‘Sick’ health insurance ban must go

You are paying top dollar for private health insurance, but you can’t claim for most medical treatments delivered in the home or outside of the hospital. How stupid is that?

Choking on red tape

Well, the Grattan Institute’s Health Program Director, Stephen Duckett might not go that far.

But his analysis of how private health insurers are restricted from paying out on non-hospital treatments raises questions about rising prices due to inefficiencies and government red tape.

The consumer is not getting the best deal possible. In an article for The Conversation, Duckett says that must change.

While it’s possible to have treatments in the comfort of your home, with nursing or other clinical supports, Duckett says it is often not possible.

What's the problem?

Private health insurers are tightly regulated. If you have a top “gold” package, for example, the insurer must pay for all hospital services that attract a government Medicare Benefits Schedule (MBS) payment, other than cosmetic surgery.

But insurers are currently not allowed to cover care provided outside of hospitals, except in very limited circumstances.

Insurers are allowed to cover eligible home-based programs developed by private hospitals, but they get to decide on a case-by-case basis whether to cover these programs. Each insurer also makes a separate decision for each program.

This means private hospitals must negotiate with the private health insurer for each program, for each contract period. This makes it almost impossible for private hospitals to develop sustainable business cases for their programs.

Patients often miss out on the convenience of having hospital-type services in their home, and instead face prolonged hospital stays.

The red tape needs to be untangled to make it easier for private hospitals and doctors to run these programs, and for insurers to pay for them.

An opportunity to make a difference

Duckett says there are big opportunities to improve efficiencies in the private sector by shifting care from inpatient to outpatient settings – particularly for rehabilitation, psychiatric care, eye injections for retinal conditions, and outpatient vein surgery.

“The public sector has already expanded its alternatives to hospital inpatient care,” he wrote.

“It’s time for the private system to do the same.”

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