Higher inflation is driving up hospital costs and private health insurance (PHI) premiums in Australia, forcing major healthcare provider Ramsay Health to terminate its policy with its insurer Bupa.
According to the Sydney Morning Herald (SMH), the annual inflation in Australia now sits at 5.1%, the highest in 20 years. As a result, insurance clients have become concerned about the effect of higher inflation as insurers resist private hospital operators' calls to meet their higher expenses.
Ramsay Health, for example, decided to terminate its agreement with Bupa last week after discussing a 7% increase in insurance premiums. Both parties are still negotiating, but Bupa members who go to Ramsay Health might soon face higher out-of-pocket costs.
Private Healthcare Australia chief executive Dr Rachel David, representing health funds, said she expects insurers to insist on keeping annual premium increases – to be approved by the federal government – below inflation. She further explained that insurance companies cannot afford a 7% annual increase, while passing on this premium increase to members might push Australians to drop their cover.
Meanwhile, the Australian Medical Association (AMA) warned that public hospitals might fail to deal with ambulance ramping and elective surgery waiting lists if the federal government's 6.5% funding cap remained. With numerous lockdowns and elective surgery bans during the COVID-19 pandemic extending elective surgery waiting lists, some patients were forced to fund their procedures – which Private Health Australia deemed risky.
“Whatever is left over from the 6.5% after you take out the increasing costs of healthcare each year is what is left to allow our hospitals to care for more patients,” said AMA president Dr Omar Khorshid, as reported by SMH. “The Commonwealth's minority funding share only covers activity. If you need to build more beds to free up the emergency department, stop ambulances ramping or clear waiting lists – state and territory governments must, for the most part, fund that expansion.”
As the elections approach, Members Health Fund Alliance (Members Health) calls on political parties to return the PHI rebate to its original percentage of 30% to improve Australians' access to healthcare.
