28 January 2015
Ms Jayde Richmond
Australian Competition and Consumer Commission GPO Box 520
MELBOURNE VIC 3001
By email to: firstname.lastname@example.org
Dear Ms Richmond
Re: ACCC report to the Australian Senate on private health insurance
The Royal Australian and New Zealand College of Psychiatrists (RANZCP) welcomes the opportunity to help inform the Australian Competition and Consumer Commission’s annual report to the Senate 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 out-of pocket medical and other expenses’.
The RANZCP is concerned about private health insurance funds’ continued failure to provide adequate communication with regards to helping inform consumers that many policies exclude psychiatric care and what the consequences of these exclusions are. Psychiatric cover is an important part of private health insurance as a way of protecting consumers and supporting the Australian health system. Those with mental illness are amongst the most vulnerable and disadvantaged in the Australian community and appropriate cover needs to be available, accessible and well defined for those who chose to take out private cover. If you would like to discuss any of the issues raised in the submission, please contact Rosie Forster, Senior Department Manager, Practice, Policy and Partnerships via email@example.com or by phone on (03) 9601 4918.
Dr Murray Patton President
309 La Trobe Street, Melbourne VIC 3000 Australia T +61 3 9640 0646 F +61 3 9642 5652
firstname.lastname@example.org www.ranzcp.org ABN 68 000 439 047
The Royal Australian & New Zealand College of Psychiatrists
Submission to the ACCC Report to the Senate on Private Health
The RANZCP welcomes the opportunity to respond to the Australian Competition and Consumer Commission (ACCC) in regards to its annual report to the Senate containing its assessment of ‘any anti-competitive or other practices by health funds or other providers which reduce the extent of health cover for consumers and increase their out-of-pocket medical or other expenses’. The RANZCP’s feedback is set out below.
Private health insurers and policies
1. What do you think are consumers’ experience in relation to accessing accurate and complete information about their existing policy or new policies? Please provide details.
2. Do you think consumers are experiencing difficulty understanding their policies, products and services? For example, understanding the extent and impact of inclusions and exclusions? If so, what steps are being taken or could be taken to improve consumer understanding?
Feedback that RANZCP Fellows receive from consumers of mental health services and admission nurses / administrators suggests that many patients have poor experiences in relation to accessing accurate and complete information about their private health
insurance policies. Consumers also experience difficulties with, and are not fully informed about, the extent of exclusions in their insurance coverage for psychiatric care.
In many cases, while mental health consumers have private health insurance, they are often surprised to learn that their insurance does not cover psychiatric admission when attending private mental health services. In such cases, when requiring admission, these patients are referred to the public system, which is already over-stretched.
Conversely, in cases where people have served the maximum two month waiting period for psychiatric services (including pre-existing conditions), some private health insurers misinform consumers that they do not have access to psychiatric cover. This occurs even when consumers insist that they have been advised by their clinicians that there is a government mandate that health funds cover them after the two month waiting period. Some private health insurance funds also do not make it clear to consumers what is not covered under their private health insurance policies in terms of psychiatric care. One common occurrence is that consumers are not informed that their policies exclude and will not pay for investigations such as pathology and radiology tests. This leads to situations where patients face an unexpected bill for these services when they arrive home. Additionally, some funds do not pay a full rebate for psychiatric readmissions within days of a previous admission and most people are not aware of this limitation. The RANZCP welcomes the willingness of private health insurers to fund day admission programs. This has assisted RANZCP Fellows in keeping patients out of hospitals and contributes to a treatment modality – group therapy - that would otherwise be unlikely to be available. The RANZCP would certainly encourage that funding to continue.
2However, there is consumer confusion about what kind of day programs and the number of sessions that are covered by private health insurance policies. Further, consumers are not always informed that they cannot access outreach and day programs simultaneously. Outreach is a service where a private mental health service sends a clinician to patients’ homes to monitor their mental state, assist in home-based therapies such as graded exposure therapy and link patients into community supports. Day programs are where a patient comes to a group program at the hospital but goes home at the end of the day. Both programs assist in patients’ transition from an admission back to their homes as well as keeping patients supported in the community. Many funds provide funding for both outreach and day programs at the same time but BUPA, for instance, does not cover both and this is not clear to mental health consumers.
Finally, some insurance funds do not explain to consumers that their psychiatric cover is capped. An example of this is that many consumers do not realise that their health fund only covers a limited number of electro-convulsive therapy (ECT) treatments per year. Recent examples provided by RANZCP Fellows include:
an 18 year old woman with psychotic depression who was told she could not have
more than one course of ECT per year at a time when the relevant psychiatrist was exploring using maintenance ECT treatment for her after a successful course of ECT treatment
a 30 year old man with severe Obsessive Compulsive Disorder and Obsessive
Compulsive Personality Disorder was denied an admission at a time he was suicidal because his health fund indicated that he had surpassed his number of psychiatric admission days permitted per annum. The RANZCP Fellow in question had to seek the support of the relevant private health insurance fund in order to get the man readmitted but this meant that the admission process was delayed by many days, taking up a great deal of unnecessary administrative time and causing the patient concerned undue stress.
Based on the above examples, the RANZCP believes that there is a clear need for better information and communication by private health insurance companies to consumers about whether they are covered for psychiatric care and the extent of inclusions and exclusions on their policies. This lack of communication leads to detrimental health and treatment outcomes for consumers who are seeking private psychiatric services.
3. Is there sufficient transparency and / or consistency regarding the features of private health insurance policies to enable consumers to make informed decisions and choice about their health care and be able to compare policies?
The RANZCP considers that there is insufficient transparency and consistency regarding the features of private health insurance policies for psychiatric care to enable consumers to make informed decisions about their health care. There is no one information source where a consumer can compare the different kinds of psychiatric private health insurance policies that might be available to them.
This problem is exacerbated given the reality that less than half of all policies on sale from the major insurers cover the cost of an admission to private psychiatric hospitals. Some insurers have also recently moved psychiatric treatment from full benefits to restricted benefits on some of their policies.
4. Do you have any suggestions for how information could be simplified or made more accessible to assist consumers to better understand the terms and conditions of policies?
The RANZCP believes that health insurance policies are becoming increasingly complex and that consumers have limited abilities to compare policies – especially in terms of psychiatric care. The RANZCP recommends that a review of health funds’ psychiatric cover be undertaken with a view to improving transparency and understanding.
In addition to improved transparency of products, public education is essential to ensure that consumers are well informed of what level of cover they may require. In the case of mental illness, this includes raising public awareness of the risk factors associated with mental illness and that that symptoms can onset at any age. The RANZCP would be pleased to assist in the development of educational tools for consumers, carers, psychiatrists and health fund providers in this area.
5. Any other issues you wish to raise? MBS items for case conferencing
The RANZCP notes that some private health insurance funds do not pay psychiatrists for Medicare Benefit Schedule Items 861 and 863. These items are discharge case
conferences where the psychiatrist meets with a multidisciplinary team and are essential to the safe and effective discharge of complex patients.
Despite this, Medibank Private for example does not rebate these items whereas Defence Health does pay for these meetings, leading the RANZCP to question whether Medibank Private is aware of the importance of such meetings.
Funding model for private health insurance of private hospital inpatient and day patient admissions
The RANZCP is also concerned about a ‘capitation’ model of private health insurance that exists only in South Australia where Ramsay Healthcare is the major provider of private psychiatric care and approximately half of private health insurance policies in South Australia are held with BUPA.
Under this model, BUPA and other health funds provide an amount to Ramsay Healthcare based on their members’ previous use over a given period. Ramsay
Healthcare can utilise the funding for whatever purpose it chooses so long as it does not request any further funding. This model is appealing for health insurers as they know exactly what their costs will be for a given period of time.
However, if someone living in South Australia with private health insurance wishes to access specialist interstate services such as Sydney’s South Pacific drug and alcohol clinic or Queensland’s Belmont Private Hospital, then because the health funds have already paid a set amount to Ramsay Healthcare, it is incumbent on Ramsay to cover any associated interstate costs. Feedback provided to the RANZCP suggests that – because of the ‘capitation’ model - South Australian consumers are informed that the services that they are seeking are provided in South Australia and coverage to fund interstate
4This means that South Australians with private health insurance cover for severe
psychiatric illness and who potentially require specialist care and treatment are often unable to use their policies in practice. What tends to happen is that private psychiatrists will inform South Australians seeking specialist psychiatric treatment that they will obtain better care in public psychiatric units, leading to fragmented and unsatisfactory health care for consumers in these situations with private health insurance policies.