Many patients are understandably surprised when they receive a large bill after a hospital admission for treatment covered under the terms of their health insurance policy. The rise in customer complaints to the industry Ombudsman in recent years is testament to this.
 
People in this situation learn the hard way that knowing what treatments are, or are not, covered in a health insurance policy is only half the story. The other half is about the performance of the policy – what benefits are available when the need for hospitalisation arises. 

Transparency, freedom of choice and clinical independence

In a recent opinion piece Doctors’ Health Fund CEO Peter Aroney argued for greater transparency around the performance of health insurance products at the time of purchase.  This is because two principles we value highly at Doctors’ Health Fund are clinical independence and freedom of choice. If a fund pays poor benefits and has a restricted number of hospitals it works with, it effectively reduces clinical independence by limiting the number of practitioners who are able to provide their services to members. Policy holders in these instances have reduced choice unless they are willing to pay large gaps.

Current data

Currently the only piece of health fund performance data consumers are given (usually after they have made the purchase) is the ratio in a policy’s Standard Information Statement showing the proportion of medical services paid by the fund that have no out-of-pocket expenses. 
 
This statistic might be better than nothing, but it is still a very high level number. Even if a fund has a good ratio, it’s no guarantee of performance of anyone’s particular product or the service they are claiming. Plus, because it only relates to service numbers, it says nothing about the size of out-of-pocket costs incurred by the member.  A fund may have a higher proportion of low-value services fully covered while limiting benefits on more expensive services. These nuances are not borne out in this kind of information.  

Website enables comparison

A website prepared by the Private Health Insurance Ombudsman uses more detailed data to show each fund’s performance across a few measures including medical benefits. Putting aside the shortcomings mentioned above, the website does show comparative information by health fund. Go to PrivateHealth.gov.au > Health funds tab > select health fund > select Performance tab.
 
For each state and territory it shows how the selected fund performs compared to the industry average for:

  • Hospital related charges covered
  • Medical services with no gaps
  • Medical services with No or Known gaps
  • Extras charges covered
  • Private Hospital Agreements
  • Day Hospital Agreements

In the interests of transparency at point of purchase, provision of this information would be more enlightening to the consumer than the single ratio currently on the Standard Information Statement.

Our high performance

Medical practitioners appreciate the investment you make towards better health and Doctors’ Health Fund has excellent performance across our range of Hospital and Extras policies with:

  • Over 90% of our members’ hospital-related charges covered(1)
  • Over 90% of our members’ in-hospital medical services covered with Gap agreements(2)
  • Above the industry average for paying in-hospital medical services with no Gap(3)
  • Above the industry average for proportion of members’ Extras treatment charges covered(4) 
  • Our average premium increase has been below the industry weighted average for the past five years.(5) 

We will continue to advocate for industry reform that makes it easier for consumers to determine the real value of their health insurance and avoid the unexpected bill shock that too many customers continue to experience.

To assist you in determining potential out of pocket hospital costs, we’ve put together a checklist and our website’s Contracted Hospitals and Doctor Search pages are useful tools when considering your provider options. 

(1) (2) (3) (4) State of the Health Funds report 2015, Private Health Insurance Ombudsman (published March 2016).
(5) Department of Health 2017 Premium Round Individual private health insurer average premium increases