The Australian private medical insurance sector treats 40 per cent of all the hospital admissions with tax incentives costing the nation’s government 7 per cent of its total healthcare spend.
Speaking at the Association of Medical Insurance Intermediaries (AMII) conference in London today, Ramsay Health Care UK CEO Mark Page said the mixed public/private approach adopted in his native Australia saw 60 per cent of elective surgery procedures and 60 per cent of cancer procedures undertaken in the private sector.
Australia has 47 per cent of its population holding PMI. It offers tax incentives for those who take it out, and penalties for those who do not, graduated by income and age. A single person under age 65 earning less than AUS$90,000 a year is entitled to a tax break of 27 per cent on PMI premiums, rising to 35.7 per cent for the over 70s. People earning more than AUS$90,000 pay a medicare levy surcharge of between 1 and 1.5 per cent if they do not have PMI.
PMI providers are required to publish reasons for their premium increases, which can be overruled by the government.
Page pointed out that in Australia there is no wait time guarantee, so people can wait 18 months to 2 years for certain procedures, driving some people to want to take out cover who might not do so in the UK, where there is an 18-week wait time guarantee.
Page said: “Around 7 per cent of total government healthcare spend is on private healthcare, yet it achieves these big numbers. I am not saying the Australian approach is the answer for the UK. But I do think these big numbers are food for thought. In Australia we have a carrot and stick approach – the carrot is the tax breaks and the stick is the surcharge if you do not take out cover.”