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Monday, 18 November 2002
Page: 6584


Senator KIRK (2:26 PM) —My question is to Senator Patterson, Minister for Health and Ageing. Can the minister confirm that patients with private health insurance are hit with out-of-pocket gap costs for one in every five medical services provided in hospitals? Is it not also the case that the average out-of-pocket gap payment for medical services for privately insured patients was $74.28 in the June quarter, up from $67.38 per service in March this year? Isn't it the case that, despite the government's supposed no-gap policy approach, a significant gap problem continues to exist which undermines the value for money that Australians with private health insurance receive?


Senator PATTERSON (Minister for Health and Ageing) —Let me begin by saying that under Labor private health insurance was falling over. Private hospitals have told me over and again that, had we not introduced incentives to ensure that people took out private health insurance and brought it up over 40 per cent, it was not viable. A previous health minister, former Senator Richardson, said that when private health insurance dropped below 35 per cent or 30 per cent—I cannot remember what the figure was—private health insurance was not viable.

What we have done is put in place an incentive for people to go into private health insurance that has meant that people can now have access to private hospitals. We have seen a 12 per cent increase in admissions to private hospitals and we have seen a reduction in the gap that was there when Labor was in. Also, the number of people leaving private health insurance meant that those who were sicker, those who were more likely to need it and those who were older were left in and they were paying higher and higher premiums which were unaffordable. With the rebate of 30 per cent, which the Labor Party is now threatening, the average family has a $750 reduction in the cost of their private health insurance.

We have seen, as I have said, a 12 per cent increase in private hospital admissions and a minus one per cent increase during the last financial year in public hospitals. We have seen private health insurance take enormous strain off the public hospital system. What we have seen is a reduction in the number of people who have to pay gaps under our private health insurance system. Of course some people will pay gaps. Some doctors will not participate in the no-gap scheme but there are many doctors who do. I appreciate the fact that many doctors participate in the no-gap scheme.

Let me say that under Labor, especially when they are threatening a 30 per cent rebate, private health insurance will go into a downward spiral and fewer and fewer people will be able to afford it and more and more pressure will be put on public hospitals. We now have more than 50 per cent of breast cancer operations and, I think, more than 50 per cent of joint replacement operations being undertaken in private hospitals. That is what people want to do. They do not want to sit in hospital queues. The state governments, with a $3 billion windfall, which we did not take back from them when private health insurance went up, still have people sitting in hospital queues for elective surgery. They are now able to have that done in private hospitals, without waiting and with a rebate, and there has been an increase in the number of people being able to have those sorts of procedures undertaken.

Senator Kirk ought to go back and look at Labor's history of private health insurance, look at what gaps people were paying, look at how few people were in private health insurance, and talk to the private hospitals and find out that they were about to go under. They were not building more beds, and they were not increasing their numbers; they were closing down because people were going out of private health insurance in droves.


Senator KIRK —Mr President, I ask a supplementary question. Is the minister aware that all privately insured Australians could face additional out-of-pocket gap expenses as high as $150 for hospital treatment next year to cover the cost of medical indemnity insurance of private hospitals? How does the spectre of these additional gap costs for private hospital admissions honour the Prime Minister's promise that private health insurance would be more affordable and attractive to consumers?


Senator PATTERSON (Minister for Health and Ageing) —I have been in discussions with private health insurers and with the hospitals. At the moment, some of the claims that the hospitals are making about the costs of their indemnity, I think, are hard to justify in terms of patient cost. The Howard government has put in place guarantees for medical indemnity the like of which I do not think any profession has ever seen. For example, when a doctor insures himself or herself for a certain level of cover, a claim above $2 million will be covered. I could go into detail about all the backup that we have put in place for medical indemnity. That is in addition to the work that Senator Coonan has been doing, not only to ensure that we keep the cost pressures on medical indemnity down, but also to keep the cost pressures down on public indemnity. (Time expired)