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The Rising Cost of Australian Health Care

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The Rising Cost of Australian Health Care

Budgeting For Health Means Making The Right Choices

When Health Minister Sussan Ley announced that private health insurance premiums would rise by an average of 5.59 per cent in April 2016, it didn’t come as a surprise.

But 2016 was a little bit different, because in January, Ms. Ley asked insurers to resubmit their annual applications for premium increases.

As a result, twenty Australian health funds subsequently lowered their demands, resulting in the lowest price hike in four years.

By law, private health insurers must apply to the health minister for approval of any changes to their premium prices.

By law, private health insurers must apply to the health minister for approval of any changes to their premium prices. The minister said that thanks to the government’s intervention, the average Aussie family with hospital and general health cover would save $166 per year.

These annual price hikes are based on an average. Each health insurer is different and individual policies vary considerably. How these hikes will affect you depends on your insurer and the types of cover you’ve chosen.

In some circumstances, you may see little change in your private health care costs or even a decrease.

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While critics of these rises are prone to compare them with the country’s overall rate of inflation, Health Minister Ley insisted that comparing premium hikes to the general inflation rate was “not that useful” because health inflation rates were closer to eight per cent across Australia.

2016: A Year Of Change For Health

The government is looking at a number of options to improve health care in 2016 and, where possible, reduce its costs.

Some new ideas include:

  • Asking seven million Australians with chronic and complex illnesses (diabetes, arthritis, asthma, heart disease, mental illness, etc.) to enrol with a single GP practice.

Introducing possible changes to the way GPs are paid, including the use of paid care coordinators to help guide patients through the health system, reducing the red tape burden on doctors.

  • Introducing possible changes to the way GPs are paid, including the use of paid care coordinators to help guide patients through the health system, reducing the red tape burden on doctors.
  • The possibility of scrapping the current subsidy for private health insurance entirely, instead opting to pay for 40 per cent of the costs of all public or private hospital treatment.
  • A major review of the Medicare Benefit Schedule is also underway (this Schedule sets the fees paid to doctors by Medicare for tests, operations and consultations). This review will look at ways to lower fees for medical services that have become cheaper due to advances in medical technology, while chopping out services that are deemed to no longer be ‘best practice’.

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  • A major overhaul of the government’s e-health record system. New records would contain allergy and medication data, a GP-authored healthy summary and the capacity to add blood tests and scan results to the mix.

People with severe disorders will have a tailored plan developed by their Primary Health Care Network to include drug and alcohol services, mental health nursing care, vocational assistance, peer support and psychological services.

  • Sweeping reforms to the mental health system are also in progress. People with a severe mental illness will get an integrated care package much like the National Disability Insurance Scheme. Reforms will also include a ‘stepped care model’ in which patients with mild problems are assisted with online counselling services and those with moderate problems get Medicare subsidies for psychologist visits. People with severe disorders will have a tailored plan developed by their Primary Health Care Network to include drug and alcohol services, mental health nursing care, vocational assistance, peer support and psychological services.

It has become increasingly clear to the government that the status quo for Australian health care is far from perfect or even sustainable; the challenge of finding proactive long-term solutions is huge and never-ending.

The multiple aims of improving service, embracing new technologies, reducing waste and keeping it all affordable is a tough balancing act. Major cuts to health funding or a shifting of costs to consumers can have serious and far-reaching consequences, so the focus must be on improving efficiency.

The Reasons Health Costs Are Rising

Health spending chews up an increasingly large chunk of state and federal budgets – it has grown 74 per cent over the past decade. Some spending categories cost more than others, especially hospitals, medical services/primary care (including Medicare) and pharmaceuticals.

Many factors contribute to increased health costs. Our population is growing and it’s also aging. Health inflation is also rising faster than the Consumer Price Index.

But these factors account for less than a third of the increase – the remainder is simply due to the fact that people in every Australian age group are receiving more expensive medical services per person and accessing them more frequently.

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Quality of treatment in Australia has risen with advancements in technology, facilities and medical training. In many cases patients are receiving treatments or medications that didn’t even exist ten or fifteen years ago.

For example, the average 50-year-old today visits a physician more frequently, consumes more prescription drugs and has more tests and surgical procedures than a typical 50-year-old did a decade ago.

The predominant reason we’re experiencing growing health costs is because we’re accessing medical services more often and those services are improving in quality (and price).

The predominant reason we’re experiencing growing health costs is because we’re accessing medical services more often and those services are improving in quality (and price).

Spending more on health is to be expected in a prosperous, first-world economy – and it’s not necessarily a bad thing. With extra costs come extra benefits. Australia enjoys impressive life expectancy rates and a standard of health care that’s the envy of many other nations. As medical technology progresses, we’ll enjoy better treatment in the future too.

But these advancements don’t come cheap and someone has to pay for them.

Ways To Reduce Your Health Care Costs

Prevention is better than cure, so keeping yourself healthy is by far the easiest way to beat the rising costs of health care. The less you need to access health services, the less you’ll spend from year to year.

Many of the current burdens on our national health system are caused by diseases and conditions that could easily have been prevented by simply adopting healthier lifestyle choices.

These days, it’s not difficult to get screened for a variety of cancers and other health issues – you just have to take the time and effort to visit your doctor and get it done.

Whenever you encounter any kind of unusual symptoms, get them checked out sooner rather than later – you can potentially save a considerable sum in treatment costs by catching a problem early.

In some cases, a rapid diagnosis might even save your life.

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Of course, life comes with no guarantees. Even when you do your best to look after yourself, there’s no way to predict what the future might bring.

Unexpected illnesses and accidents can happen to anyone at any time, so you need to make sensible plans to deal with these events.

Private health insurance aims to alleviate the financial pressures associated with unexpected health calamities like a stay in hospital, inability to work due to injury and a range of other unpleasant surprises.

It can also help you maintain health by assisting with essential payments for specialist medical services like dentists, chiropractors, podiatrists, psychologists, physiotherapists, optometrists and so on.

Health Insurers Are Not All The Same

While there’s nothing much you can do about annual rises in average health fund premiums, there’s plenty you can do to trim your individual health insurance costs.

If you already have private health cover, now is the time to check it over and reassess your requirements.

Sometimes, all that’s needed is to shop around for an insurer that provides a level of cover more suited to your needs. You can also look at the option of increasing your excess to reduce your premium.

If you already have private health cover, now is the time to check it over and reassess your requirements. Are you getting the cover you want? Are you possibly paying for cover you don’t need?

The health insurance industry is ultra-competitive at the moment – you’ll find all sorts of discounts for signing up online, policy add-ons, bonus deals, extra services, sign-up-a-friend deals and similar incentives.

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When checking out different insurers, there are some important points to consider.

An insurer’s online FAQs page is a good place to find general information on how they operate, and the Australian Private Health Insurance Ombudsman provides useful annual reports on providers.

  • How long have they been in business?
  • What independent industry awards have they won?
  • What’s their complaints record like?
  • How many testimonials from happy customers can you find?

An insurer’s online FAQs page is a good place to find general information on how they operate, and the Australian Private Health Insurance Ombudsman provides useful annual reports on providers.

Look for ‘no-frills’ insurers with a track record of great customer service and attractive policy options that are affordable but don’t leave you underinsured.

And always read the Product Disclosure Statement thoroughly so you know what’s covered and what isn’t – this will prevent surprises when it’s time to make an insurance claim.

If you are looking for the best health insurance for you, be sure to get a quote with Budget Direct.

 

http://www.smh.com.au/federal-politics/political-news/private-health-insurance-premiums-to-rise-by-56-per-cent-in-april-20160301-gn7xji.html#ixzz41q36l3DY

http://www.news.com.au/lifestyle/health/major-reviews-to-healthcare-system-plot-more-changes-in-2016/news-story/d3374d0ca006dd1eb7e3e442b1e22dc6

http://theconversation.com/tough-choices-how-to-rein-in-australias-rising-health-bill-13658