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March 2009

Quarterly Statistics

March 2009 

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

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% at 31 March 2009 ↑ 0.0 percentage points over the quarter ↑ 45,269 insured persons over the quarter   General treatment membership 51.3% at 31 March 2009 ↑ 0.3 percentage points over the quarter  ↑ 109,158 insured persons over the quarter
	Hospital treatment episodes ↑ 10.1% over the 12 months to March 2009 ↑ 9.3% over the quarter   ↑ 8.0% over the 12 months to March 2009 ↑ 7.0% over the quarter
	Hospital treatment benefits ↑ 12.8% over the 12 months to March 2009 ↑ 15.9% over the quarter   General treatment benefits ↑ 11.1% over the 12 months to March 2009 ↑ 10.1% over the quarter
	Hospital treatment out-of-pocket $306.05   General treatment out-of-pocket $48.37
	Premium revenue ↑ 8.0%   Profit before tax ↓76.8%

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Membership and coverage

as at 31 March 2009 

Hospital treatment

At 31 March 2009, 9,702,117 persons, or 44.6% of the population, were covered by Hospital Treatment cover. There was no change in the percentage of the population covered, compared to the December 2008 quarter.

There was an increase in coverage of 45,269 insured persons in the March 2009 quarter. There was an increase of 16,537 single policies and an increase of 9,956 family policies during the quarter. There was a net increase of 26,493 hospital policies. Over the year, from 31 March 2008, the number of insured persons with hospital treatment cover has increased by 225,196 persons and 129,854 policies.

There was a notable increase in coverage during the quarter of 7,256 persons for people aged 65-69. The increases in the older age groups are partly due to ageing of the insured population with people moving from younger to older age cohorts. There was an increase of 7,319 people aged 20-29. These people historically have a lower proportion of persons with private health insurance compared to other age groups.

Lifetime health cover

The majority of adults with hospital cover (89.5%) 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 March 2009 quarter, there were 730,393 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 94,246. There was a net increase in persons with a certified age of entry of 30 (with no penalty) over the year of 77,360.

Net Quarterly change in insured persons

Number of persons insured by age

Hospital treatment tables 

 contents

General treatment

At 31 March 2009, 11,140,653 persons or 51.3% of the population had some form of General Treatment cover. There was an increase in the percentage of the population covered, compared to the December 2008 quarter, of 0.3 percentage points.

There was an increase in coverage of 109,158 insured persons in the March 2009 quarter. There was an increase of 32,925 single policies and an increase of 25,272 family policies during the quarter. There was a net increase of 58,197 general treatment policies.

Over the year, to 31 March 2009, the number of insured persons with general treatment cover has increased by 599,222 persons and 313,913 policies.

The General Treatment (ancillary) by age charts and data in this reports 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. The March 2009 quarter is the first quarter since March 2007 in which data is collected according to this definition. The aim of this change is to map the trend in ancillary coverage prior to 1 April 2007 to the current period.

For comparison for this quarter, we have estimated the data for December 2008 based on the data prior to 1 April 2007 and the figures for the March 2009 quarter.

There was an increase in coverage of 102,665 persons with General Treatment ancillary coverage in the March 2009 quarter. The largest increases in coverage of 27,075 persons, was for people in the 25-29 age cohort.

The 25 to 29 age group historically has a lower proportion of persons with general treatment insurance compared to other age groups. Some age groups, 10-19 and 40-59, had decrease in membership of 30,550 persons over the quarter.

Net quarterly change in insured persons (ancillary)

Number of persons insured by age (ancillary)

General treatment tables

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Benefits paid 

Hospital treatment  

During the March 2009 quarter, insurers paid $2,056 million in hospital treatment benefits. This was an increase of 1.5% compared to the December 2008 quarter. Hospital treatment benefits were comprised of: 

• $1,442 million for hospital services such as accommodation and nursing

• $316 million for medical services

• $295 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 $756.44 to $834.78. 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 March 2009

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

Hospital treatment benefits per person

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General treatment  

During the March 2009 quarter, insurers paid $731 million in general treatment (ancillary) benefits. This was an increase of 6.5% compared to the December 2008 quarter. Ancillary benefits for the March quarter included the major categories of: 

• Dental $370 milion

• Optical $128 million

• Physiotherapy $55 million

• Chiropractic $ 52 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 March 2009 were $285.41, increasing from $239.72 in the year to March 2008. The largest component of ancillary benefits is dental for which $147.21 was paid per person during the year to March 2009.

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

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

General Treatment benefits per person (ancillary)

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Medical Benefits

Total benefits for medical services decreased 0.8% during the quarter as there were fewer medical services in the quarter. However, benefits paid on average for the medical services increased 0.2% per service 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% of all medical benefits and totaling $76.852 million.

Medical benefits paid by speciality group

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Prostheses benefits

Benefits paid for prostheses increased 3.2% per prosthetic item during the quarter. Similar to medical services, the increase in benefits paid for prostheses was calculated over a range of prosthetics (see chart) and does not mean prostheses overall increased in cost. The increase in benefits paid may reflect a change in the type of prosthetics utilized, or a change in the overall utilization of prosthetics. The prosthetic group for which the greatest amount of benefits was paid was "hips", comprising 14% of all prosthetics and totaling $41.116 million. The combined cardiac group comprised 25% of all prosthetics and totaled $74.843 million over the quarter.

Benefits paid for prostheses

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Service utilisation  

During the March 2009 quarter, insurers paid benefits for 2.077 million days in hospital, arising from 750,384 hospital episodes of care.

The average length of stay was 2.77 days; an increase of 2.6% compared to December 2008 quarter. The utilisation rates for hospital episodes, medical services and prostheses services continue to increase. This might not be evident when compared to the December 2008 quarter.

Hospital utilisation is distributed over four categories of hospital: public, private, day only facilities and hospital substitute. During the March 2009 quarter hospital episodes were distributed as follows:

• public hospitals 109,547 episodes

• private hospitals 535,956

• episodesday hospital facilities 102,075

• episodeshospital-substitute 2,806 episodes.

Between the December 2008 and March 2009 quarters the only increase in hospital utilisation was in public hospitals. However, comparing the annual results for the year to March 2008 and for the year to March 2009 there were increases in all hospital categories except for hospital-substitute. 

Day-only episodes in the four categories of hospital totaled 456,039, a decrease of 2.5% compared with the December 2008 quarter.

Hospital treatment services per 1,000 insured persons

General treatment services per 1,000 insured persons

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Out-of-pocket payments  

The average out of pocket (gap) payment for a hospital episode was $307.20 in the March 2009 quarter and included out-of-pocket payments for medical services and some prostheses as well as any excess or copayment amounts relating to hospital accommodation. The out of pocket payments for hospital episodes decreased by 3.0% compared to the same quarter previous year.

Out of pocket payments for medical services were $143.09 where an out of pocket payment was payable. The amount of gap for medical services varies depending on the specialty group. Plastic/reconstructive medical services incurred the largest gap followed by urology, neurosurgical and ear, nose and throat. The state with highest amount of gap payment where gap was paid was New South Wales.

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  

Total benefits paid over the 12 months to March 2009 increased by $1,225m. Inflation adjusted, the real increase was 6.6%. Contribution income received by health benefits funds increased by $956m. Inflation adjusted, the real increase was 2.6%. The increase in income was unable to offset the rise in benefits, and hence the gross margin was weaker over the 12 month period to March 2009, compared to the preceding period.

Management expenses increased by $146m over the 12 months to March 2009. This was partly attributable to the costs associated with the demutualisation of some insurers. The rise in expenses impacted the industry’s net margin, which at 2.1% was 3.7 percentage points lower than for the 12 months to March 2008.

A profit before tax figure of $192m suffered due to the inability of insurers to record health investment returns in recent quarters. The result was $636m, or 76.8%, down on the previous period’s result.

Health Benefits Fund Profit After Tax Breakdown for 12 months to 31 March 2009

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Prudential position   

The industry lost $414m in total assets over the 12 months to March 2009. An increase of $830m was reported for subsidiary and associated entities, and was related to insurer mergers. This was partially offset by a decrease of $647m in bonds and other fixed interests securities. Property was impacted by current market conditions and lost $224m.

By contrast, health benefits fund liabilities rose over the same period by $386m, the majority of which was unearned premium liabilities, and payables, provisions and others. This had the effect of reducing capital retained by funds by $800m.

Taken as a whole, the industry held a solvency requirement of $5,731m and a capital adequacy requirement of $5,996m as at 31 March 2009.

Health Benefits Fund Assets vs Liabilities as at 31 March 2009