“THE POWER OF COLLECTIVE ACTIVISM”

Dr Michael Armitage CEO Private Healthcare Australia “THE POWER OF COLLECTIVE ACTIVISM”

Australian Health System

Australian Health System CONSUMERS PROVIDERS PHI GOVERNMENT FUNDERS

Benefits of Private Involvement Productivity Commission Report: • Private Sector shorter waiting time • Private sector higher labour productivity • Private sector safer infection control • Private sector lower general/capital cost • Private sector can help control costs and improve health outcomes

August 2014 PARLIAMENTARY BRIEFING PACK

Political Sensitivity of the Rebate 2009 research by ANOP Research Services found: • 36% of Labor voters in Labor marginal seats would change their vote if they believed their Rebate was at risk • 75% of Labor voters rated the Rebate as either extremely important or very important personally

Private Health Insurance – Not Just For the Rich • 3.4 million people with private health insurance live in households with incomes less than $35,000 per annum • 5.6 million people with private health insurance cover resided in households that had gross annual incomes below $50,000 (Source: Australian Taxation Office & Australian Bureau of Statistics)

Private Sector ContributionData Source: Australian Institute of Health and Welfare 2012 81% Mental health treatment, sameday Other Knee Procedures 78% Complex Middle Ear Infection 72% Lens procedures 71% Other major joint replacement & limb reattachment 64% Cancer Therapy (Chemotherapy) 60% Major procedures for malignant breast conditions 55% Hip Replacements 57%

Total Hip and Knee replacement prostheses with a higher than anticipated revision rate for joints utilised in 2013 Data Source: NJRR. Identified by a standardised algorithm as having a higher than anticipated revision rate when compared to other devices in the same class

Collective Activism: Private Health Funds & Hospitals • Procedure Banding • Code of Conduct • Direct Political Lobbying

Procedure Banding • Managed by the National Procedure Banding Committee\ • The committee recommends individual MBS items to be categorised into bands • Bands are calculated from direct costs only, e.g. staffing, average theatre time, consumables, capital costs, anaesthetic costs • The findings of the NPBC are recommendations only • DRG payment models slowly taking over from Banding

Examples • 32090 (Band 2 –$276 to $342 )Fibreoptic Colonoscopy • 42702 (Band 6 - $641 to 769) Lens extraction and insertion of intraocular lens • 38306 (Band 13 - $3574+) Transluminal insertion of stent or stents

Code of Conduct This is a voluntary industry Code, developed to enhance the relationship between health funds and consumers. Funds which are signatories to the Code agree to: • improve the standards of practice and service • provide information to consumers in plain language • promote better informed decisions about their products and services • ensure information is protected in accordance with privacy principles • provide information to consumers on their rights and obligations • provide consumers with easy access to the fund’s internal dispute resolution procedures

Code of Conduct (cont.) The code specifically enforces compliance against the following criteria: • Dispute resolution procedures in relation to the code (internal and external disputes) • Employees (training and conduct of employees) • Intermediaries (training and responsibilities of intermediaries) • Policy Documentation (clear and complete documentation, detrimental changes to policies, changes to hospital contracting arrangements, pre-existing conditions, cooling off period and transfer certificates) • Privacy • The Code Compliance Committee monitors regularly against these criteria

Code of Conduct (cont.) Sanctions: The Code Compliance Committee can enforce the following sanctions if a breach of the code is found: • Rectification steps • Compliance audit • Cease use of logo • Extreme cases, corrective advertising • Annual report

Code of Conduct Benefits Self regulation of the industries conduct has resulted in higher customer satisfaction leading to fewer complaints to the Private Health Insurance Ombudsman. In fact Level 3 complaints have steadily decreased since the inception of the Code of Conduct:

ELECTION CAMPAIGN 2013

“The calm lie in wait for the disorderly”Sun Tzu, The Art of War

Political Challenge • May 2009, the Australian Labor Party Government announced it would means-test the Rebate in three tiers • After continued lobbying of MPs by PHA: August 25 2013, Opposition Leader Tony Abbott: “Within a decade…the private health insurance rebate will be restored.”

The Election Challenge • Commitment to restoring the PHI Rebate • Strong position, good relationships • Electorate based activity influential • Advertising low key & targeted • Make everything count!

PHA Campaign • Private Healthcare Australia collected data to measure impact on the Industry • Monthly membership survey - hospital and general treatment products • Focus on ensuring Members of Parliament and Candidates understand that it is in their electoral interest to overturn legislation to means-test the Rebate

PHA Activities Parliamentarians (candidates) briefings • Target specific electorates • Signed letters to voters / householders • Letter boxing of flyers Advertising/Media • Major metropolitan papers • Campaigning in electorates • Electronic – youshouldknow.com.au Stakeholder engagement • General Treatment providers, RACS, Hospitals, consumer groups

Support for Industry “Within a decade…the private health insurance rebate will be restored.” Tony Abbott, 25 August 2013 “Now we can't reverse them overnight. We're being honest about it. We can't reverse that overnight, but I think it is right and proper that Tony Abbott give the vision, give the direction that we want to head so that we can have a viable private health insurance system…” Joe Hockey, 29 August 2013

Electorate letters repeated in The Australian during the week leading up to Election Day!

Mailing Campaign Election Results – Marginal Seats

THANK YOU

“THE POWER OF COLLECTIVE ACTIVISM”