Welcome focus on private health

AMA advocacy is leading to federal government reforms to private health, writes Dr Michelle Atchison.

After a hiatus in private health reform during the pandemic, I’m pleased to report that the government is seriously considering reforms to private health. There is a strong focus on private health insurance right now thanks to the release of a raft of consultation papers this year, but we have bigger plans and have been working to get them on the agenda.

There are some positive suggestions in the actuarial work that the Department of Health and Aged Care commissioned which underlays these consultation papers. This analysis was proposed by the AMA in 2020 in the AMA prescription for private health insurance and raised again in the AMA repeat prescription for private health potentially restricting clinical autonomy.

AMA President Professor Steve Robson has also nominated private health reform as the AMA’s key priority for the second half of 2023 and beyond.

At its July meeting, the Council of Specialist Private Practice (CPSP) considered draft AMA recommendations in response to a consultation on actuarial studies that considered the structure of government ‘carrot and stick’ incentives that encourage Australians to take out private health insurance. These settings haven’t changed significantly or been indexed since 2004.

The AMA submission in response to these consultations welcomed proposed reforms, noting that for too long, private health policy has been on ‘set and forget’ mode, meaning the system is falling behind changing customer needs and demographics.

The AMA response was particularly supportive of recommendations to update and annually index the Medicare Levy Surcharge after years of zero or inadequate indexation that has led unfair settings that are now negatively impacting people on lower incomes.

We also expressed concern many people are effectively being priced out of private health insurance policies that meet their needs, as reports reveal some providers are increasing their Gold premiums by up to 8 per cent.

At its recent meeting, Council also considered an AMA Research report on out of hospital models of care in the private health system. The report was then approved by Federal Council at its August meeting and will be publicly launched soon.

Federal Council had identified development of this report as a priority following the AMA’s Private Health Summit last year, where stakeholders almost unanimously agreed that a well-governed expansion of the out-ofhospital sector could result in significant wins for everyone, most particularly patients.

However, in the absence of appropriate regulation in this space, vertically integrated insurers have become the main providers of this kind of care, with no clinical oversight of the programs they are developing. In addition, only people with the right kind of policy or insurer can access them.

The AMA would like to see its proposed Public Health System Authority guide the evolution of a more varied out-of-hospital sector that steers away from vertical integration and managed care. A key enabler to achieving this is a minimum payment guarantee for the out-of-hospital sector that requires the private health insurer to pay even if they do not have a contract with the out-of-hospital provider.

In October, the AMA will hold a workshop with key stakeholders to hammer out a consensus on the details of our Private Health System Authority and other key CPSP private health reform priorities, including the declining availability of private obstetrics services and difficulties attracting psychiatrists to provide inpatient care.

One of the great strengths of the AMA is that it represents the whole profession. This gives the AMA great respect and power that no other medical organisation can hope to achieve. I have seen this in action, and I can assure you that your membership fees are not wasted.

However, from a private specialist point of view it also means one of my jobs is to keep up the high profile of private specialist practice within the AMA and ensure our major issues are dealt with as the highest priority.

Given the AMA President’s clear message that private health is a key priority now and into the near future, please rest assured that we are working hard on your behalf. Your support, your ideas and your membership fees all contribute to this. As an AMA member, you are making things better and helping shape the Private Specialist Practice of the future.

The consultation also requested responses to an Ernst and Young study on reforms to default benefits — benefits which are critical to ensure the power balance doesn’t swing too far in favour of the insurers.

There is also nothing stopping insurers providing a policyholder with lower benefits, or no benefits at all, if they choose to access out-of-hospital care from a provider not owned by, or contracted to, the insurer. Obviously, this is inhibiting the growth of non-insurer led out-of-hospital services, restricting patient choice and

Former AMA(SA) President Dr Michelle Atchison is Chair of the AMA Federal Council of Private Specialist Practice.