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June 2010

Home » For Industry » Industry Statistics » Quarterly Statistics » June 2010

Quarterly Statistics

June 2010

Suggested citation: Private Health Insurance Administration Council, Quarterly Statistics June 2010, 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
44.6% of population at 30 June 2010
↑ 0.1% points from 31 March 2010
↑ 60,977 insured persons over the quarter
 
General treatment membership
51.6% of population at 30 June 2010
↑ 0.2% points from 31 March 2010
↑91,751 insured persons over the quarter
 

 

 

 
  
 

 

Hospital treatment episodes
↑6.6% over the 12 months to June 2010
↑6.8% over the quarter
 
General treatment services (ancillary)
↑5.0% over the 12 months to June 2010
↑4.2% over the quarter
 

 
 

 

Hospital treatment benefits
↑9.5% over the 12 months to June 2010
↑11.3% over the quarter

 
General treatment (ancillary) benefits
↑7.1%  over the 12 months to June 2010
↑6.1%  over the quarter
 

 
 

 

Hospital treatment out-of-pocket
$315.87
 
General treatment out-of-pocket
$48.36 

 
 

 

Premium revenue 
↑ 8.3% over the 12 months to June 2010
 
Profit before tax   
↑184.6% over the 12 months to June 2010 

contents

Membership and coverage

as at 30 June 2010
Hospital treatment 

 

At 30 June 2010, 9,973,864 people, or 44.6% of the population, were covered by hospital treatment cover. There was a 0.1 percentage point increase in the percentage of the population covered compared to the March 2010 quarter.
 
There was an increase in coverage of 60,977 insured people in the June 2010 quarter. Single policies rose by 22,431 and family policies by 19,443 during the quarter. This resulted in an overall increase of 41,874 hospital policies. For the 12 months to 30 June 2010, the number of insured people with hospital treatment cover has increased by 228,622 and 119,451 policies.
 
The most notable increase in coverage during the quarter was for people aged between 30 and 34. 
Notable decreases in coverage were seen for people aged 20 to 24.

 

 Lifetime health cover 

The majority of adults with hospital cover (88.2%) have a certified age of entry of 30, with no penalty loading. Despite this, the proportion of adults with hospital cover who pay a loading has continued to increase each quarter since the introduction of Lifetime Health Cover.

At the end of the June 2010 quarter, there were 853,630 people with a certified age of entry of more than 30 and subject to a Lifetime Health Cover loading; a net increase in people paying a penalty over the year of 97,426. There was a net increase in people with a certified age of entry of 30 (with no penalty) over the year of 74,202.

Net quarterly change in insured persons

 

 

Number of insured persons by age

 

Hospital treatment tables 

 contents

 General treatment 

 

At 30 June 2010, 11,541,701 people or 51.6% of the population had some form of general treatment cover. This resulted in a 0.2 percentage point increase (or an increase of 91,751 people) compared to the March 2010 quarter.
 
The increase in single policies was 33,314 and family policies increased by 28,170 during the quarter. The overall increase was 61,484 general treatment policies. For the 12 months to 30 June 2010, the number of insured persons with general treatment cover has increased by 342,957 and general treatment policies increased by 178,902.
 
The general treatment (ancillary) by age charts and data in this report contain data for those people that have general treatment policies only covering ancillary services. This includes dental treatment, however excludes those general treatment policies that do not cover ancillary treatment.
 
There was an increase of 92,420 people with general treatment (ancillary) coverage in the June 2010 quarter. The largest increase in coverage was for people in the 30 to 34 age group. There was a notable decrease in coverage in the 20 to 24 age group.

 

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

 

 

June  2010

$

Change from 
March 2010
%

Acute

1,978.92

1.0

Medical

55.50

2.6

Prostheses

793.11

-0.1

   Cardiac

5,977.91

1.4

   Hips

2,538.79

-1.5

   Knees

2,205.51

-0.6

   Lens

437.07

-1.6

Total benefits

 

 

Hospital

2,339,072,494

7.2

General

780,185,490

-2.7

 

 

During the June 2010 quarter, insurers paid $2,339 million in hospital treatment benefits, an increase of 7.2% compared to the March 2010 quarter. Hospital treatment benefits were comprised of:
  • $1,636 million for hospital services such as accommodation and nursing
  • $363 million for medical services
  • $338 million for prostheses items
  • $2.4 million for nursing home type patients.
The first chart displays total benefits paid for hospital treatment by age and gender. The age group for which most hospital benefits are paid is between 60 and 79. Total benefits by age group is affected by the benefits paid per person (displayed in the second chart) and the number of people in each age group. The older age groups have a higher claiming rate. The rise in benefits in the 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 $840.77 to $899.29. 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 30 June 2010

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

 

contents

 

General treatment  

   

 

June  2010

$

Change from 
March 2010
%

Dental

55.84

-2.3

Chiropractic

24.97

-2.5

Physiotherapy

28.57

-2.5

Optical

66.06

-1.6

 

During the June 2010 quarter, insurers paid $780 million in general treatment (ancillary) benefits. This was a decrease of 2.7% compared to the March 2010 quarter. Ancillary benefits for the June quarter included the major categories of:
  • Dental $402 million
  • Optical $127 million
  • Physiotherapy $65 million
  • Chiropractic $57 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 June 2010 were $295.29, increasing from $285.60 for the year to June 2009. The largest component of ancillary benefits is dental, for which $152.70 was paid per person.
 

General treatment benefits paid by age 12 months to 30 June 2010 (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 increased 10.3% during the quarter with the amount of benefits paid per service increasing by 2.6%.

 

The decrease in medical benefits per service was calculated over a range of medical services and does not mean medical services overall decreased in cost. The decrease in average benefits paid may reflect a change in the type of medical services utilised during the quarter. The medical service for which the greatest amount of benefits was paid was anaesthetics, comprising 24% of all medical benefits and totalling $87 million.

 

Medical benefits paid by speciality group

 

contents

 

Prostheses benefits 

Total benefits paid for prostheses increased 9.4% compared to the March quarter. Benefits paid per prosthetic decreased 0.1% 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 27% of all prosthetic benefits and totalling $93 million. The combined cardiac group comprised 15% of all prosthetics and totalled $49 million over the quarter.

Benefits paid for prostheses

 contents 

 

Service utilisation 

  

By Type

June  2010

 

Change from 
March  2010
%

Hosptal Episodes

826,597

5.0

Hospital Days

2,109,064

-2.5

Medical Services

6,535,370

7.5

Prostheses Items

426,387

9.6

   Cardiac

8,231

-10.4

   Hips

17,593

5.1

   Knees

21,891

5.6

   Lens

22,555

25.4

General Treatment Services

16,884,538

0.4

   Dental

7,200,380

0.9

   Chiropractic

2,292,032

-0.5

   Physiotherapy

2,290,024

5.8

   Optical

1,924,821

-13.3

  

During the June 2010 quarter, insurers paid benefits for 2.1 million days in hospital, arising from 826,597 hospital episodes of care.

The average length of stay was 2.6 days; a decrease of 7.1% compared to the March 2010 quarter.  

 

Hospital utilisation is distributed over four categories of hospital—public, private, day only facilities and hospital-substitute. During the June 2010 quarter, hospital episodes were distributed as follows:
  • public hospitals 118,116 episodes
  • private hospitals 583,271 episodes
  • day hospital facilities 121,518 episodes
  • hospital-substitute 3,692 episodes.
For the June 2010 quarter, hospital utilisation increased by 5.0% in episodes. Utilisation increased in all categories of hospital over the quarter and over the year.
 

 

 

Quarter change
%

 

Year change
%

public hospitals

↑

1.7

↑

 8.2

private hospitals

↑

5.2

↑

5.3

day hospital facilities

↑

7.4

↑

11.6

hospital-substitute

↑

0.3

↑

6.1

 Day-only episodes in the four categories of hospital totalled 528,456, an increase of 8.1% compared to the March 2010 quarter.

Hospital treatment services per 1,000 insured persons

 

 

General treatment services per 1,000 insured persons

contents  

 

Out-of-pocket payments 

   

By Type

June 2010

$

Change from 
March  2010
%

Change from  
June  2009
%

Hosptal treatment

315.87

0.7

5.0

Hospital-substitute treatment

3.29

-8.9

157.0

General treatment

48.36

0.8

0.6

Prostheses where gap was paid

29.82

-3.3

1.4

Medical gap where gap was paid

161.39

12.3

11.0

 

The average out-of-pocket (gap) payment for a hospital episode was $315.87 in the June 2010 quarter. This included out-of-pocket payments for medical services, some prostheses in addition to any excess or co payment amounts relating to hospital accommodation.

 The out-of-pocket payments for hospital episodes increased by 5.0% compared to the same quarter for the previous year.

Out-of-pocket payments for medical services were $161.39 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 $371.92, followed by orthopaedic with an average gap per service of $299.68. Gap incurred for the various medical services are displayed in the first chart. Medical gap also varies by state and territory and these differences are shown in the bottom chart.

 
 Medical benefits and out-of-pocket by speciality group

 

Proportion of services and average out-of-pocket payments

 

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Financial information

Financial performance 

   

All Figures $'000

12 months
to June
2010*

12 months to June 2009

Revenue

 

 

HIB premium revenue

14,169,573

13,078,133

Net HRB and other revenue

553,592

-8,759

Total revenue

14,723,165

13,069,374

Benefits

 

 

Fund benefits

12,087,361

11,203,083

State ambulance levies

159,606

146,029

Total fund benefits

12,246,967

11,349,113

Expenses

 

 

HIB expenses

1,023,598

1,046,616

HIB claims handling

272,721

264,436

Other expenses

28,462

4,576

Total expenses

1,324,780

1,315,629

Profit

 

 

Profit/(loss) before tax

1,151,418

404,632

Taxation expense

218,994

81,009

Profit/(loss) after tax

932,424

323,624

Non HBF related profit/(loss)

10,705

3,927

Profit/(loss) of the insurer

943,129

327,551

Margins

 

 

Gross margin

13.57%

13.22%

HIB expenses

9.15%

10.02%

Net margin

4.42%

3.20%

*June 2010 figures are unaudited  

The gross margin for the industry over the year to June 2010 was 13.6%, a marginal improvement from 13.2% for the previous year. Total revenue increased $1.65 billion whilst benefits increased by $898 million for the period. 
As a result of the improved gross margin and lower expenses, the industry reported a stronger net margin of 4.4% for the year to June 2010 (June 2009: 3.2%).

The financial market recovered strongly in the first three quarters of the 2010 financial year, bringing the industry’s investment income back to the positive territory. However in the fourth quarter, the investment markets experienced a downturn, thus dragging the industry’s investment income down to its lowest level since March 2009. Investment losses were reported by seven insurers in the June 2010 quarter. Looking forward, as the market is still experiencing significant volatility, the industry’s investment income is likely to remain subdued. 
 

Health benefits fund profit after tax breakdown for 12 months to 30 June 2010

contents 

 

Prudential position 

   

All Figures $'000

June

2010**

 

June

2009

Health benefits fund financial assets

 

 

Cash

578,444

543,671

Investments

    

Equities

732,949

621,486

Bonds & other fixed interest securities

5,514,227

4,846,005

Property

514,352

402,993

Subsidiary and associated entities

670,831

764,323

Loans

78,899

141,370

Premiums receivable

68,429

80,536

Intangibles DAC and FITBS

60,069

68,329

Prepayments

15,480

15,067

Other**

764,644

884,680

Total assets

8,998,323

8,368,461

Health insurance liabilities

    

Unearned premium liabilities

1,605,963

1,539,264

Unpresented & outstanding claims

1,386,162

1,412,954

Other fund liabilities

123,360

112,116

Interest bearing liabilities

29,599

25,921

Payables, provisions & other liabilities

653,179

559,611

Total liabilities

3,798,264

3,649,866

Health benefits fund capital

5,225,059

4,718,595

Solvency requirement

5,474,057

5,410,682

Capital adequacy requirement

5,767,539

5,669,010

*includes health insurance equipment and other assets  ** June 2010 figures are unaudited

 

As a result of the strong profitability over the 2010 financial year, the total capital held by private health insurers increased by 10.7% over the past 12 months to $5.23 billion.

All private health insurers remained compliant with the solvency and capital adequacy standards. As at 30 June 2010, the industry as a whole had $3.52 billion in excess of its solvency requirement, up from $2.96 billion as at 30 June 2009. 

 

Health benefits fund assets vs liabilities as at 30 June 2010