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Operations Of The Private Health Insurers Annual Report 2006-07

Part B

Operations Review

Benefits Per Service

The average benefit paid per service is a factor affecting total benefits paid, in addition to utilisation of services. This section examines the average benefit per service for the major types of hospital and general treatment services. Table 17 to table 20 at the end of this section show details of benefits per service and the change in benefits per service over time.

Accommodation benefits

Hospital accommodation benefits are driven by the number of episodes of care and benefits paid per episode. Acute accommodation benefits per episode were $1,769 on average during 2006–07, increasing 1.2% compared to 2005–06. There was an increase of 1.5% per episode in public hospitals and 2.0% in private hospitals. The average benefit per episode in day hospital facilities increased 1.1%, contributing to an increase in benefits per day of 3.8% over all hospitals.

Average benefits per episode are also driven by the age profile of membership. Figure 9 shows average benefits per episode by age cohort. Benefits paid per episode increase with age, with an increase for females in excess of males during child-bearing ages. The increase in benefits per episode for the older ages is consistent with increasing length of stay for older ages.

Figure 9. Hospital benefits paid per episode by age cohort

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Medical services and listed prostheses

Average benefits per medical service were $52 per service in 2006–07. They increased 5.0% during 2006–07 on 2005–06. The increase reflects a growth of 4.2% per service for those medical services charged above the schedule fee. The average benefit paid for medical services where the charge was greater than the schedule fee was $61 per service. The proportion of services charged above the schedule fee has been slowly growing and was 80% in 2006–07.

Average benefits per prosthetic item increased 4.5% per item in 2006–07 on 2005–06. The increase in average benefits paid and increased utilisation of individual prosthetic items has resulted in increased total benefits paid by funds for listed prostheses (an increase in total benefits paid for listed prostheses of 7.9% in 2005–06 and 10.8% in 2006–07). However, this increase in average benefits should not be interpreted as increased cost of individual prosthetic items. PHIAC only collects data on total benefits paid for listed prostheses and the total number of prosthetic items. There may be changes in the types of prosthetic items utilised that affect the average benefit.

General treatment benefits (excluding hospital-substitute and chronic disease management programs)

Average benefits per service for the major general treatment services, known as ancillary services prior to 1 April 2007, are shown in table 20. Average benefits for the major general treatment service––dental––increased 5.3% over the year, while optical increased 1.9%, physiotherapy increased 2.2%, chiropractic increased 3.5% and podiatry increased 5.5%. Average benefits for pharmacy services decreased 2.6%, following a decrease of 1.8% during 2005–06.

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