Despite "massive challenges" HCF delivers lowest premium increase for 20 years

“Yes, absolutely. What I would say is common to health everywhere, globally, within Australia, public, private and listed not-for-profits is the reality of the growing cost of healthcare and the growing utilization,” she said.

There are more health services available and many new technologies and treatments, said Jack, but there are also aging populations and increasing chronic disease.

“So these are all massive challenges for health systems everywhere about how we balance up the increasing underlying costs,” she explained.

HCF’s broker partners have an important role to play articulating these issues to customers in the health sector.

“The thing I would say about brokers is that a lot of people buy through brokers, so consumers obviously do value having another party help provide some additional information for them and help make the selection a bit easier,” said Jack.

The HCF announcement coincided with a similar declaration by Teachers Health Group, another not-for-profit private health provider. Teachers Health announced a premium increase of 2.17%, one of the lowest average premium increases across the insurance industry in 20 years.

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The small increases were possible partly due to COVID-19 induced slowdowns in some areas of healthcare.

“There’s actually a price element to what happens with premiums and there’s also a volume element,” Jack explained. “So, while most activity continued and we still paid out in this last financial year $2.8 billion worth of claims, there were areas where it was softer.”

However, Jack said, the idea that during the last two years the health system has been generally less busy apart from dealing with COVID related health issues is not true.

“It’s grossly exaggerated is the short answer and the explanation is that sure, there were some surgeries and some procedures cancelled or deferred but the amount we spent on claims in the 2020 financial year was about the same as in 2019 and FY21 we were actually up 16% on financial year 20,” she said.

Jack said many healthcare issues won’t wait for a pandemic to pass.

“There’s an awful lot of healthcare that is time critical. So, babies don’t wait for us to be out of a lockdown, or, if you’ve got cancer, or mental health issues, or a cardiac issue,” she said.

Over the last year HCF has seen demand for many services go up dramatically.

“Births were actually up 20% and psych admissions were up 18% on the last year. So a huge amount of hospital services still have to continue,” said Jack.

Emergency healthcare continued and so did other time sensitive treatments, including eye care support and physiotherapy services.

“Then there was a big shift to people being creative and finding other ways to deliver services as well,” she said.

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Jack said well before COVID hit in early 2020, HCF was already providing a considerable amount of telehealth and in-home services. However, when the pandemic struck, HCF ramped it all up.

“So, we’ve had quite a significant change in the way providers are interacting with us, for example, physios moving to an online consultation. Also, the way we provide additional mental health support and things like pain management,” she said.

Australia’s general population, said Jack, is more concerned about their health because of the pandemic.

“Yes I think that’s exactly right,” she said. “We had a number of years where participation in private health insurance declined and I think there was a level of complacency. Clearly, the pandemic is a health crisis so it’s really got people thinking about the importance of health in their lives.”

According to HCF, membership increased by 5.3% in 2020/21. At the same time, HCF paid out $2.8 billion in members’ health claims, including for more than 600,000 hospital admissions and nearly five and a half million medical services.

Despite the challenges ahead, Jack said HCF is committed to keeping healthcare affordable and understandable for its members.

“Every decision we make is focused around what is in the best interest of all of our members and making sure we look at the whole membership base holistically,” she said.