Implants lead health expense growth: HBF

Health fund HBF managing director Mike Gurry has highlighted the rising cost of medically implanted prostheses, which amounted to $52 million last year, as well as operations and doctors' fees in his annual report to members.

Mr Gurry said these were key elements of a a noticeable acceleration in health claims that impacted on the group's profitability in 2004-05 during which time total benefits paid increasied by 6.59 per cent on last years figures to $572 million.

Big returns on financial market investments represented about more than 80 per cent of the HBF surplus.

In October, the HBF Group has reported a surplus of $59 million last financial year, paying a record in health claims which contributed to the decrease in surplus from $73 million in the previous corresponding period.

Mr Gurry revealed the growth of operating theatre-related payouts by 8.4 per cent to $89 million with benefits paid to members to cover doctors fees rising 13 per cent to $60 million.

He highlighted a concern was the upsurge in benefits for medically implanted prostheses growing 17.5 per cent to $52 million.

Benefits and claims expense increased by $45.6 million from 2003-04 of which $37.9 million due to growth in the number and value of health services and $7.7 million for general insurance, including higher claims costs due to storms and the tsunami.

The continued strong performance in financial markets highlighted the increase in other revenue by $17.9 million to $47 million. An increase in salary, employee and other expenses of $5.4 million was as a result of the CPI based wage increases and increased marketing campaigns, which included the launch of a new Healthguard brand.

Below is an extract from an AMA release on September 22.

According to the Australian Medical Association, private health insurance funds are no longer required by legislation to provide 100% benefit cover (no gap) for all surgically implanted prostheses. This means patients may to have to pay a gap in some situations and it is vital doctors understand where this will occur so they can tell their patients. This new arrangement commenced from midnight on 30 October 2005 and applied to any prosthesis used in surgery from that time on. Clinical choice remains the paramount consideration.