We know what the issues are, so let’s get on and fix them together

There’s been a lot of media coverage this week following the release of the Grattan Institute Report into private health.

The report from Grattan said if current trends continue, Australia will find itself in a "death spiral", where young and healthy people abandon private health cover, leaving a larger proportion of unhealthier, older and expensive users.

While Australia has a high-quality health system, more needs to be done to make sure it remains sustainable for future generations. In particular we need to ensure quality healthcare is affordable for all. This is why Medibank continues to advocate for greater reform in order to remove cost from the health system. We know that the job of reform is difficult, but it is absolutely necessary to keep our health system strong.

We know the major challenge facing private health insurance is affordability. Without further reforms to address rising healthcare costs, privately insured people will increasingly move to the public system. This will result in higher costs for the public sector, longer hospital waiting times, and a shortage of beds for the people who need them most.

So, what can be done?

Earlier this week, I joined The Grattan Institute's Health Program Director Stephen Duckett, the CEO of Cabrini Health Dr Michael Walsh and Consumer Health Forum Chief Executive Leanne Wells on a panel for ‘The Policy Pitch’ held at the State Library of Victoria.

While we have different perspectives and different views on the way forward, there was also a great deal we agreed on.

We agree that affordability is the most significant current issue and that additional reform is necessary to drive real change. We need reform that can deliver immediate impact and yet we also need to be thoughtful and considered because it will impact both the public and private sectors. We agree it’s a complex issue with changes needed in the short and long term.

In the short term, the most impactful change would be to reduce “waste” in the healthcare system. We know that private insurers pay significantly more than other countries for devices such as hip and knee joints and cardiac stents. For example, we pay five times more than New Zealand for a commonly used cardiac stent. There is no clinical explanation to justify this huge difference. Current government regulations require funds to pay inflated prices. By changing this to allow funds to pay comparable international prices, we would save Australians approximately $500 million per year.

In the medium term, we agree the health industry should look to shift more care from expensive in-patient hospital settings to care in the home or in the community, where clinically appropriate. There’s a growing body of evidence that this can deliver better outcomes at a lower price, allowing us to pass savings onto customers. Australia has a very hospital-centric health system which is out of step with international trends. We need to look closely at these trends and see how Australia can adopt similar change. Medibank has already launched a range of at-home programs including rehab, dialysis, chemo, palliative care in the home and the feedback from our customers on these services has been exceedingly positive.

In the long term, there is agreement that we need investment in preventative health to help people avoid ending up in hospital. We know chronic disease is an increasing burden on our healthcare system. With a stronger focus on prevention, the high-cost complications of chronic disease can be reduced, and savings returned to the whole healthcare system. For example, by reducing the rate of obesity in our society we would reduce the impact of osteoarthritis, which is a major driver of hip and knee replacements.

The private health system plays a critical role in maintaining the high-quality healthcare we enjoy in Australia. Not only does it give people access to the hospital and doctor of their choice, it gives them the chance to get non-emergency procedures done quickly and it also relieves pressure on the public system. This is worth fighting for, because ultimately it benefits all Australians.

Our healthcare system depends on the delicate balance of private and public funders and providers. Undermining one will undoubtably have an adverse effect on the other. The good news is that there is a growing number of health professionals keen to drive the change needed.