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September 2009

Quarterly Statistics

September 2009

Suggested citation: Private Health Insurance Administration Council, Quarterly Statistics September 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 44.7% at 30 September 2009 ↑ 0.12% points from 30 June2009 ↑ 75,721 insured persons over the quarter  General treatment membership 51.4% at 30 September 2009  ↑ 0.2% points from 30 June 2009   ↑  105,443 insured persons over the quarter
	Hospital treatment episodes ↑5.5% over the 12 months to Sept 2009 ↑ 5.3% over the quarter General treatment services (ancillary)  ↑5.3% over the 12 months to Sept 2009 ↑ 0.6% over the quarter
	Hospital treatment benefits ↑11.2% over the 12 months to Sept 2009 ↑ 6.4.% over the quarter General treatment benefits  ↑7.5% over the 12 months to Sept 2009 ↓0.7% over the quarter
	Hospital treatment out-of-pocket $300.97 General treatment out-of-pocket $48.63
	Premium revenue ↑7.5% Profit before tax   ↑69.7%

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Membership and coverage

as at 30 September 2009 

Hospital treatment 

At 30 September 2009, 9,820,963 persons, or 44.7% of the population, were covered by Hospital Treatment cover. The percentage of the population covered increased 0.12 % points, compared to the June 2009 quarter.

There was an increase in coverage of 75,721 insured persons in the September 2009 quarter. There was an increase of 14,463 single policies and an increase of 17,970 family policies during the quarter. There was a net increase of 32,433 hospital policies. Over the year, from 30 September 2008, the number of insured persons with hospital treatment cover has increased by 218,591 persons and 119,278 policies.

There was a notable increase in coverage during the quarter of 10,136 persons for people aged 20 to 24, reversing a similar decline in this age in the June quarter. There were increases in all age groups over the quarter (except for 90–94, with a marginal decrease of 245. 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 is also growing proportions of insured persons in these age groups.

Lifetime health cover 

The majority of adults with hospital cover (89.0%) 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 September 2009 quarter, there were 782,080 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 89,104.

There was a net increase in persons with a certified age of entry of 30 (with no penalty) over the year of 73,923.

Net quarterly change in insured persons

Number of insured persons by age

Hospital treatment tables 

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General treatment 

At 30 September 2009, 11,304,187 persons or 51.4% of the population had some form of General Treatment cover. There was an increase in the percent of the population covered of 0.2 percentage points, compared to the June 2009 quarter.

There was an increase in coverage of 105,443 insured persons in the September 2009 quarter. There was an increase of 20,216 single policies and an increase of 25,299 family policies during the quarter. There was a net increase of 45,515 general treatment policies.

Over the year, to 30 September, the number of insured persons with general treatment cover has increased by 361,217 persons and 190,960 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.

There was an increase in coverage of 102,128 persons with General Treatment ancillary coverage in the September 2009 quarter. The largest increases in coverage, 11,631 persons, was for people in the 20–24 age cohort.

The 20 to 29 age group historically has a lower proportion of persons with general treatment insurance compared to other age groups. The increase in the September quarter reverses a similar size decrease in the June 2009 quarter.

Net quarterly change in insured persons (ancillary)

Number of insured persons by age (ancillary)

General treatment tables

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Benefits paid 

Hospital treatment   

Benefits per episode/service

During the September 2009 quarter, insurers paid $2,235 million in hospital treatment benefits. This was an increase of 6.4% compared to the June 2009 quarter. Hospital treatment benefits were comprised of:

• $1,558 million for hospital services such as accommodation and nursing
• $361 million for medical services
• $314 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 $787.11 to $855.83. 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 September 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 September 2009 quarter, insurers paid $731 million in general treatment (ancillary) benefits. This was a decrease of 0.7% compared to the June 2009 quarter. Ancillary benefits for the September quarter included the major categories of:

• Dental $384 milion
• Optical $114 million
• Physiotherapy $60 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 September 2009 were $287.36, increasing from $252.58 in the year to September 2008. The largest component of ancillary benefits is dental for which $148.06 was paid per person during the year to September 2009.

General treatment benefits paid by age 12 months to 30 September 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 increased 8.0% during the quarter and the number of medical services in the quarter increased by 8.0%. Benefits paid on average for the medical services did not change 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 totalling $86.868 million.

Medical benefits paid by speciality group

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Prostheses benefits 

Total benefits paid for prostheses over the quarter increased 3%, compared to the June quarter. Benefits paid per prosthetic decreased 0.2% per 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 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 $92 million. The combined cardiac group comprised 21.8% of all prosthetics and totalled $68 million over the quarter

Benefits paid for prostheses

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Service utilisation 

During the September 2009 quarter, insurers paid benefits for 2.177 million days in hospital, arising from 815,109 hospital episodes of care.

The average length of stay was 2.67 days; a decrease of 0.6% compared to the June 2009 quarter. The utilisation rates for hospital episodes, medical services and prostheses services increased during the quarter, continuing the general trend.

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

• public hospitals 116,553 episodes

• private hospitals 576,554 episodes

• day hospital facilities 118,714 episodes

• hospital-substitute 3,288 episodes.

Between the June 2009 and September 2009 quarters hospital utilisation increased in all categories of hospital except for hospital- substitute. These increases continue the trend with increases in utilisation in all categories over the year from September 2008 to September 2009.

Day-only episodes in the four categories of hospital totaled 512,032, an increase of 6.2% compared to the June 2009 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 $300.97 in the September 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 1.9% compared to the same quarter of the previous year.

Out of pocket payments for medical services were $140.49 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 $345.88, followed by orthopaedic with an average gap per service of $275.12, followed by neurosurgical and then urology. Plastic/reconstructive medical services incurred the largest gap as a percent of the fee followed by urology, neurosurgical and "ear, nose and throat". The state with the 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 by the industry for the 12 months to 30 September 2009 was $954 million more than the prior

12 months. The underlying cause of the increase has been, and continues to be, the ageing of the population, advancements in technology and membership growth.

Offsetting the increase in benefits, contribution income had also increased by $935 million over the same period. This increase is due to the growth in membership as well as the average weighted premium increase of 6.02% which was implemented on 1 April 2009.

The reduction in gross margin over the past 12 months was offset by a similar reduction in management expenses thus there was a negligible difference in the net margin for the 12 months to 30 September 2009 and 30 September 2008. In addition, improving economic conditions provided a stronger return on investments resulting in $691 million in profit before tax for the period. In contrast, the industry had only recorded $407 million in profit before tax for the 12 months to 30 September 2009.

Health benefits fund profit after tax breakdown for 12 months to 30 September 2009

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Prudential position 

**includes health insurance equipment and other assets

All private health insurers remained compliant with the Capital Adequacy and Solvency Requirements. As at 30 September 2009, the industry as a whole had $2.98 billion (30 September 2008: $3.67 billion) in excess of its capital requirements. The reduction of excess assets has been primarily due to the reduction in asset value caused by the impact of the Global Financial Crisis, dividend payments provided for by the for-profit insurers, and consolidation of the industry causing an increase in the inadmissible component.

PHIAC notes that private health insurers continue to increase their asset exposure to more conservative investments that are expected to have a lower return for lower risk.

Health benefits fund assets vs liabilities as at 30 September 2009