The Australian Competition and Consumer Commission has raised a number of concerns about the private health sector in its Report to the Senate on anti-competitive and other practices by health funds and providers in relation to private health insurance*, tabled today.
"The report outlines the ACCC's extensive activities, including court action, in relation to the private health sector during 18 months", ACCC Chairman, Mr Graeme Samuel, said.
The concerns include:
Unilateral variation of premium rates or benefits
"It appears that health funds are changing their premium rates or benefits available even though consumers have paid up to 12 months in advance", Mr Samuel said. "The ACCC is concerned that this means health fund members may not be getting what they have paid for.
"This behaviour may breach the Trade Practices Act 1974. For example, if a health fund changed its premium rates or benefits after telling members that they would not change, it may be engaging in misleading or deceptive conduct".
Health funds should make sure that they explain any changes accurately and simply, and they should provide their members with sufficient notice of any upcoming changes. The ACCC continues to monitor this situation closely for any potential breaches.
Patient election process
Patients can elect to be treated as either public or private patients when they are admitted to hospital. Some industry participants suggested that some public hospital staff were misusing this process to encourage people to elect to be treated as a private patient.
"It is imperative that patients be treated fairly and provided with full information when they are being admitted to hospital. They should not be pressured or misled, particularly given that at the time of admission they may be in pain or distressed. Governments and public hospitals need to take steps to maintain the integrity of the patient election process".
No-gap schemes
Concerns were put to the ACCC about the behaviour of some medical practitioners, who appear to be charging so-called 'booking' or 'administration' fees that are outside the scope of gap cover schemes.
"This practice effectively frustrates gap-cover schemes, leaving patients with unexpected out-of-pocket expenses. It is a major concern from a consumer perspective".
Credentialing at hospitals
"The ACCC remains concerned by allegations that groups of competing doctors are apparently acting together to deny accreditation to other doctors who wish to practice at a particular hospital. The ACCC will continue to examine the complaints it receives on this issue".
Negotiations between health funds and hospitals
Both health funds and hospitals complained to the ACCC about delays in the negotiation of agreements about the price payable by health funds to hospitals for an episode of care.
"The ACCC would be concerned if one party sought to prolong these negotiations in order to ensure that the terms of the old agreement continue after it has expired. One possible solution to this problem would be to backdate the new agreement so that its terms were effective from that date of expiry of the previous agreement".
Prostheses regulation
There is some concern that the high cost of providing prostheses on a no-gap basis, following the deregulation of the industry, may cause premiums to rise.
"The ACCC notes that the Government has asked the sector to develop measures to address this emerging issue and that this is occurring in collaboration with the Department of Health and Ageing. The ACCC will continue to monitor competition implications of the proposed response".
Copies of this report are available from the ACCC website or by calling Ms Kathryn Kerr on (02) 6243 1050 .
* By a Senate order issued on 25 March 1999 and amended on 18 September 2002, the ACCC is required to provide a report at the end of each financial year "containing an assessment of any anti-competitive or other practices by health funds or providers which reduce the extent of health cover for consumers and increase their risk of out-of-pocket and other medical expenses".
This report is the fifth prepared by the ACCC in compliance with the Senate order. It covers the period from 1 January 2002 to 30 June 2003 and was tabled in the Senate yesterday.