand exceed the costs of insuring the service, then who are they to say no to a fast buck?

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    18. Peter Ormonde

      Farmer

      In reply to Kim Darcy

      I'm not of the details of how it all works now - having long ago realised that Medicare did my most nicely thanks.

      But from what I understand here is that there is some sort of co-payment or subsidy for services from the Feds. If that's the case then the reason for the inclusion is obvious - a subsidised marketing asset... your tax dollars at work.

      You'd need someone far more boned up than me on the details of how these subsidies and hand-outs work nowdays. Just all so damn unnecessary and wasteful. Always was.

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    19. Sue Ieraci

      Public hospital clinician

      In reply to Rachael Dunlop

      Agreed Rachael - physiotherapy and podiatry are generally considered to be mainstream allied health professions.

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    20. Kim Darcy

      Analyst

      In reply to Peter Ormonde

      I agree on Medicare. The thing is when one payer is so huge - such as the Australia government - that payer has such substantial economies of scale advantages, that any minnow competitors (such as PHI) simply cannot provide any product or service as efficiently, as equitably, as cheaply, or as innovatively as that huge payer. That is why all the hard-core medicine takes place in our public hospitals. Only our public hospitals are teaching hospitals; only our public hospitals have A&E. If your health…

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    21. Peter Ormonde

      Farmer

      In reply to Kim Darcy

      Choice of doctors? We do that here in Australia? You have more than one?

      Part of the salary package for our local GP is a rent free house provided by the council and the proceeds of a raffle held by the town sponsored by Jim's Easy Cut Meats - 1 dressed carcass 1st prize, 1/2 for second. Now I reckon all that should be totally tax deductible myself - or claimable on medicare - but choice doesn't enter into it.

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    22. Edward John Fearn
      Edward John Fearn is a Friend of The Conversation.

      Hypnotherapist and Naturopath

      In reply to Rachael Dunlop

      Sorry Rachael, but Doctors Health fund does include one CAM modality. A good number of my clients are doctors.
      Remedial massage cover
      "For benefits to be paid, the remedial massage service provider must be either a registered physiotherapist, or have accreditation in remedial massage therapy. They must belong to an organisation that adheres to the Department of Health’s governed systems for registration and recognition of remedial therapists.
      The Doctors’ Health Fund now recognises more remedial massage therapists, as we have added to our list of complying organisations, which include, but are not limited to :
      ATMS (Australian Traditional Medicine Society)
      AMT (Association of Massage Therapists)
      AAMT (Australian Association of Massage Therapists)
      ANTA ( Australian Naturopathic Practitioners’ Association)
      IRMA (Institute of Registered Myotherapists of Australia
      ARM (Association of Remedial Masseurs)"

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    23. Sue Ieraci

      Public hospital clinician

      In reply to Peter Ormonde

      Private insurance gives you choice of doctor IN HOSPITAL, Mr O.

      If your salary-packaged GP refers you to the base hospital for surgery, and you have private insurance, you can choose your surgeon. Otherwise, you might risk Jim being on the roster.

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    24. Peter Ormonde

      Farmer

      In reply to Sue Ieraci

      And there is something wrong with this Jim fellow then? What are you alleging Ms I?

      You mean that all is not well in the AMA, the medical boards and the adminstration that ensures the capacity of our doctors and surgeons? That they are letting dodgy surgeons practise on my private parts???

      You mean I can get a "good one" as opposed to a crap salaried one.

      How do you spot a "good one"... do they have bigger cars or does the AMA fit them with a star rating like my fridge?

      What a dreadul system - and a whole industry is based on this hunch playing?

      I'll stick with Jim - he knows more than I do about it.

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    25. John Kerr

      IT Education

      In reply to William Bennett

      You would tie us to the Big Pharma model of medicine? Been there and found better relief elsewhere. Whilst I agree that people should be able to opt out of alternate therapies, this current push to ban anything that isn't "Western Medicine" is really silly.

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    26. Sue Ieraci

      Public hospital clinician

      In reply to Peter Ormonde

      Sorry, Mr O - about my feeble attempt at humour, referring to Jim the butcher in this context.

      I didn't really mean it. It's not that the person on-call is hopeless, or even has a smaller car - it might just not be the surgeon who saw you before, or made the diagnosis, or who always does your surgery.

      The AMA is an association of doctors, not a regulator. The Medical Boards and the administrators certainly do have a role in regulation, including competency and performance.

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    27. Peter Ormonde

      Farmer

      In reply to Sue Ieraci

      What is this pollyanna perspective on the white coated wharfies then Ms I?

      On paper they might not be regulators but try and change the system of assessing NES overseas trained doctors in Australia... same with student numbers and the like. Amazing how concerned the AMA would get about professional standards and regulation.

      Adam Smith would have called the AMA a conspiracy against the public interest, actually.

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    28. Sue Ieraci

      Public hospital clinician

      In reply to Peter Ormonde

      Pollyanna? Hmmm...not sure that's me, Mr O.

      As an association for doctors, of course the AMA would want to have a say in health policy - just like any professional association does in their respective areas. Like any other professional association, they argue on behalf of their members on issues that affect them.

      The AMA also takes on a public advocacy role. Just take a look at the home page: you will find articles and campaigns on young people and gambling, closing the gap for indigenous health, funding for teaching and training. The AMA also campaigns for road safety, against binge drinking, for vaccination, public hospital funding...AND, even obesity (as we are discussing on other TC threads).

      No - I don't think Adam Smith would get too excited about the 21st century AMA.

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    29. Peter Ormonde

      Farmer

      In reply to Sue Ieraci

      Oh no Ms I - not for one moment would I seek to suggest that doctors as a profession are just super folks - particularly the vast herds of them currently devoted to keeping my mortal coil afloat.

      The point I was trying to make is that while the AMA can be seen as an effective - perhaps too effective - voice for the shared interests of its membership - at various times these interests have not been synonymous with the broader public interest. And that depsite on paper having no or marginal regulatory role, the AMA will seek and has sought to influence regulations and regulatory frameworks to suit the interests of their own.

      But not my swarm - heavens no.

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    30. John Kerr

      IT Education

      In reply to Sue Ieraci

      Consider this Sue:

      I can remember a relative, a physio, telling me that chiropractic was a "load of rubbish" thirty years ago. I noticed that she actually uses some chiropractic techniques today.

      I can remember a group of doctors having a good laugh about acupuncture a few years ago. "How can you possibly do anything sticking needles in people? ha ha ha." This closed mind attitude continued for a while until they realised that acupuncture actually wasn't a ridiculous idea. It's just…

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    31. Greg Boyles

      Lanscaper and former medical scientist

      In reply to John Kerr

      John it is not that science and particularly medicine are close minded.

      It is that they have a very much more strict standard of proof than general members of the public have on such matters.

      And particularly with medicine you should be very greatful that they do because this strictness is directly resposnsible for the very high standard of western medicine.

      If enough reproducible scientific evidence of the effictiveness of acupuncture accumulates over time then aspects of it may well be incorporated in western medicine.

      Until such time acupuncture will rightly remain on the fringes!

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    32. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to John Kerr

      "I have certainly received great benefit from chiropractors, massage therapists and acupuncturists over the years. Not placebo effect"

      Yes but how do you know they weren't placebo acupuncture etc?

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    33. Peter Ormonde

      Farmer

      In reply to Chris O'Neill

      I only take placebos myself Chris ... seem to be much safer than the effective ones.

      I reckon a whole health care system based on placebos would be perfect for the placebo private health insurance industry... insurance that doesn't insure providing at best a psychic comfort.

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  2. Peter Redshaw

    Retired

    I am glad to see someone do some research on this issue, but this barely touches the reasons why private health care is a con for most people. And it certainly does not deal with the reasons why it is a con for the nation. As you said all of this done in the ideology of choice. I love it when people offer you a choice when it is not really a choice. Oh that right, that called a Claytons' choice, isn't it, a choice you are offered that is not really a choice.

    I would really like to see some…

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    1. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Peter Redshaw

      "I also believe that we need to look at who as really benefited from this push to private health care. Where is all this money going as well as to whom?"

      15% of health insurance premiums are consumed by the health insurance funds. That is a LOT of money.

      It wasn't enough that they were getting a 30% subsidy for private health insurance while, at best, people paying for private health care out of their own pockets could only get 20% back as a tax rebate. No, they had to hit people with a huge fine even if they wanted to pay for their own health care themselves.

      This is what happens when an industry lobby group (health insurance) achieves high political influence.

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    2. Peter Redshaw

      Retired

      In reply to Chris O'Neill

      All you have to do is look the current advertisements by the Private healthcare Australia in their lobbing against the propose Government's means testing of the private health care rebate to see the political influence of the health lobby. The proposal is about looking at means testing the wealthiest income earners in Australia. Yet the lobby is running the argument that it will affect 12 million Australians and also insinuating that they will end up in the waiting lines of the public system if…

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    3. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Peter Redshaw

      "When John Howard sold us the private health care puppy everyone was told that by increasing the number of people it would bring down the costs. Yet amazingly or not so amazing we have found the opposite has happened."

      Absolutely. One of the excuses for increasing premiums was the increased number of members. It's obvious the IQ level they assume people to be.

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    4. Kim Darcy

      Analyst

      In reply to Peter Redshaw

      Peter, the other very interesting fact is that the tonnes of research already done on this shows that demand for PHI is not dependent on the government rebate. Basically, they could get rid of the rebate altogether, and the PHI companies would barely notice and customers dropping their policies.

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  3. Felix MacNeill

    Environmental Manager

    I made my choice many years ago - I refused and continue to refuse to waste money on an ineffective and inefficient system like private health insurance.

    I generally end up paying the extra Medicare levy as our combined income just tips the scales - I had a tax agent once tell me that I was crazy not to take out private health insurance as it wouldn't cost me any more and I'd get a benefit - it turned out to be almost impossible to explain to her that I was getting a benfit from paying the levy…

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    1. Michael Hay

      retired

      In reply to Felix MacNeill

      I paid for private health while the children were at school. When my wife and I were left at home, I cancelled the private fees. So far I have had three major operations (heart, aneurism and spinal) and none of them have cost me money. Just think of the money I save by refusing to be hoodwinked by private traders and narrow-minded politicians.
      And of course the other matter, which I have not yet read about in the blogs, is the stupidity of paying large sums for private insurance just so that one can then be slugged exorbitant sums for "extras" (which come for free in the public system).
      The private health system is for those who wish to be considered above 'public patients'. It is status symbol that is expensive and unnecessary. With due respect, John Howard was an 'up-market' man on a salary which he used to inflate his own ego - of course, 'for the common good' and not to provide some entrepreneur with an easy source of income.!!

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    2. Yoron Hamber

      Thinking

      In reply to Felix MacNeill

      Such a good comment. And I congratulate you, and your wife. on your good common sense :)

      If you have a good public health care, why dismantle it, for private interests? We introduced the concept here in Sweden, as a benevolent gift from our right wing government wanting to privatize, and although a few benefit from it, the scandals seems more.

      And, ahem, Those that benefit today had probably would have the dough to pay for it any which way :)

      It's a little like them also introducing and subsiding 'cleaning maids' by the state. One of those things I thought we had left with the industrial, as well as social 'revolution' coming.

      Saying that is a job as any other job. Sure it is, but those using the services would probably have the dough to pay for it privately. As it is I am one of those paying for their privilege :)

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  4. John C Smith

    Auditor

    Looking at unnessary expenses by Insurerers I wonder how much of my payments are wasted. I used to get a quarterly bill and suddenely it went monthly. Then all the junk mail I get by post and the lady who stick the junk mail on fence. All advertisng and sponsorships. All waste.
    But I had two medical scares and I got one fixed immediately and I was able to get the best available for the one I wanted fixed because I got medical insurance.. The other scared me so much but I didnt want to get it fixed but I am encouraged to get it fixed because I got medical insuarance.

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    1. Peter Redshaw

      Retired

      In reply to John C Smith

      Ah, the problem is John, if all this money that has been siphoned off into subsidising the private health system in one form or another had gone in to the public system you would have also been able to get your two medical scare fixed as well. The problem has been that the money to subsidise the private system has been pulled out of the public system. After all the money to subsidize the private system had to come from somewhere.

      And what is the best way to convince the public to take up private health care other than to run down the public system. And what best way to than to create a scare campaign to convince people they will not be able to get their health problems dealt within the public system when they need to. And as far as I can see that is what has happened and we have all bought it with hardly a question raised about the way it was done.

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  5. Kim Darcy

    Analyst

    Karen/Kirstin
    My apologies, if I have got the wrong idea from a quick scan. Your research is based solely on 'semi-structured interviews' with 29 people, all of whom had PHI. All 29 lived in Tasmania. "Over half" lived in a region of "northern Tasmania", among the poorest and lowest SES regions in the whole country. They were ALL aged 35 and under. Of that 29, only 9 had children. Of that 29, twelve earned below $40,000 pa.
    "Despite participants in our research mentioning choice as the reason why…

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    1. Karen Willis

      Health sociologist, qualitative researcher at University of Sydney

      In reply to Kim Darcy

      Dear Kim
      Thank you for your comments. There are three health regions in Tasmania, and in the northern region, babies are delivered at the public hospital (which does, as you say, admit private patients as well as public). After birthing women with private health insurance can transfer to one of the two private hospitals if they wish. Services in the North West region have always been contentious with government decisions making about privatization – the Mersey Hospital being a case in point. Yes…

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    2. Sue Ieraci

      Public hospital clinician

      In reply to Karen Willis

      Ms Willis - did your survey distinguish whether the participants accessed surgical services or not?

      Private health insurance does give the opportunity for choice of provider, as well as much earlier access for some surgical procedures.

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    3. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Sue Ieraci

      "Private health insurance does give the opportunity for choice of provider, as well as much earlier access for some surgical procedures."

      Insurance is not the only way to achieve these objectives. Unfortunately, paying directly for one's own health services does not fit into any of the stereotypes for Australian society.

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    4. Kim Darcy

      Analyst

      In reply to Karen Willis

      "We know that there is a lot of research into choice in health Care, taking an economic perspective. However, our research is predicated on the fact that social, cultural and even political context is important when people make choices."
      Well, I am not familiar of any research in economics, which is not aware of the importance of social/cultural/political contexts, when people make choices. Also, surely any research which is focused on the what drives consumer demand is be definition 'economics…

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    5. Sue Ieraci

      Public hospital clinician

      In reply to Chris O'Neill

      Quite right, Chris. Paying out-of-pocket gives your the same choices.

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  6. David Wright

    Retired

    Great article but did you look at choices for the older person. While trying to get a policy that suits me and my wife, at any price, I really have not found one. You can certainly find policies that do not include obstetrics or reproduction services, which at our ages are unlikely to be needed, however these policies also exclude things like heart problems, joint problems, etc, which are more likely to be needed.

    You might also not be too fussed about using a private hospital but would like your choice of doctor and timing. These options are also available by using basic policies which generally only include sufficient cover for private use of a public hospital, which we would be happy with but again the cover for things like heart and joint problems is not offered with these policies.

    So our only option is to take out cover that provides far more than we are ever likely to use meaning that we are paying for something that we do not need. Where's the choice in this!

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    1. Karen Willis

      Health sociologist, qualitative researcher at University of Sydney

      In reply to David Wright

      Dear David
      Thanks for your comment. Yes, this will be something that we are looking at more closely as we proceed with our current study.

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    2. Chris Saunders

      retired

      In reply to Karen Willis

      Another reason for the increase in membership is the extortionate nature of the governmental policy initiated by the Howard government and continued today in that if you do not join up to a private health fund now then if you choose to join up at a later date your membership fee will be much higher. For retirees on fixed income, this is not something they can afford to gamble with. So many will have private insurance, which does not adequately cover them for what actually ails them.

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    3. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Chris Saunders

      "the extortionate nature of the governmental policy initiated by the Howard government and continued today in that if you do not join up to a private health fund now then if you choose to join up at a later date your membership fee will be much higher"

      Indeed. It's ironic that Liberal governments complain about socialism when they actually implement a form of socialism in the shape of (effectively) compulsory private health insurance.

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    4. Yoron Hamber

      Thinking

      In reply to David Wright

      Maybe it's me being paranoid here?

      But the older one get the greater the chance of needing hospitalization, as well as other types of care. It's like a insurance company. So they make sure you pay more, just 'in case' :)

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  7. Greg Boyles

    Lanscaper and former medical scientist

    Private health insurance is a con - merely a means of CEOs and directors to obtain a funding stream for their exorbitant wages under the guise of a public service.

    We would be better off having the option to pay an increased medicare levi that has well defined additional benefits associated with it.

    Or simply having a sliding scale for the medicare levi based on you annual wage and reviewed upon change of circumstances.

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    1. Michael Hay

      retired

      In reply to Greg Boyles

      You are right on the money, Greg.
      I wish we could have politicians who would govern, rather than pander to pressure groups. If this were to happen, we would have a taxation-funded system of public hospitals, public schools and public transport that would benefit every single person in the country - other than the well paid "CEOs and directors".

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  8. Colin MacGillivray

    Architect, retired, Sarawak

    Those who choose not to pay for health insurance which mainly funds elective treatment anyway should remember that surgery in SE Asia is cheap and effective. My double inguinal hernia op cost $A1000 and my broken fibula metal plate job with the ambulance 60km round trip and a night in hospital cost $A3,300. Both surgeons (different hospitals) were trained at Edinburgh U. Where I live, Kuching, Sarawak there are 4 private hospitals all used by locals and Indonesians mainly. A Canadian friend here recently had an aortic valve replacement in Kuala Lumpur.

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    1. Chris Saunders

      retired

      In reply to Colin MacGillivray

      Thanks for the info on that Colin. It's a very practical suggestion. Would Australians going to SE Asia for medical treatment benefit the people of SE Asia?

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    2. Colin MacGillivray

      Architect, retired, Sarawak

      In reply to Chris Saunders

      Certainly 90% of the staff at the 4 hospitals here in Kuching are from Sarawak and the rest from West Malaysia, I'm guessing. So more patients equals pay and job security for locals.
      I made a mistake in my conversion of RM7500 to AUS$2,500 for the ankle repair job.

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  9. Sally Boteler

    customer service officer at health & leisure

    Timely discussion for me...thanks everyone, you have helped me make a decision.
    I am cancelling my hopital cover and boosting my ancillary benefits:-)

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  10. Michael Shand
    Michael Shand is a Friend of The Conversation.

    Software Tester

    Great Article highlighting some very important points, thank you for posting

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  11. Rosie Hayes

    Retired

    Interesting comments. I worked in a major public hospital A & E department for 10 years as a Receptionist. I had to give the patient the choice, if they had private insurance, as to whether they wanted to be admitted as a Public or Private patient. Those who had done their research knew that it was better to go Public because they would get the Specialist on call and would be treated the same anyway and would not have to pay any extras not covered by their insurance. There is little chance…

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    1. Peter Ormonde

      Farmer

      In reply to Rosie Hayes

      More to the point Rosie - who would want to be treated by someone whose primary concern was one's capacity to pay? And to pay for that privilege as well.

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    2. Rosie Hayes

      Retired

      In reply to Peter Ormonde

      Exactly Peter. But it happened more times than I care to remember. I actually believe that private health insurance is purely to divide this nation - those who can afford it (often only barely) and those who cannot. I also believe that many with private health insurance do not see the private health subsidy as a Government handout, which, of course, it is.

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    3. John Kerr

      IT Education

      In reply to Rosie Hayes

      Great! Good to see someone standing up for patient rights against the greedy specialists!

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  12. R. Ambrose Raven

    none

    Voluntary private health insurance (PHI) is a classic example of the costs and problems of trying to privatise and exploit a basic human need. Due to high costs and poor quality and range compared to the (once-) free, universal public health care system, it has suffered repeated crises ever since it arose in the colonies, with the Commonwealth Government being politically obliged to introduce subsidies from 1951.

    PHI has always consistently failed to provide effective cover at a reasonable price…

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  13. John Kerr

    IT Education

    One thing about private health insurance that has always bugged me is that it costs you when you go to a public hospital. Whilst on holidays with an asthmatic child we went to a public hospital. "Did we have private health cover?" "Yes." I said. "That will be $60, thanks." Next time I said "No" and it was free. If I can't have the doctor or whatever that I want then what's the point of having private cover? Imagine that if you had your car comprehensively insured and when you had to get it…

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  14. Hanna Law

    Retired

    Here's another issue with PHI that urgently needs to be addressed: swapped to Navy Health last year because we were able to get a much better deal - less $$ and more benefits. Until then we were with BUPA (formerly MBF) and they kept cutting things out, eg Ambulance Cover was reduced to just 2 emergency trips per year. So I made the switch. I enquired whether Navy Health had Flinders Private Hospital on their approved hospitals list - it did. My husband needed emergency surgery and was admitted…

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    1. Peter Ormonde

      Farmer

      In reply to Hanna Law

      Can't really be sorted Hanna - it is intrinsic to the beast. Best avoided completely and rely on the best public health system in the world.

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