$100 billion in Cuts to Healthcare Need to be Explained

“Claims by the private health fund lobby group Private Healthcare Australia, that “there is an opportunity to reduce Australia’s healthcare costs by $100 billion over a ten-year period, while at the same time improving healthcare outcomes” [1] need to be spelled out in detail.” CEO of the Australian Doctors’ Fund, Mr Stephen Milgate said today.

Despite high levels of profitability, the major health funds have resorted to using the ‘crisis’ word.  They are calling on the new Health Minister to exercise “more courage”[2].  But the question is, courage to do what?

In their recent submission, the health funds are demanding that the government “remove the requirement to provide minimum benefits for palliative, rehabilitation and psychiatric care”[3], as well a new maximum excess level (currently $500, PHA mentions $2,000)[4].

The PHA needs to tell Australians with private health insurance, what conditions will no longer be allowed hospital admission, and who will pay for the ‘preventive healthcare programs’ that will render hospital treatment unnecessary.  Claims by PHA that ‘preventive healthcare programs’ can effectively reduce hospital admissions, and that “as few as 5-10% of patients consume as much as 50% of total hospital expenditure”[5] would indicate that the chronically ill would be the target group to reduce hospital admissions.

Despite repeated claims that introducing ‘coordinated care’ results in lower health costs, no evidence has emerged to support this claim.

According to Dr J. Michael McWilliams of Harvard Medical School, writing in the New England Journal of Medicine on 8 Dec 2016, “Though attractive, this notion is not evidence-based. Studies of programs or practice models designed to enhance coordination and management of care for patients with multiple conditions and multiple providers have shown minimal, if any, consistent savings.”[6]

According to Private Healthcare Australia, “Reducing unwarranted hospitalisations could deliver benefits of $8.2 billion per annum, or 6.2% of total healthcare system costs.”[7]  But who decides what are ‘unwarranted hospitalisations’?

Doctors and their patients live in the real world of disease, injury and suffering.  Medical practitioners have many years of training in managing their patient’s medical conditions.  A patient is indicated for hospital treatment because the nature and/or severity of their medical condition requires it.  Most patients do not seek hospital admission for its own sake.  Patients take out private health insurance to cover the costs of their in-patient treatment.

It’s not the Minister for Health who needs courage, but Private Healthcare Australia who needs the courage to spell out in detail, who will be the losers from their proposed $100 billion in cuts.

Stephen Milgate, CEO, ADF

Ph: 02 9567 5595; Mob:  0425 283 411