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December 2009

Home » For Industry » Industry Statistics » Quarterly Statistics » December 2009

Quarterly Statistics

December 2009

Suggested citation: Private Health Insurance Administration Council, Quarterly Statistics December 2009, PHIAC, Canberra, 2010

Contents

Snapshot of the industry

Membership and coverage

  Hospital treatment
  General treatment

Benefits paid

  Hospital treatment
  General treatment
  Medical benefits
  Prostheses benefits

Service utilisation

Out-of-pocket payments

Financial information

  Financial performance
  Prudential position

 

Snapshot of the industry  

 

 
 

 

Hospital treatment membership
44.7% of population at 31 December 2009
↓0.02% points from 30 September 2009
↑ 45,238 insured persons over the quarter
 
General treatment membership
51.4% of population at 31 December 2009
No change in % coverage from 30 September 2009

5↑58,518 insured persons over the quarter

 

 

 

 
  
 

 

Hospital treatment episodes
↑ 5.0% over the12 months to December 2009
↑8.3% over the quarter
 
General treatment services (ancillary)
↑ 4.5% over the 12 months to December 2009
↑4.0% over the quarter

 

 
 

 

Hospital treatment benefits
↑ 10.2% over the 12 months to December 2009
↑ 9.6% over the quarter
 
General treatment (ancillary) benefits
↑ 6.6% over the 12 months to December 2009
↑ 5.8% over the quarter

 

 
 

 

Hospital treatment out-of-pocket
$305.82
 
General treatment out-of-pocket
$49.65

 

 
 

 

Premium revenue
↑ 7.7% over the 12 months to December 2009
 
Profit before tax
↑ 502.1% over the 12 months to December 2009

 

contents

 

Membership and coverage

as at 31 December 2009 
Hospital treatment 

 

At 31 December 2009, 9,866,201 persons, or 44.7% of the population, were covered by Hospital Treatment cover. The percentage of the population covered decreased 0.02 percentage points, compared to the September 2009 quarter.

 
ACT data was collected separately to NSW in December 2009, for the first time in PHIAC’s quarterly collection. The table below shows ACT has the highest coverage at 55.1% of the population.
 
There was an increase in coverage of 45,238 insured persons in the December 2009 quarter.
There was an increase of 9,046 single policies and an increase of 12,059 family policies during the quarter. There was a net increase of 21,105 hospital policies. Over the year, from
31 December 2008, the number of insured persons with hospital treatment cover has increased by 209,353 persons and 112,734 policies.
 
The most notable increase in coverage during the quarter was for people aged between 60 and 74. Increases in the older age groups are partly due to ageing of the insured population with people moving from younger to older age cohorts but there are also growing proportions of insured persons in these age groups. There was also a notable increase for people aged 20 to 24. Decreases in coverage were seen for people aged 10 to 14, 30 to 34 and 45 to 49.

  

Lifetime health cover 

The majority of adults with hospital cover (88.8%) have a certified age of entry of 30, with no penalty loading. However, the proportion of adults with hospital cover paying a loading has increased every quarter since the introduction of Lifetime Health Cover.

At the end of the December 2009 quarter, there were 799,758 persons with a certified age of entry of more than 30 and subject to Lifetime Health Cover loading; a net increase in persons paying a penalty over the year of 88,212. There was a net increase in persons with a certified age of entry of 30 (with no penalty) over the year of 69,124.

  

Net quarterly change in insured persons

 

 

Number of insured persons by age

 

Hospital treatment tables 

 contents

 

General treatment 

 

At 31 December 2009, 11,362,705 persons or 51.4% of the population had some form of General Treatment cover. There was no change in the percent of the population covered compared to the September 2009 quarter. ACT is included for the first time in this quarterly publication and the table below shows that ACT has the highest proportion of the population with General Treatment cover, 63.7%.

 
There was an increase in coverage of 58,518 insured persons in the December 2009 quarter. There was an increase of 11,682 single policies and an increase of 15,678 family policies during the quarter. There was a net increase of 27,360 general treatment policies. Over the year, to 31 December, the number of insured persons with general treatment cover has increased by 331,210 persons and 174,065 policies.
 
The General Treatment (ancillary) by age charts and data in this report show persons that have general treatment policies that cover ancillary services such as dental treatment, and excludes those General Treatment policies that do not cover ancillary treatment.
 
There was an increase in coverage of 66,138 persons with General Treatment ancillary coverage in the December 2009 quarter. The largest increases in coverage, 10,715 persons, was for people in the 60-64 age cohort.

 

Net quarterly change in insured persons (ancillary)

Number of insured persons by age (ancillary)

General treatment tables

  

 

Includes all general treatment persons              

Includes only general treatment persons with
ancillary coverage

 Includes all general treatment persons

contents

 

Benefits paid 

Hospital treatment   
Benefits per episode/service

 

 

December 2009

$

Change from 
September 2009
%

Acute

1,924.35

0.7

Medical

56.38

3.8

Prostheses

768.79

-0.7

   Cardiac

5,854.00

1.3

   Hips

2,565.19

-1.6

   Knees

2,214.53

-0.3

   Lens

432.97

0.8

Total benefits

 

 

Hospital

2,217,960,266

-0.7

General

726,320,782

-0.6

 

During the December 2009 quarter, insurers paid $2,218 million in hospital treatment benefits, a decrease of 0.7% compared to the September 2009 quarter. Hospital treatment benefits were comprised of:

  • $1,552 million for hospital services such as accommodation and nursing
  • $355 million for medical services
  • $310 million for prostheses items.
Benefits paid for hospital treatment by age and gender (top chart) show the total benefits paid in each age group. The age group for which most hospital benefits are paid is between 60 and 79. The benefits per person (middle chart) are affected by the age of the person and the number of persons in each age group. The older age groups have a higher claiming rate. The rise in benefits in 20–39 age cohorts is due to increases in female benefits associated with child bearing.

Hospital treatment benefits per person during the year increased from $808.28 to $871.67. The largest amount of benefits per person was spent on hospital accommodation and nursing, followed by medical and prostheses benefits. 

 

Hospital treatment benefits paid by age 12 months to 31 December 2009

Hospital treatment benefits per person and percentage of benefits paid by age cohort 
 
 
Hospital treatment benefits per person

 

contents

 

General treatment  

 

 

December 2009

$

Change from 
September 2009
%

Dental

54.85

2.0

Chiropractic

23.08

-3.0

Physiotherapy

27.40

-1.4

Optical

62.81

-2.5

 

During the December 2009 quarter, insurers paid $726 million in general treatment (ancillary) benefits. This was a decrease of 0.6% compared to the September 2009 quarter. Ancillary benefits for the September quarter included the major categories of:

  • Dental $378 milion
  • Optical $134 million
  • Physiotherapy $54 million
  • Chiropractic $46 million.
There is a marked difference between the distribution of benefits over age groups between hospital benefits and ancillary benefits. The major difference is the higher claiming rate in older age groups for hospital benefits while benefits per person for ancillary benefits are more evenly spread over the age groups.

 

General treatment ancillary benefits per person during the year to December 2009 were $289.44, increasing from $256.94 in the year to December 2009. The largest component of ancillary benefits is dental for which $149.47 was paid per person during the year to December 2009.

 

General treatment benefits paid by age 12 months to 31 December 2009 (ancillary)

 

General treatment benefits per person and percentage of benefits paid by age cohort (ancillary)

General Treatment benefits per person (ancillary)

contents

 

Medical Benefits 

 

Total benefits for medical services decreased 1.7% during the quarter and the number of medical services in the quarter decreased by 5.3%. Benefits paid on average for the medical services increased 3.8% during the quarter.

The increase in medical benefits per service was calculated over a range of medical services and does not mean medical services overall increased in cost. The increase in benefits paid may reflect a change in the type of medical services utilised, or a change in the overall utilisation of medical services. The medical service for which the greatest amount of benefits was paid was anaesthetics, comprising 24.5% of all medical benefits and totalling $87 million.

 
Medical benefits paid by speciality group

 

contents

 

Prostheses benefits 

 

Total benefits paid for prostheses over the quarter decreased 1.3%, compared to the September quarter. Benefits paid per prosthetic decreased 0.7% per item during the quarter. Similar to medical services, the change in benefits paid for prostheses was calculated over a range of prosthetics (see chart) and does not mean prostheses overall changed in cost. The change in benefits paid may reflect a change in the type of prosthetics utilised, or a change in the overall utilisation of prosthetics. The prosthetic groups for which the greatest amount of benefits were paid were "hips" and "knees", comprising 29.5% of all prosthetic benefits and totalling $91 million. The combined cardiac group comprised 16.5% of all prosthetics and totalled $51 million over the quarter. 

 

Benefits paid for prostheses

 

contents 

 

Service utilisation 

 

By Type

December 2009

$

Change from 
September  2009
%

Hosptal Episodes

806,313

-1.1

Hospital Days

2,095,645

-3.7

Medical Services

6,292,122

-5.3

Prostheses Items

402,825

-0.6

   Cardiac

8,728

-26.1

   Hips

17,419

0.1

   Knees

21,021

0.4

   Lens

27,782

9.2

General Treatment Services

15,938,089

-2.2

   Dental

6,882,558

-3.6

   Chiropractic

2,004,325

-8.7

   Physiotherapy

1,955,690

-9.1

   Optical

2,131,711

20.5

 

 

During the December 2009 quarter, insurers paid benefits for 2.1 million days in hospital, arising from 806,313 hospital episodes of care.

The average length of stay was 2.6 days; a decrease of 2.7% compared to the September 2009 quarter. The utilisation rates for hospital episodes, medical services and prostheses services decreased during the quarter, possibly reflecting a seasonal lessening in activity around the end of the year rather than a change in general upward trend. 

 

Hospital utilisation is distributed over four categories of hospital: public, private, day only facilities and hospital-substitute. During the December 2009 quarter hospital episodes were distributed as follows:
  • public hospitals 115,868 episodes
  • private hospitals 570,471 episodes
  • day hospital facilities 116,915 episodes
  • hospital-substitute 3,059 episodes.
 Between the September 2009 and December 2009 quarters, hospital utilisation decreased in all categories of hospital. These decreases are likely to be seasonal, with increases in utilisation in all categories over the year from December 2008 to December 2009 (shown in the table below).

 

 

 

 

Quarter change
%

 

Year change
%

public hospitals

↓

-0.6

↑

 6.6

private hospitals

↓

-1.1

↑

4.5

day hospital facilities

↓

-1.5

↑

5.8

hospital-substitute

↓

-7.0

↑

8.7

 

Day-only episodes in the four categories of hospital totaled 508,275, a decrease of 0.7% compared to the September 2009 quarter. 

 

Hospital treatment services per 1,000 insured persons

 

 

General treatment services per 1,000 insured persons

contents  

 

Out-of-pocket payments 

 

By Type

December 2009

$

Change from 
September  2009
%

Change from  
December  2008
%

Hosptal treatment

305.82

1.6

4.4

Hospital-substitute treatment

21.99

66.4

113.3

General treatment

49.65

2.1

1.2

Prostheses where gap was paid

29.55

-13.2

-4.3

Medical gap where gap was paid

146.52

4.3

-1.5

 

The average out of pocket (gap) payment for a hospital episode was $305.82 in the December 2009 quarter and included out-of-pocket payments for medical services and some prostheses as well as any excess or co payment amounts relating to hospital accommodation.

The out of pocket payments for hospital episodes increased by 4.4% compared to the same quarter for the previous year. Out of pocket payments for medical services were $146.52 where an out of pocket payment was payable. The amount of gap for medical services varies depending on the specialty group. The specialty group with the largest out of pocket payment was plastic/reconstructive with an average gap of $363.27, followed by orthopaedic with an average gap per service of $276.59.  Plastic/reconstructive medical services incurred the largest gap as a percent of the fee. The chart below shows that for the December 2009 quarter, ACT was the state with the highest average gap payment, followed by NSW. ACT is reported for the first time this quarter.

 

  

Medical benefits and out-of-pocket by speciality group

 

Proportion of services and average out-of-pocket payments

 

contents  

Financial information

Financial performance 

 

All Figures $'000

12 months
to December
2009*

12 months to December 2008

Revenue

 

 

HIB premium revenue

13,633,203

12,655,191

Net HRB and other revenue

544,055

-234,387

Total revenue

14,177,259

12,420,804

Benefits

 

 

Fund benefits

11,691,041

10,747,839

State ambulance levies

151,071

142,526

Total fund benefits

11,842,112

10,890,365

Expenses

 

 

HIB expenses

995,103

1,091,271

HIB claims handling

263,094

257,659

Other expenses

7,405

3,874

Total expenses

1,265,602

1,352,805

Profit

 

 

Profit/(loss) before tax

1,069,544

177,634

Taxation expense

156,877

90,801

Profit/(loss) after tax

912,667

86,833

Non HBF related profit/(loss)

3,532

-391

Profit/(loss) of the insurer

916,199

86,442

Margins

 

 

Gross margin

13.14%

13.95%

HIB expenses

9.23%

10.66%

Net margin

3.91%

3.29%

   

Premium revenue for the 12 months to 31 December 2009 was up by 7.7%, equivalent to an increase of $978 million, compared to the prior 12 months. Total benefits for the same period were up by 8.7% or $952 million. As the percentage growth in benefits was greater than the growth in premium revenue, the gross margin for the 12 months to 31 December 2009 was slightly reduced to 13.14%, down from 13.95% for the 12 months to 31 December 2008.
With the impact of the costs associated with mergers and registrations diminishing, management expenses were lower in the 2009 calendar year, resulting in an improvement to the underwriting net margin of 3.91%, up from 3.29% in 2008. Stronger investment returns in the past 12 months, particularly in the last three quarters, have largely negated the losses incurred by the industry stemming from the Global Financial Crisis. Overall, profit after tax was $913 million for the 12 months to 31 December 2009, significantly higher than the $87 million recorded in 2008.

 

Health benefits fund profit after tax breakdown for 12 months to 31 December 2009

contents 

 

Prudential position 

 

All Figures $'000

December

2009

 

 December 2008

Health benefits fund financial assets

 

 

Cash

340,808

1,515,830

Investments

    

Equities

790,583

791,751

Bonds & other fixed interest securities

5,195,550

3,514,052

Property

405,697

432,977

Subsidiary and associated entities

671,621

863,341

Loans

88,691

73,740

Premiums receivable

76,189

87,922

Intangibles DAC and FITBS

64,579

79,724

Prepayments

23,153

26,070

Other**

778,444

787,332

Total assets

8,435,313

8,172,739

Health insurance liabilities

    

Unearned premium liabilities

1,389,343

1,324,711

Unpresented & outstanding claims

1,399,227

1,325,105

Other fund liabilities

123,028

117,837

Interest bearing liabilities

27,428

29,367

Payables, provisions & other liabilities

471,239

430,446

Total liabilities

3,410,266

3,227,467

Health benefits fund capital

5,050,048

4,970,273

Solvency requirement

5,045,270

5,169,790

Capital adequacy requirement

5,310,709

5,527,221

**includes health insurance equipment and other assets

 

 Total assets increased by $263 million in the past 12 months. With confidence regaining in the investment market, private health insurers have gradually decreased their cash holdings and increased their investments in bonds and other fixed interest securities.

Liabilities also rose over the same period by $183 million, mainly due to increases in the unearned premium liabilities and unpresented and outstanding claims—consistent with industry growth. As a result, the industry’s total capital was $5.05 billion as at 31 December 2009.
All private health insurers remained compliant with the Capital Adequacy Requirements. As at 31 December 2009, the industry as a whole had $3.12 billion in assets in excess of its capital requirement, up from $2.65 billion as at 31 December 2008.

 

Health benefits fund assets vs liabilities as at 31 December 2009