The ACCC has reported to the Senate that there are still some contentious anti-competitive issues within the Private Health Insurance industry.
On June 5th the Australian Competition and Consumer Commission released their 13th annual report on the Private Health Care industry. The report contains ‘an assessment of any anti-competitive or other practices by health insurers or providers which reduce the extent of health cover for consumers and increase their out-of-pocket medical and other expenses’.
The ACCC reported that in 2011 almost twelve million Australians had private health insurance general treatment cover, which was a 3% increase from the previous year, and that of these over 10 million people had private hospital cover.
The ACCC claims, however, that the ‘overall trend affecting the sector appears to be a potential shortfall in the provision of adequate consumer information’.
A major concern regarding this shortfall was to do with informed financial consent (IFC).
The Private Health Insurance Bill 2006 defined IFC as:
‘… the consent to treatment obtained by a medical practitioner from a patient, prior to that treatment whenever possible, where the practitioner has sufficiently explained his or her fees to the patient to enable the patient to make a fully informed decision about costs. Medical specialists who participate in health funds’ gap cover arrangements are required to provide informed financial consent prior to treatment where possible.’
The idea behind IFC is that consumers are provided with all of the information necessary for them to make an informed decision about their health care. The ACCC states, however, that ‘it is clear from both contact data and submissions that there are persistent information gaps for consumers and that no one cohort of health sector participants accepts responsibility for providing the consumer with full disclosure of all the cost they will face’.
The lack of full disclosure regarding the cost of health care is a burden to Australian consumers. Of significant concern to the ACCC were gap payments and consumers being unaware that their health insurance doesn’t cover certain procedures. They recommended that insurers provide ‘clear, straightforward information about health insurance products that are subject to restrictions and exclusions’.
Another major focus of the Report were preferred provider schemes. Preferred provider schemes aim to decrease or remove gap fees and give consumers higher rebates.
The ACCC, however, claims that these schemes could potentially harm the consumer through limiting choice by forcing them to receive treatment at particular clinics.
The ACCC found that ‘preferred provider arrangements have the effect of limiting allied health services provided’. However they found that the arrangements were not in breach of the Competition and Consumer Act 2010.
Whilst the number of consumers with private health insurance has increased, the ACCC has highlighted competition and transparency issues which still plague the sector.