Private health 'worried' on means testing
Madeleine Heffernan
June 8, 2012




AUSTRALIA'S private health industry is still unclear about the impact of the looming means testing of private health insurance, according to sector veteran Robert Cooke, as insurers urge policy holders to pay up front to avoid additional costs.   

''I think we're all worried,'' said Mr Cooke, the managing director and executive chairman of Australia's second-largest private hospital company Healthscope.

''I think the number of people who will drop [their coverage] … I don't think that's going to be big. But what is up in the air is how many people will drop their products.''
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Healthscope has had a busy few weeks: signing a preferred supplier agreement with health insurance giant Bupa, which will give Bupa members discounts and sweeteners for procedures undertaken at Healthscope's facilities, and selling part of its pathology business to Sonic Healthcare for $100 million.

And despite the sharemarket shining on health companies now, Mr Cooke - the former head of Affinity Health and Symbion Health - said there were no immediate plans to return Healthscope to the bourse.

The Melbourne-based business was bought by private equity firms The Carlyle Group and TPG for $2.7 billion a couple of years ago.

''I think we have a couple of years' worth of work here at least,'' he said.

''Besides, now is not the time to be listing. Trying to get an IPO at the moment would be bloody impossible,'' he said, referring to skittish equity markets.

Instead, Healthscope's energies are being directed at hospitals, its Asian pathology business, and Victoria and South Australia, where it already has significant market share.

In particular, Mr Cooke said Healthscope was ''working furiously'' for planning permits on a number of a sites across the country, including Brisbane Private Hospital, and had a strong pipeline of second-tier hospitals, such as psychiatric hospital The Sydney Clinic.

Mr Cooke said although this meant a large capital expenditure bill, ''the places are full [and] we're making money, so normally you can find capex when you're making money''.

Mr Cooke tipped the non-exclusive Bupa deal could trigger agreements across the country, as private operators seek to boost their public profile and ride the wave of greater consumer research - particularly online - into healthcare, and insurers seek to add better value and shore up their revenues amid lower government rebates.

Stephen Leeder, professor of public health and community medicine at the University of Sydney and director of the Menzies Centre for Health Policy, said he was ''all for private guys being innovative''.

''It is a partial step along the line to a managed care arrangement - but a very early step - where care is integrated for patients at all stages, from GP, to specialist, to hospital and back,'' he said.

''The success of the proposal will depend on how the medical profession and patients take to the new arrangements, whether they can be provided without raising membership fees and so forth.

''We need to remember that the public still pays handsomely for everyone's private insurance and makes a substantial contribution to private hospital care, so the public is not indifferent to how this experiment works out.''

With means-testing for government rebates on private health insurance set to take effect next month, many insurers are encouraging people to pre-pay their insurance before that date to retain their rebate.

George Savvides, managing director of insurer Medibank Private, recently told a Senate committee that Medibank had advised its members that it was ''absolutely legitimate'' for them to pay up to 18 months in advance to avoid the means-testing.

The Coalition has promised to reinstate the rebate if it wins the next election. Labor says the rebate changes will save the budget $2.4 billion over three years.    

Read more: http://www.theage.com.au/business/private-health-worried-on-means-testing-20120607-1zyxj.html#ixzz1x98pCvrH

Labor hates private insurance with a passion - always has.

Quote:



So long as all those people who leave private health don't get sick and start using the public system.

Unless labor's cunning paln is to wait-list them untill they die.


Yes, i see where this is going, labor for the win.