Reforms To Lure Private Patients
The Age
Tuesday August 19, 1997
Private hospital patients will be able to get up-front quotes on the price of surgery under Federal Government reforms to private health insurance announced yesterday.
The change is among a series of measures aimed at encouraging more people back into private health insurance by minimising out-of-pocket expenses associated with hospitalisation.
The Government also announced a crackdown on perceived abuse of the health insurance system.
Among the targets are expectant mothers who take short-term insurance cover to give birth in a private hospital. Under the new rules, the qualifying period for obstetrics will be extended from nine months to a year.
And in a move aimed at minimising costs to patients, doctors will be encouraged to strike contracts with private hospitals.
The Federal Health Minister, Dr Michael Wooldridge, said yesterday the contract system introduced by the former Labor health minister, Dr Carmen Lawrence, had failed, but the new reforms had the capacity to improve the situation.
Under the previous reforms, doctors were encouraged to contract with health funds. The Labor Government legislated so that health funds could insure for medical costs above the Medicare benefits schedule, provided the contracts were in place.
The reforms were intended to eliminate out-of-pocket costs borne by patients on top of rebates they received by allowing insurers to theoretically insure their customers for all costs.
But doctors have been reluctant to embrace the changes, with the Australian Medical Association likening the Labor reforms to United States-style managed care, under which treatments can be refused if they are too expensive.
Dr Wooldridge said the new reforms gave legislative protection against any moves by health insurers to dictate accepted clinical practice, thus "enshrining in law the doctor-patient relationship", and preventing US-style managed care entering Australia's private health industry.
He said doctors would no longer be required to negotiate only with the health funds, but could secure deals with hospitals instead.
Private hospitals that in turn failed to strike deals with health funds would be protected by a "second-tier default benefit", under which they would receive 80 to 85 per cent of the average benefits paid under contracts made by the particular fund.
Australia's private health funds have been haemorrhaging for the past 12 years. Fewer than one-third of Australians have private health cover.
The Australian Medical Association's president, Dr Keith Woollard, welcomed the moves to protect private hospitals from managed care's "worst effects", but called on Dr Wooldridge to "completely abandon Labor's managed-care agenda".
"Doctors are not signing contracts because they have seen how managed care directly interferes in the doctor-patient relationship," he said.
THE PRIVATE HEALTH REFORMS
* Patients will get up-front quotes before surgery.
* Doctors will be encouraged to strike contracts with private hospitals, not just health funds.
* The qualifying period for obstetrics from the time of taking up private health insurance will be extended from nine to 12 months.
* Protection for hospitals that fail to sign up contracts.
* Legislation to ensure United States-style managed care does not gain a foothold in Australia.
© 1997 The Age