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 noticeable acceleration in health claims that affected the group’s profitability in 2004-05, during which time total benefits paid increased by 6.59 per cent on the previous year, to $572 million. Medically implanted prostheses represent almost any piece of equipment placed inside the body, from joint replacements and heart pacemakers to mesh pipes known as stents used in cardiac surgery. The upsurge in benefits for these increasingly complicated, varied, specialist and expensive products of modern medical technology was 17.5 per cent on the previous year. HBF said that the cost in this one area had ballooned from $20 million four years ago. Mr Gurry said drug-coated stents could cost $3,500 each, pacemakers $10,000 and defibrillators $45,000. The use of these was fuelled by the increased availability of specialist cardiothoracic examination techniques such as angiograms, angioplasties and advanced investigative procedures. In addition, operating theatre-related payouts grew by 8.4 per cent to $89 million with benefits paid to members to cover doctors’ fees rising 13 per cent to $60 million. HBF pointed out that it was well ahead of the national average in terms of covering the gap members had to pay for various services. Mr Gurry said the fund’s Gap Saver product had proved popular, enjoying 40 per cent growth. 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. Overall, 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. Big returns on financial market investments represented more than 80 per cent of the HBF surplus. 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.