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Community Affairs Legislation Committee

BARTONE, Dr Tony, President, Australian Medical Association

TABUR, Mr Matthew, Executive Officer, Australian Healthcare and Hospitals Association

THURECHT, Dr Linc, Senior Research Director, Australian Healthcare and Hospitals Association

TOY, Mr Luke, Director, Medical Practice Section, Australian Medical Association

RAIT, Associate Professor Julian, President of AMA Victoria, Australian Medical Association


CHAIR: Welcome. Do you have any comments to make on the capacity in which you appear?

Prof. Rait : I'm also chair of the Council of Private Specialist Practice for the federal AMA.

CHAIR: Thank you very much for coming. Could you please confirm that information on the parliamentary privilege and the protection of witnesses and evidence has been provided to you—great. We have your submissions. I'd like to invite both groups to make an opening statement, and then we will ask you some questions. Would the AMA like to go first?

Dr Bartone : Thank you. I would like to thank the Senate committee for inviting the AMA to talk on such an important issue. As I have publicly said, the AMA has always called for a simpler and fairer private health system. The Australian health system relies on a dual system of public and private health. Nearly 70 per cent of elective surgery occurs in private hospitals. We often talk about private health offering choice—choice of doctor, choice of hospital. It's why people take out insurance policies. We talk about private health offering shorter waiting times. It's a major benefit of the system. But we also need to talk about private health as a critical component of taking the pressure off the public system.

The AMA has been represented on the PHMAC committee, and there has been work on these reforms for the last few years. We have had representation on many of the subcommittees as well. It is fair to say that, through the process, we've not always agreed with everything discussed nor have we agreed with every decision made. For example, we have not agreed with restrictions being allowed in basic policies which may make them look, at first glance, competitive with bronze and higher level policies, which do not have restrictions, when in reality basic doesn't deliver much. However, we have stayed at the table because we firmly believe that, if we don't get these reforms to private health insurance right and soon, we may see essential parts of the health care system disappear from the private sector.

Our key belief is that we cannot expect the private system to thrive or even survive, if there is not value in insurance policies. Patients are smart. They know that there is no point outlaying thousands of dollars every year if the coverage isn't there. Affordability means very little without value. The key to achieving value in insurance is instilling confidence in individual policies, and that requires transparency. Clear, understandable, straightforward comparable policies—that is true transparency.

It is for that reason that we support the concept of developing gold, silver and bronze insurance categories. Doctors are intelligent people. But I can tell you that we are all bewildered by the many different definitions, the carve-outs and exclusions from some 70,000 policy variations—70,000, that's not my figure; it's the government's. It's unbelievable. No wonder we're always being caught out.

Australians want reasonable and simple things from their insurance. They want coverage. They want the choice of practitioner and the choice of hospital. They want the treatment when they need it. We can't have patients finding out they are uncovered after the event or when they require treatment, and it's all too late. That's why we support standard clinical definitions. Coverage for a condition should not vary between insurers and policies. It's disappointing that in the past it has. We know there is increasing corporatisation of private health, and the market power is shifting in favour of the for-profit private health insurers but insurers should never determine the provision of treatment in Australia. Australians do not support a US style managed healthcare system, neither does the AMA. Standard clinical definitions are one policy lever to stop this but, to make them work, we need to engage with each speciality within the medical profession.

Right now, the government has released the private health insurance rules for comment. They have done this before the Senate has finished its deliberations, before this legislation is finalised. These rules outline what the MBS item numbers are that sit behind the definitions. More time is needed on this critical work. It would be wise for there to be more consultation and a better outline of how these reforms will work in tandem with the MBS review updating all those items and their descriptors. Adequate time and modelling are critical to ensure that the patient treatment pathways have been addressed and that these essential elements have not been overlooked.

It is well-known that we do not support junk policies. As we have said in our submission here and in our related submission on the rules underpinning this legislation, if a basic policy category doesn't provide much coverage because restrictions have been allowed, this should be made crystal clear. We welcome the decision that no restrictions are allowed in gold, silver and bronze outside the chip services. We also acknowledge the effort the government is going to in order to make insurance cheaper for younger Australians by using age-related discounts, but we also ask the government be very careful.

We do not support dismantling the community rating system. This must be protected to maintain equity of access to private health treatment. One area we are disappointed in with the recent announcement is pregnancy cover. It does not make sense to us as clinicians to have pregnancy cover in a higher level of insurance only. Many pregnancies are unplanned. Meaning people are caught out underinsured when pregnancy is restricted to high-end policies. Pregnancy is a major reason that the younger population considers taking up private health insurance They are less able to afford higher level policies. We need to make sure this is in reach.

Private health insurance should service the needs of health consumers who have paid for it. It is a big cost and we know that, at the end of the treatments, patients are suffering from out-of-pocket costs on top of their premiums. These reforms will hopefully make clearer what people are covered for. If the reforms work, their coverage will be more expansive. But there is a long way to go. Insurers benefits schedules vary—in some cases, significantly. One look at our most recent private health insurance report card shows you by how much. A frozen MBS schedule contributed to this pain.

We also have the issue within the system that says as soon as a doctor charges 1c above the insurers' scheduled fee, where it exists, their known gap arrangement, the insurer must revert to paying only 25 per cent of the MBS scheduled fee. We have seen one insurer link the gap payment rates for doctors to the hospital facility, meaning unless a patient goes to that private facility the insurer has chosen to contract with, they too will suffer an increased out-of-pocket cost.

In conclusion, these reforms are a step in the right direction. We don't agree with every single detail in them. We think some changes, as I have outlined, could be made, but the overall design is a positive one. We also think there is more work to be done once these round of reforms are in place. I'm happy to take any questions.

CHAIR: Great, thank you very much. Just before we go to the Australian Healthcare and Hospitals Association, I understand that the AMA would like to take some photos of the proceedings in the room, which is great, but I just wanted to confirm that was okay with the Australian Healthcare and Hospitals Association.

Dr Thurecht, would you like to make an opening statement?

Dr Thurecht : The Australian Healthcare and Hospitals Association, AHHA, welcomes the opportunity to appear today before the Senate standing committee hearing the Private Health Insurance Legislation Amendment Bill. The Australian Healthcare and Hospitals Association is Australia's national peak body for public hospitals and healthcare providers. Our membership includes state health departments, local hospital networks, public hospitals, community services, Primary Health Networks, primary healthcare providers, aged-care providers, universities, individual health professionals and academics. As such, we feel we are ideally placed to be an independent national voice for universal health care to the benefit of the whole community. Our association's guiding principle is that health care in Australia should be accessible, equitable, sustainable, effective and outcomes focused. As we say, AHHA is the voice for public health care.

As a general comment on the legislation being considered here, AHHA acknowledges that the intention of the proposed changes is to increase the sustainability of private health insurance participation in Australia. AHHA acknowledges that the reforms to private health insurance are intended to bolster participation in private health insurance membership and improve the perceived value of private health insurance by consumers. AHHA supports the use of a community rating principle that prohibits insurers from discriminating against people with premiums that they charged based on past or possible future risk factors such as age, pre-existing conditions, gender, race or lifestyle. Community rating is, of course, also underpinned by the system of risk equalisation that helps to protect insurers. To be effective, we recognise that this requires a broad membership base with both younger and older members, healthy and less healthy members. That spreads the burden of high-cost claims across all insurers. This contributes to keeping all private health insurers financially viable over the longer term.

But a viable private health insurance industry also requires that people perceive value in the products that they are paying for. Not all people who purchase private health insurance are willing customers in the manner that we would ordinarily expect. This is of course largely driven by the twin policies of the Medicare levy surcharge, which makes the purchase of private health insurance the economically rational choice for many consumers, in tandem with the lifetime health cover loadings, which produce similar economic incentives in the face of uncertain future private health needs.

The proposed legislative amendments represent a significant shift in the mix of products that the private health insurance industry will in future be offering consumers. Private health insurers will in some areas also have much more flexibility in managing their portfolio of products. Private health insurance is a complex area for even health literate consumers to properly understand. This points to the crucial need for transparency in product offering, product pricing and the out-of-pocket costs that patients will face. AHHA believes that private health insurers should always clearly and transparently justify changes in insurance premiums and the terms of their policies. This is particularly the case with the broad suite of changes in private health insurance legislation being considered here.

On some specifics, AHHA supports the removal of the waiting period for mental health services for privately insured patients; strengthening the power of the Private Health Insurance Ombudsman in investigating consumer complaints and improving information for consumers; and measures to improve the transparency of out-of-pocket costs when people use their private health insurance. The AHHA also supports access to travel and accommodation benefits for insured people living in regional, rural and remote areas of Australia. However, AHHA would be concerned if the proposed change to the improper discrimination provisions, intended to prevent insurance against people on the basis of where they live, resulted in higher premiums for people in rural, regional or remote areas. Travel and accommodation benefits should be funded through risk equalisation and not through geographically differentiated insurance premiums. AHHA also supports in principle those amendments that are intended to improve affordability of health insurance for young Australians by providing age-based discounts for private health purchased before the age of 30 and increasing the maximum voluntary excess levels for products providing an exemption from the Medicare levy surcharge.

However, AHHA does have some concerns around the potential for community rating and consumer choice to be eroded by the suite of legislative changes being proposed here. For example, the explanatory memorandum discusses the risk-averse selection of insurance products that have zero or low excesses and suggests insurers may respond by increasing premiums for these products or, indeed, closing them down altogether. Additionally, private health insurers will be able to terminate at their discretion existing insurance products people are currently covered for and transfer affected people onto new policies. On this point, the proposed legislative amendments specifically provide circumstances in which the community rating principle can be suspended, enabling insurers to close a product so that it's no longer made available to new policyholders or to terminate existing policies held by customers.

Also to be removed is a grandfathering provision that certain individuals who have been insured continuously from May 2000 are provided an exemption from the Medicare levy surcharge. It's not clear how many people will be affected by this provision or what the likely impact will be on their insurance premium from moving to a complying health insurance product.

AHHA understands the importance of simplifying the market for private health insurance and the need for financial viability among insurers over the long term. However, these concerns need to be balanced with appropriate consumer protections that do not unfairly disadvantage some individuals or impose change without due consultation with those who will be affected. Furthermore, any change to one aspect of private health insurance needs to be mindful of how this will impact on the pooled risk of all health insurance providers.

In closing, AHHA acknowledges the intention of the legislative amendments is to increase the sustainability of private health insurance participation in Australia. As I said, AHHA supports health care that is accessible, equitable, sustainable, effective and outcomes focused. Although the implications of how the proposed measures of this bill will be fully implemented are not yet visible—for example, some of the details to be included in the private health insurance rules—in principle, AHHA supports the following: premium discounts to make private health insurance more affordable for young Australians; increased access to travel and accommodation benefits for people living in regional, rural and remote areas; improved transparency and product information for consumers; increasing the powers of the Private Health Insurance Ombudsman when investigating consumer complaints; increasing maximum voluntary excess levels for insurance products that provide an exemption from the Medicare levy surcharge; and also measures to improve transparency around out-of-pocket costs when people are actually using their private health insurance.

AHHA does, however, have concerns about the possible application of measures in the proposed legislation that exempt insurers from improper discrimination and also how the suite of changes could impact on the principle of community rating. These exemptions and amendments also allow insurers to sell policies with stated benefits and then unilaterally change the value of these benefits. The Australian Healthcare and Hospitals Association does not support erosion of provisions or the principle of community rating in the market for private health insurance. But the AHHA does support transparency in the marketplace for private health insurance products and equity of access to health care for all Australians. I'm happy to take any questions you might have.

CHAIR: Thank you very much for that. Just a quick question from me, to start off with. Dr Thurecht, you've stated you support the improved affordability measures for younger Australians. We heard from previous witnesses that that was one of the aspects of the bill that they thought would put pressure on community rating. So do you think, on balance, that that's a measure worth including. Do you not see it as being a threat to community rating? How are you, in your mind, balancing those two things?

Dr Thurecht : In the first instance, we're very mindful of the affordability issue of private health insurance for all Australians. That's particularly prevalent for younger Australians as they make their way into the workplace and start building up their careers. A colleague from AMA previously mentioned the importance of, for example, obstetric services being available through private health insurance. So there is an issue of equity of access to private health insurance and the cover that that can provide. As to undermining the community rating, that is essentially accurate. But there are a lot of areas in the private health insurance framework where exceptions and exclusions are made that back away from having a more universal type private health insurance costing environment. So, yes, it's a trade-off.

CHAIR: Thank you. I have a quick question for Dr Bartone. I think it's fair to say you've been pretty critical of the basic policies. Do you oppose them in principle or do you oppose them if they are not clearly explained? So, if someone goes into a basic policy very well aware of what they're receiving for it, is the AMA then okay with them or do you think that they shouldn't be there at all?

Dr Bartone : It's a two-stage process. In terms of the lack of transparency and the lack of clarity, those have been our major objections up to this point. What might cover a number of areas, when the times comes it really doesn't cover anything. That is the first issue. It's primarily designed as just a way of getting around the tax rebate issue at the end of the year for many Australians. It doesn't essentially provide an opportunity or a level of access to care that will benefit the system as a whole. So, essentially, the lack of clarity is pretty universally recognised as being part of the reason we're so opposed to those basic policies, in that framework, but, secondly, when it comes down to it, it doesn't really give you all that much more extra benefit or service or assistance in the process. However, if it's clearly defined, it's a start.

CHAIR: Thank you.

Senator SIEWERT: I want to go back to the community rating issue. Do both of your organisations acknowledge that the young people's discount will undermine the concept of community rating?

Dr Bartone : It certainly has the potential if not implemented correctly or if not further reviewed carefully in the fullness of time to see the effect it's having. It is a watch-out area; it is a risk area. I recognise that there needs to be something done about the affordability factor, especially for younger Australians who may not perceive the value proposition from their particular point of view. But, at the end of the day, it does come down to: 'Watch out and let's keep an eye on this area specifically as it's implemented.'

Senator SIEWERT: Thank you. Can I ask about AHHA?

Dr Thurecht : Sure. It's something which we have to be very careful about and keep an eye on. To add to my previous comments about the issue of equity with younger people, that's one side of the equation. The other side of the equation is that, to the extent that younger and, presumably, healthier people are coming into the pool of people being insured, it does change the risk profile that's being collected. There are two moving parts which are, in some senses, going against each other and producing what is, essentially, at this point an uncertain outcome.

Senator SIEWERT: It seems to me that you're both saying there's potential for impact and we need to review it. Can I ask whether you think that, in the longer term, the principle is going to be sustainable?

Dr Thurecht : What I would like to see is that, in the medium term, the Productivity Commission do an examination of the issue so that we have the evidence available.

Mr Toy : I would add to that: close monitoring in the short term to ensure that some of the other factors that community rating protects, in terms of looking at risk, are not undermined. But, as AHHA pointed out, if community rating didn't exist, we'd have problems. If we don't get young people into private health insurance, we'll continue to have problems. I think that, on balance, we would like to make sure that PHIO and government keep a close eye on it and that we have that medium-term review. But, in the short term, something needs to be done to improve the accessibility to private health insurance for younger Australians.

Senator SIEWERT: I'm not sure if you were in the room when we heard the evidence on the modelling. We were talking to both the Consumers Health Forum and CHOICE about the modelling of the impact of these amendments. Are either of your organisations aware of any modelling that has been done on the potential impact of these amendments?

Dr Thurecht : We are not aware of any financial modelling that's been done on that.

Mr Toy : Senator, we're aware of the modelling that's been made available on the department's website, where they list all the outcomes from the PHMAC committees, and I believe there's some publicly-available Deloitte modelling.

Senator SIEWERT: But that's the extent of the modelling that you're aware of.

Mr Toy : Yes.

Senator SIEWERT: Thank you. Have you discussed with the department the potential for doing anything more?

Mr Toy : As a member of the PHMAC, that committee's work is ongoing. We have a representative on that committee but, obviously, one of the constraints we have is that the confidentiality arrangements for each of the members on that committee start to kick in. The representative on that committee, along with the representatives from a lot of the groups that are appearing here today, would continue to have confidential discussions with the department and request various areas to be looked into, going forward.

Senator SIEWERT: But, because of confidentiality, you don't know. Is that correct?

Mr Toy : Correct.

Senator SIEWERT: Can I ask both of your organisations: do you think this package of amendments and/or reforms is going to boost participation in private health insurance—the package overall?

Dr Bartone : I think, essentially, it will. As we've indicated, it's a good start. It's a good set of initial reforms. They do need further mapping and further aligning with the clinical definitions and rules that have been released. That's a significant body of work, and one that will not really complete in the necessary time frame to make a fulsome judgement on that. There are also the ongoing issues around the MBS reviews which are being conducted at the moment, and so some of the MBS item numbers that underpin many of those rules may change or may move. So again, there's another added layer of uncertainty in the back end of that. But overall it's essentially a good suite of reforms to enhance the clarity and information exchange between a bewildered consumer and a very complex system. And the simplification: as long as there's clarity about what procedures are covered and which aren't covered, in which policies, and to the extent there's no fine detail in exclusions or carve-outs, as part of that, that should go a long way to addressing some of the unhappiness, and some of the stories that we hear. But of course, there are other areas where it will have no impact.

Senator SIEWERT: Before we move onto AHHA to answer that question, I have a follow-up question for you, Dr Bartone. You mentioned the MBS review in your opening statement, and you've just mentioned it again. Do you foresee a problem if this legislation is passed? The review seems to me to be an iterative process, and, as you've just articulated, the MBS items may change—are we putting the cart before the horse, given your level of concern there?

Dr Bartone : It's not so much the suite of reforms that are being put on the agenda that are the issue; it's the rules and the definitions that underpin those categorisations. They need to be mapped out to ensure that the clinical pathways they refer to in their coverage reflect common day treatment pathways in our current hospitals, and also the mapping across from current policies to the new gold, silver, bronze policies. They're the areas that particularly require some further detail. But at an overall level, the simplification to gold, silver, bronze does make a lot of sense and will help guide consumers in that process.

Senator SIEWERT: Can we go to the AHHA to answer that question then? I will have to put some questions on notice.

Dr Thurecht : So how is it going to affect the take-up of private health insurance? Was that the question?

Senator SIEWERT: Yes.

Dr Thurecht : I think that entirely remains to be seen. It really depends on how well these quite fundamental changes are communicated to consumers. The fundamental problem that consumers have with private health insurance is: does it represent a good value proposition? Certainly I acknowledge there's potential there to improve the take-up, but is it guaranteed? That really remains to be seen. In my opening comments I used the word 'transparency' a lot. That's a really important dimension that needs to be brought to this space, for the benefit of consumers. As part of that, it's not just deluging consumers with information but also giving them the appropriate level of information to make a truly informed judgement about what policies may be appropriate for them and what sort of value proposition they represent.

CHAIR: On the issue of pregnancy cover, my understanding is that it's not covered under bronze and silver at the moment. Is that correct?

Mr Toy : Senator, it would be hard for us to definitively rule that out with 70,000 different policy variations out there. That's one of the complications. Where we are coming from is that it's obviously a major attraction for younger people, and being only in gold presents an affordability issue going forward. Going back to Dr Bartone's comments about the patient pathway, some other related areas of coverage, such as female reproductive services and the like, are covered in different levels. We're looking at the continuum from the patients' pathway perspective. Depending on where they are on that journey, it may require, even under the new reforms, for them to shift up levels as they go along.

CHAIR: Okay. My understanding was that the Deloitte modelling showed that the inclusion of pregnancy coverage in gold and silver would increase premiums by something like 20 per cent. I might not have that figure exactly right, but is that your understanding? Obviously that is then going to factor significantly into affordability, and obviously older Australians would certainly not see that as being necessarily of value to them.

Mr Toy : As always, it's one of those issues of trade-off and complexity. Certainly if pregnancy was added to risk equalisation pools, if certain policy levers were pulled, you would see a different premium outcome. Some of the difficulties are trying to predict how would consumers and younger people behave, what level would they move to, how does that change our risk pool, and how does that, therefore, flow through to premiums? I'd be hesitant to definitively put my finger on a figure and say that's exactly how much premiums will rise.

CHAIR: Fair enough. If you have any further clarification, I'm happy for you to take it on notice. If you don't have anything to come back with, that's fine.

Senator PRATT: This question is to the president of the AMA. In terms of the changes going far enough to rein in costs, what other measures do you think government should be looking at or pursuing?

Dr Bartone : In addition to the gold, silver, bronze?

Senator PRATT: What's in this legislation, yes.

Dr Bartone : Most definitely we need to look at the rebate schedules of the MBS, but also the insurers' schedules of fees that underpin it. That would ensure that, even despite the really high level of either no gap or known gap of as much as nearly 96 per cent of all procedures being undertaken with those caveats, it would really reduce the out-of-pocket experience, which is partly another significant factor in the patient experience, especially when they're making that ultimate assessment about the affordability and the economic reason to maintain or discontinue their insurance.

Senator PRATT: Or the economic question of whether to use their existing health insurance based on whether the out-of-pocket costs are going to be too high. If you've simply got your insurance to avoid the levy, you might still decide to opt into the public health system. How common a problem is that, do you think?

Dr Bartone : Anecdotally? A significant one. But I might ask my colleague Professor Rait to answer further.

Senator PRATT: And I will ask that same question to the AHHA as well.

Prof. Rait : We were just discussing this morning the concept about the fact that we think that in many cases people might be delaying having procedures done because of the concern about out-of-pocket costs. There have been some reductions in the utilisation of private facilities in Victoria that I'm aware of, and this seems to be largely triggered by people deferring elective surgery—possibly because of their fear of out-of-pocket costs. These are people who have taken up insurance, but have some concerns about the out-of-pocket experience and, therefore, are reluctant to use their product. Or, indeed, perhaps in seeking care they are putting themselves onto a public hospital waiting list in some cases. I think the affordability is an issue.

Senator PRATT: So you're saying that essentially people are waiting to see how fast the public hospital list moves before they opt to use their private health insurance?

Prof. Rait : That's correct.

Senator PRATT: So I might ask other witnesses whether they also see that as a problem.

Dr Thurecht : I guess the first observation I'd make is that every Australian has a right, under the Medicare agreement, to use public hospitals' services if they so choose. As far as using private health insurance, government policy pushes a lot of people into taking out policies that, in other circumstances, they may not want. I think we have an issue of consumer choice there. I think you earlier asked a question about—

Senator PRATT: I'm not necessarily against the consumer choice; I support consumers making that choice. What I need to work out is whether that represents good value to the taxpayer in terms of providing services to those consumers. On the one hand, we've made someone pay for a private health insurance product; on the other hand, we've foregone their tax income to force them to take out that private health insurance. How is it—

CHAIR: We don't force them too; it is a choice.

Senator PRATT: It simply makes sense that people would opt to take out private health insurance if it equals or is less than their tax liability. Where does that sit in terms of how consumers behave and whether that represents good value for money for government?

Dr Thurecht : Just to be clear, are you talking about the Medicare levy surcharge or the PHI rebate?

Senator PRATT: Yes.

Dr Thurecht : The surcharge?

Senator PRATT: Yes, the surcharge.

Dr Thurecht : I guess, by government policy, people are placed in a situation where they make a rational economic choice of whether they buy or don't buy. I think the second part of your question, and probably the more important part, is: having purchased the private health insurance, should they have any lesser right to access public hospital services given our universal Medicare agreement?

Senator PRATT: No. But in that sense, that tax dollar that we would have received from that taxpayer that has gone towards their private health insurance instead—if they ultimately use the public system anyway, as they clearly can and should have a right to do, what is rational for government to do in terms of subsiding those costs for consumers.

Dr Thurecht : I find myself thinking that you're characterising the Medicare levy surcharge in a way that I don't think it is ordinarily thought about. It's not a tax that's been avoided in the sense it's part of the normal income tax scale. The Medicare levy is an additional impost if people of appropriate financial means don't take out private health insurance. I think this conversation started off with discussions around other ideas about—

Senator PRATT: Yes, I did ask what more we could be doing, and to ask you about specific concerns that your submission has around amendments to the community rating requirements. What do you see as the longer-term effects of this on, firstly, private health insurance consumers and, secondly, private health insurance coverage in Australia?

Dr Thurecht : They are a great many issues you touched on. What we would observe is that this suite of legislative changes is going to change the private health insurance landscape in a number of ways. Some will work towards increasing take-up. Some may work towards decreasing uptake. As to the level of coverage people will choose to take, their basic gold, silver or bronze, that remains to be seen. This points to a need to monitor, closely, the actions of private health insurers, that they're transparent around the pricing of premiums. And there is a need, in the medium term, to review the impact of this broad suite of changes on the industry.

In terms of what else can be done to lower costs for premiums, AHHA has been on the public record for some time now calling on the government to institute an inquiry into appropriate levels of profitability and returns to equity within private health insurers. I'm not sure if you've seen any of our submissions, but we have pointed out that in the 2016 financial year Medibank Private achieved returns on equity of 26 per cent, and NIB achieved returns on equity of 25.8 per cent. I'm not an insurance industry accountant, but within financial markets that doesn't seem to be an appropriate level.

Senator PRATT: No.

Dr Thurecht : We'd simply make the call that appropriate levels of profitability should be investigated. In my opening comments I said it's important that insurers remain financially viable but they shouldn't earn excess profits through unnecessarily high increases in premiums.

Senator PRATT: That's a point well made. Thank you very much.

CHAIR: We will need to move on. Thank you, all, for your participation today.