Medibank Private spends less of its members’ premiums on administration than its competitors, cementing its position as Australia’s value-for-money health fund.
According to the Private Health Insurance Administration Council’s (PHIAC) end of year data released today, Medibank Private is ahead of the industry average on key efficiency and performance measures. The data showed that:
- Medibank Private’s Management Expense (the amount of members’ premiums spent on administration) was 10.6% of total contributions, compared to 11.3% on average for the rest of the industry, as at 30 June 2002.
However, Managing Director George Savvides said that Medibank had further reduced its management expenses to just 8.7% of member contributions in the September 2002 quarter. In other figures:
- Medibank Private paid back 97.5% of member contributions as benefits, against average competitors’ pay back of 87.5%.
Mr Savvides said the results showed that Medibank Private was delivering on its promise to streamline its operations and deliver value to members. “I am especially pleased with the good news on our management expenses,” Mr Savvides said.
“When I came to Medibank Private, I said that we would reduce the cost of running private health insurance.”
“Now I’m pleased to note that our Management Expense Ratio (the cost of running Medibank Private) is now at a best practice level of just 8.7% of member contributions, which is down from around 12% just over a year ago.
“And our industry-leading benefit payout ratio underlines the fact that our members get a better benefit payment return from their health cover than other funds.”
Mr Savvides said that Medibank would continue to add member value through its retail centre refurbishment program.
“We will be refurbishing up to 1/3 of our 100 strong retail branch network over the coming months, introducing an innovative store layout and new health information technology,” Mr Savvides said.
Three more refurbished stores are due to open in late 2002/early 2003 – in Hobart, Broadmeadows (Vic) and Burwood (NSW).