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March 2010

Home » For Industry » Industry Statistics » Quarterly Statistics » March 2010

 

Quarterly Statistics

March 2010

Suggested citation: Private Health Insurance Administration Council, Quarterly Statistics March 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
44.5% of population at 31 March 2010
No change in coverage from 31 December 2009
↑ 46,686 insured persons over the quarter
 
General treatment membership
51.4% of population at 31 March 2010
↑ 0.1% points from 31 December 2009
↑87,245 insured persons over the quarter
 

 

 

 
  
 

 

Hospital treatment episodes
↑5.0% over the 12 months to March 2010
↑7.1% over the quarter
 
General treatment services (ancillary)
↑4.4% over the 12 months to March 2010
↑6.8% over the quarter
 

 
 

 

Hospital treatment benefits
↑7.9% over the 12 months to March 2010
↑6.4% over the quarter
 
General treatment (ancillary) benefits
↑6.6%          over the 12 months to March 2010
↑ 9.6%         over the quarter
 

 
 

 

Hospital treatment out-of-pocket
$313.70
 
General treatment out-of-pocket
$47.97
 

 
 

 

Premium revenue 
↑ 8.1% over the 12 months to March 2010
 
Profit before tax   
↑ 553.1% over the 12 months to March 2010

 

contents

 

Membership and coverage

as at 31 March 2010
Hospital treatment 

At 31 March 2010, 9,912,887 people, or 44.5% of the population, were covered by hospital treatment cover. There was no change in the percentage of the population covered compared to the December 2009 quarter.1 There was an increase in coverage of 46,686 insured people in the March 2010 quarter.
 

There was an increase of 12,044 single policies and an increase of 11,995 family policies during the quarter. This resulted in an overall increase of 24,039 hospital policies. For the 12 months to 31 March 2010, the number of insured people with hospital treatment cover has increased by 210,770 and 110,280 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 people in these age groups.
Decreases in coverage were seen for people aged 45 to 49.

 

 Lifetime health cover 

The majority of adults with hospital cover (88.5%) 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 continues to increase each quarter since the introduction of Lifetime Health Cover.

At the end of the March 2010 quarter, there were 818,752 people with a certified age of entry of more than 30 and subject to Lifetime Health Cover loading; a net increase in people paying a penalty over the year of 88,359. There was a net increase in people with a certified age of entry of 30 (with no penalty) over the year of 69,116.  

Net quarterly change in insured persons

 

 

Number of insured persons by age

 

Hospital treatment tables 

 1  ABS revised population estimates upward from September 2008 resulting in the population coverage over that period being revised downward. The population coverage of 44.7% shown in PHIAC’s Quarterly Statistics for the December 2009 quarter has been revised downward to 44.5%

 contents

 

General treatment 

 

At 31 March 2010, 11,449,950 people or 51.4% of the population had some form of general treatment cover. This resulted in a 0.1 percentage point increase (or 87,245 people) compared to the December 2009 quarter.
 
The increase in single policies was 23,137 and family policies increased by 21,406 during the quarter. The overall increase was 44,543 general treatment policies. For the 12 months to 31 March 2010, the number of insured persons with general treatment cover has increased by 309,297 and 160,411 policies.
 
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 policies that do not cover ancillary treatment.
 
There was an increase of 96,525 people with general treatment (ancillary) coverage in the March 2010 quarter. The largest increase in coverage was for people in the 60-69 age cohorts.

 

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

 

 

 

March  2010

$

Change from 
December 2009
%

Acute

1,958.36

1.8

Medical

54.08

-4.1

Prostheses

794.05

3.3

   Cardiac

5,896.09

0.7

   Hips

2,576.62

0.4

   Knees

2,218.31

0.2

   Lens

437.07

0.9

Total benefits

 

 

Hospital

2,181,695,442

-1.6

General

801,425,020

10.3

 

During the March 2010 quarter, insurers paid $2,182 million in hospital treatment benefits, a decrease of 1.6% compared to the December 2009 quarter. Hospital treatment benefits were comprised of:

·         $1,542 million for hospital services such as accommodation and nursing
  • $329 million for medical services
  • $309 million for prostheses items
  • $2.5 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 $833.85 to $880.76. 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 2010

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

 

contents

 

General treatment  

 

 

 

March  2010

$

Change from 
December 2009
%

Dental

57.16

4.2

Chiropractic

25.62

11.0

Physiotherapy

29.30

6.9

Optical

67.12

6.9

 

During the March 2010 quarter, insurers paid $801 million in general treatment (ancillary) benefits. This was an increase of 10.3% compared to the December 2009 quarter, and historically appears to be a seasonal trend. Ancillary benefits for the March quarter included increases in the major categories of:
  • Dental $408 million
  • Optical $149 million
  • Physiotherapy $63 million
  • Chiropractic $59 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 2010 were $293.60, increasing from $284.78 for the year to March 2009. The largest component of ancillary benefits is dental, for which $151.77 was paid per person.

 

General treatment benefits paid by age 12 months to 31 March 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 decreased 7.3% during the quarter with the amount of benefits paid per service decreasing by 4.1%.

 

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 25% of all medical benefits and totalling $82 million.

Medical benefits paid by speciality group

 

contents

 

Prostheses benefits 

 

Total benefits paid for prostheses decreased 0.2% compared to the December quarter. Benefits paid per prosthetic increased 3.3% 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% of all prosthetic benefits and totalling $89 million. The combined cardiac group comprised 17% of all prosthetics and totalled $54 million over the quarter. 

Benefits paid for prostheses

 contents 

 

Service utilisation 

 

 

By Type

March  2010

 

Change from 
December  2009
%

Hosptal Episodes

787,148

-2.4

Hospital Days

2,162,447

3.2

Medical Services

6,079,744

-3.4

Prostheses Items

389,141

-3.4

   Cardiac

9,191

5.3

   Hips

16,742

-3.9

   Knees

20,729

-1.4

   Lens

17,990

-35.2

General Treatment Services

16,824,551

5.6

   Dental

7,133,459

3.6

   Chiropractic

2,303,911

14.9

   Physiotherapy

2,163,924

10.6

   Optical

2,219,411

4.1

 

 

During the March 2010 quarter, insurers paid benefits for 2.2 million days in hospital, arising from 787,148 hospital episodes of care.
The average length of stay was 2.75 days; an increase of 5.7% compared to the December 2009 quarter. The utilisation rates for hospital episodes decreased, inline with a reduction in utilisation rates for medical and prostheses services; possibly reflecting less complex episodes of care during the quarter. 
 
Hospital utilisation is distributed over four categories of hospital—public, private, day only facilities and hospital-substitute. During the March 2010 quarter, hospital episodes were distributed as follows:
  • public hospitals 116,099 episodes
  • private hospitals 554,242 episodes
  • day hospital facilities 113,126 episodes
  • hospital-substitute 3,681 episodes.
For the March 2010 quarter, hospital utilisation decreased by 3.6% in episodes. Utilisation for the categories of hospital increased for public hospitals and hospital-substitute care, while it decreased for private and day hospitals. For the 12 months, utilisation increased in all categories.
   

 

 

Quarter change
%

 

Year change
%

public hospitals

↑

0.2

↑

 6.6

private hospitals

↓

-2.8

↑

6.2

day hospital facilities

↓

-3.2

↑

8.4

hospital-substitute

↑

20.3

↑

19.3

 Day-only episodes in the four categories of hospital totaled 489,077, a decrease of 3.8% compared to the December 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

March 2010

$

Change from 
December  2009
%

Change from  
March  2009
%

Hosptal treatment

313.70

2.6

3.5

Hospital-substitute treatment

3.61

-83.6

42.0

General treatment

47.97

-3.4

-0.8

Prostheses where gap was paid

30.84

4.4

33.0

Medical gap where gap was paid

143.72

-1.9

0.4

 

 

The average out-of-pocket (gap) payment for a hospital episode was $313.70 in the March 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 3.5% compared to the same quarter for the previous year.

Out-of-pocket payments for medical services were $143.72 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 $353.55, followed by ophthalmology with an average gap per service of $259.43. 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

 

contents  

Financial information

Financial performance 

  

All Figures $'000

12 months
to March
2010*

12 months to March 2009

Revenue

 

 

HIB premium revenue

13,892,808

12,851,715

Net HRB and other revenue

657,677

-74,852

Total revenue

14,550,485

12,776,863

Benefits

 

 

Fund benefits

11,875,921

11,079,466

State ambulance levies

158,149

144,040

Total fund benefits

12,034,070

11,223,506

Expenses

 

 

HIB expenses

998,288

1,089,197

HIB claims handling

261,983

264,725

Other expenses

3,868

7,677

Total expenses

1,264,139

1,361,600

Profit

 

 

Profit/(loss) before tax

1,252,275

191,758

Taxation expense

195,716

93,101

Profit/(loss) after tax

1,056,560

98,656

Non HBF related profit/(loss)

3,994

-743

Profit/(loss) of the insurer

1,060,553

97,914

Margins

 

 

Gross margin

13.38%

12.67%

HIB expenses

9.07%

10.53%

Net margin

4.31%

2.13%

   

The gross margin for the industry over the year to March 2010 was 13.38%, a marginal improvement from 12.67% for the previous year. Total revenue increased $1.77 billion whilst benefits increased by $811 million for the period. In addition, total expenses for the industry reduced by $97 million to $1.26 billion. As a result of lower expenses and higher revenue, the industry reported a stronger net margin of 4.31% for the year to March 2010 (March 2009: 2.13%).
Coupled with strong investment returns, reflecting improvements in asset value and stability in the financial markets for the 12 months to March 2010, the industry has recorded an overall profit of $1.06 billion, significantly above the preceding period of just $98 million.
 

Health benefits fund profit after tax breakdown for 12 months to 31 March 2010

contents 

 

Prudential position 

  

All Figures $'000

March

2010

 

March

2009

Health benefits fund financial assets

 

 

Cash

440,605

1,305,313

Investments

    

Equities

811,224

692,036

Bonds & other fixed interest securities

5,455,055

3,737,591

Property

437,289

397,635

Subsidiary and associated entities

670,931

1,235,166

Loans

90,257

94,183

Premiums receivable

80,292

88,268

Intangibles DAC and FITBS

64,622

60,467

Prepayments

22,787

21,941

Other**

821,072

890,796

Total assets

8,894,134

8,523,396

Health insurance liabilities

    

Unearned premium liabilities

1,573,237

1,487,720

Unpresented & outstanding claims

1,406,018

1,371,780

Other fund liabilities

128,225

122,649

Interest bearing liabilities

29,188

27,120

Payables, provisions & other liabilities

584,361

531,383

Total liabilities

3,721,029

3,540,651

Health benefits fund capital

5,198,105

5,007,745

Solvency requirement

5,373,919

5,731,120

Capital adequacy requirement

5,639,235

5,996,149

**includes health insurance equipment and other assets

 

Total assets increased by 4.3% to $8.89 billion (March 2009: $8.52 billion). By contrast, liabilities rose over the same period by $180 million, the majority of which was caused by an increase in unearned premium liabilities, as well as unpresented and outstanding claims liabilities. As such, the industry’s total capital was $5.20 billion, up from $5.01 billion as at March 2009.  
The industry as a whole remains in a sound capital position with excess assets for solvency purposes of $3.52 billion against a requirement of $5.37 billion.

 

Health benefits fund assets vs liabilities as at 31 March 2010