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Health care spending- private health insurance in perspective

Health care spending- private health insurance in perspective. Australian Health Insurance Association Conference, 2 November 2006. Authors: John Goss & Richard Webb Expenditure and Economics Unit Australian Institute of Health and Welfare. Disclaimer.

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Health care spending- private health insurance in perspective

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  1. Health care spending- private health insurance in perspective Australian Health Insurance Association Conference, 2 November 2006

  2. Authors:John Goss & Richard WebbExpenditure and Economics UnitAustralian Institute of Health and Welfare

  3. Disclaimer • The views expressed in this talk are the views of the authors and may not reflect the views of the Australian Institute of Health and Welfare or the Australian Government.

  4. Outline • The health industry • The private health insurance sector in relation to the health industry • Prospects for the private health insurance sector

  5. The health industry

  6. Ratio of health expenditure to GDP, 1960-61 to 2004-05 (%) Per cent 9.8%

  7. Health industry growth has been high • $8.1 billion dollar increase in last year • Real health expenditure growth in last 10 years of 69% –- 5.3% per year. • Real GDP growth - 3.7% per year.

  8. Hospitals are a very important sector • 7 million admitted patients in 2004-05 • 36% increase in last 9 years in admitted patients • 2 million non admitted patient occasions of service • $29 billion expenditure

  9. Medicare medical services • 113 million services in 1984-85 • 236 million services in 2004-05 • 109% increase • 65 million GP services in 1984-85 • 98 million GP services in 2004-05 • 51% increase

  10. Age-standardised death rates for major causes of death, 1922–2000

  11. Life expectancy changes from 1971 to 2002

  12. Expenditure on private health insurance and total recurrent health, constant prices, 1984-85 to 2004-05 $ billion

  13. Ratio of benefits paid by private health insurance to total recurrent health expenditure, 1984-85 to 2004-05 Per cent

  14. Proportion of the population covered by private health insurance, 1985–2005 %

  15. Annual real growth of expenditure on private health insurance and total recurrent health, 1984-85 to 2004-05 (%) Per cent

  16. Funding of recurrent health expenditure through private health insurance funds, by area of expenditure, current prices, 2004–05 Total funding: $8,670 million

  17. Gross and net funding of recurrent health expenditure through private health insurance funds, constant prices, 1994–95 to 2004–05 $ billion

  18. Expenditure on private hospitals $ billion 60.7% 62.8%

  19. Expenditure on public hospitals $ billion 5.1% 2.5%

  20. Expenditure on all hospitals $ billion 16.3% 12.5%

  21. Private health insurance funding of hospitals

  22. Proportion of population with hospital insurance

  23. Private health insurance funding of hospitals • On the basis of the 2.4 percentage points drop in membership share, one might expect a drop in private health insurance funding of hospitals of 2.4/45.4 which equals 5%

  24. Health expend per person by age & area of expenditure, 2000-01

  25. Private health insurance funding of hospitals • When hospital expenditure is weighted for age, the membership change between 2000-01 and 2004-05 would be expected to drop the proportion of hospital expenditure for the insured by only 1%. • The age pattern of membership change is a more important determinant of funding than the absolute membership change

  26. Expenditure on medical services $ billion 5.9% 0.0%

  27. Expenditure on dental services $ billion 21.1% 32.0%

  28. Expenditure on other health practitioners $ billion 21.5% 14.4%

  29. Expenditure on aids and appliances $ billion 10.4% 21.8%

  30. Expenditure on non-benefitpaid medications $ billion 2.0% 5.1%

  31. Expenditure on health administration $ billion 38.4% 37.2%

  32. Areas where private health insurance funding zero or minimal • Community health • Public health • Residential aged care

  33. Prospects for the future • Will private health insurance funding as a proportion of the total ebb and flow as it has in the last 20 years?

  34. Ratio of benefits paid by private health insurance to total recurrent health expenditure, 1984-85 to 2004-05 Per cent

  35. Prospects for the future • This depends on: • Membership changes, especially by age group • Which areas grow more rapidly • Which new areas (if any) open up for private health insurance

  36. Annual average increase in expenditure, 1994-95 to 2004-05, current prices

  37. Annual average increase in expenditure, 1994-95 to 2004-05, current prices

  38. Ratio of benefits paid by private health insurance to total recurrent health expenditure, 1984-85 to 2004-05 Per cent

  39. Which new areas might open up for private health insurance ?

  40. Future prospects ?

  41. Thank you

  42. Australian Institute of Health and Welfare • www.aihw.gov.au • Over 80 publications per year, available free online.

  43. Data sources • Health expenditure Australia 2004-05 (AIHW 2006) • AIHW health expenditure database • Private Health Insurance Administration Council • Australian Bureau of Statistics • Other

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