More prevention is needed but it is not a remedy for all ills

Is investing in preventable health strategies a solution to making health premiums more affordable? The answer is a resounding yes, but it’s also just one component of a multi-faceted issue.

An ageing population and an increase in chronic conditions are some of the biggest health challenges for Australia and the healthcare system. The number of Australians aged 65 and over is set to double within the next 40 years and this will mean greater demand on our health system and simultaneously fewer taxpayers to help fund it.

Additionally, one in two Australians live with a chronic disease, which accounts for more than a third of the total health budget. This total health budget recently surpassed $185 billion.

Whether you use the private or public system – these are issues that impact us all. And unless more is done to prevent and manage chronic disease, these costs will swamp both the public and private health systems.

In 2014 Medibank started working with governments and GPs to support Australians with chronic conditions. Back then we were supporting these customers by simply paying benefits toward their hospital admissions. But now, we’re using predictive data analytics to reach out to them before they get to this point. The results have been promising, with one program showing a reduction in death rates of 30% on average.

These programs have been picked up by other funders such as state governments, primary health networks and other health insurers. CareComplete is now one of the largest health management programs in Australia and has enrolled around 30,000 participants and worked with more than 9,000 GPs.

The fact remains however, that Australia spends approximately 1.3% of the health budget on prevention, despite more than 30% of the health cost burden being preventable. Bridging this gap is a win/win for the community and for health budgets but it does come at a cost. We’ve invested more than $95 million in our CareComplete program since it started.

We also recognise that there are benefits in incentivising people to champion their own health and wellbeing. This is behind the launch of our Live Better rewards program which recognises customers for taking healthy actions and rewards them with a gift card, more on their extras, or savings on their premiums.

Last week we welcomed the Health Minister’s comments in support of more hospital-in-the-home services. Last year we doubled the number of customers who were able to have treatment in their own home by offering rehabilitation, dialysis, chemotherapy and palliative care. Providing customers with this choice is why we want to transform into a healthcare company rather than just an insurer.

But there are regulatory restrictions on how far private health insurers can take their preventative health and home-based interventions. With the challenges facing our health system, these restrictions are arguably now unnecessary, contributing to sub-optimal health outcomes for patients and avoidable pressure on health costs.

It would be remiss though to put the sole responsibility to contain health costs on preventative health alone. Affordability of healthcare in Australia is a more complicated beast, as we’ve seen this week with the release of research from the Grattan Institute highlighting potential cost savings in the private hospital system.

What we need is the government, healthcare providers and insurers to work together for the future sustainability of our world-class health system.

This means addressing out-of-pocket costs in Australia, which are some of the highest in the world. It means tackling higher than necessary prostheses prices, which are three times higher in the private system than they are in the public, notwithstanding the already inflated price in Australia relative to other parts of the world.

It means supporting young people to have private health insurance. When the Government gave insurers the option to provide young people with a discount, we automatically applied that discount to 150,000 existing customers. Not all insurers chose to do this.

And it also means pursuing alternative models of care, because the cracks are beginning to show in Australia’s long-held ‘hospital first’ model, with public waiting lists growing by the day.

So yes, there is so much more that can be done. And at the heart of this needs to be the broader health sector challenging the status quo.