Does ‘Not-for-Profit’ mean more focus on health?
July 2014
Melanie Kiely
Health Insurance Summit
28th July 2014
Healthcare cost is rising…
2Source:
ABS Demographic Stats Jun-13
AIHW Data Table 2014
5
6
7
8
9
10
19
86
-87
19
87
-88
19
88
-89
19
89
-90
19
90
-91
19
91
-92
19
92
-93
19
93
-94
19
94
-95
19
95
-96
19
96
-97
19
97
-98
19
98
-99
19
99
-00
20
00
-01
20
01
-02
20
02
-03
20
03
-04
20
04
-05
20
05
-06
20
06
-07
20
07
-08
20
08
-09
20
09
-10
20
10
-11
20
11
-12
% Health expenditure to GDP ratio (per cent)
Health expenditure as a % of GDP is
climbing, with increasing rates of
hospital admissions and increases in
costs per case-mix.
Why Peter Dutton is anxious
3
Private health insurance market is big
4
NFP32%
FP68%
NFP vs FP Market ShareMar-14
Type of Fund Members
NFP 4.2M
FP 8.5M
Total 12.7M
% of Population 55%Source:
PHIAC data;
ABS Population data
Currently more than half of the
population are PHI members
Not-for-profit pays more back in total benefits …
5Source: PHIAC data
$2,286
$2,402 $2,523$2,674
$2,168$2,251
$2,365$2,497
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2009/10 2010/11 2011/12 2012/13
Total Benefits per Policy
Not-for-Profit For-Profit
• Benefits paid per policy
is higher for NFP
• Could it be that NFP are
less efficient in achieving
better health outcomes?
… but for-profit funds are paying more for prosthesis
6Source: PHIAC data
$61.5
$56.6
$54.0
$56.0
$58.0
$60.0
$62.0
Medical Benefits per Service
Medical Benefits per Service
Not-for-profit For-profit
$752.7
$771.6
$740.0
$750.0
$760.0
$770.0
$780.0
Prosthesis Benefits per Service
Prosthesis Benefits per Service
Not-for-profit For-profit
• NFP funds are paying more
benefits back to members in
medical benefit
• On the other hand, FP funds are
paying more back in prosthesis
Increasing coverage for Chronic Disease Management Program
7
0M
2M
4M
6M
8M
10M
12M
Jun
-07
No
v-07
Ap
r-08
Sep
-08
Feb
-09
Jul-
09
Dec
-09
May
-10
Oct
-10
Mar
-11
Au
g-11
Jan
-12
Jun
-12
No
v-12
Ap
r-13
Sep
-13
Feb
-14
Persons Covered for CDMP since 2007
Source: PHIAC data
• Introduced in 2007, not
mandatory
• Coverage increased
significantly
• Almost all members are
covered now
Not-for-profit funds are paying more benefits in CDMP
8
$1,178
$531
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Benefits per Program
CDMP Benefits per Program
Not-for-Profit For-Profit
Source: PHIAC data
• Are NFP funds providing more
than necessary?
• Or are FP funds not providing
enough to their members?
The COACH Program works!
Studies found COACH Program:
• Reduces coronary risk factorlevels.
• Reduces hospital admissionby 16%, bed-days by 20%within 4 years.
9Source:
The COACH Program
People are dying from chronic diseases
10Source: AIHW Data Table 2014
0
50
100
150
200
250
300
350
197
9
198
0
198
1
198
2
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
Dea
ths
per
100
,000
Po
pu
lati
on
Chronic Disease Deaths per 100,000 Population, 1979 - 2011
Coronary heart disease Cerebrovascular disease Diabetes Cancers COPD Other chronic diseases
Perhaps we should also put some focus on chronic diseases other than heart disease
Re-admission cost is on the rise
11Source: AIHW Health Expenditure Australia 2011-12
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2001
–02
2002
–03
2003
–04
2004
–05
2005
–06
2006
–07
2007
–08
2008
–09
2009
–10
2010
–11
2011
–12
Total Recurrent Healthcare Expenditure
$5,711 $5,849 $5,916 $5,758 $6,258 $5,823
$8,512
$5,881
$0
$2,000
$4,000
$6,000
$8,000
$10,000
NSW VIC Qld WA SA Tas NT Aust
Average recurrent health expenditure per person ($)
• Recurrent expenditure is onthe rise
• Averaging $5.8K in recurrenthealth cost per person
Majority of claims were from a small portion of members
12
In 2013
76% of hospital benefits
5% of members
HBFMembers
HBFHospital Claims
For example:
• $283K on one cancer patient over 5 years
• $494K on one psych patient over 5 years
Integrated Care – The Holy Grail?
13Source:
Transforming Your Care – A review of health and social care in Northern Ireland
http://www.dhsspsni.gov.uk/index/tyc/tyc-timeline.htm
Currently is fragmented:
• Lack of coordination
• Lack of compliance
• Patient re-admissions
14
Early prevention and lifestyle management could be the key
15
16
• What is the shareholder’s ROIexpectations on returns andtimeframe?
• Will Medibank Private continueexisting programs, or cut them outand do nothing like nib?• Focus on better return from
programmes• Shareholder vs member focus
What are the implications of Medibank listing, and further profit drivers?
17
“The aim of medicine is to prevent disease andprolong life, the ideal of medicine is to eliminatethe need of a physician”
– William James Mayo
18
Top Related