Medical gap for insured in-hospital services – June 2003 quarter

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The National Health Act 1953 and Health Insurance Act 1973 allow health funds to pay a benefit in excess of the Medicare Benefits Schedule (MBS) fee for medical services where conditions are met through contracts or other agreements. This allows health funds to provide ‘no gap’ or ‘known gap’ in-hospital medical services to insured patients.

The Private Health Insurance Administration Council (PHIAC) commenced collection of additional data from private health insurers designed specifically to measure the medical gap starting from the September 2000 quarter.

The June 2003 figures in this report are from this PHIAC collection and are the most accurate available. They are not directly comparable with statistics prior to the September 2000 report. Historical trend figures given in this report, prior to September 2000 are derived indicative estimates only.

In addition to summary tables and charts, this report provides detailed medical service statistics by state in both excel format and pdf format. The detailed statistics provide information on medical services and gap payments for a range of charges in relation to the MBS fee. The information contains further detail by the type of agreement between health funds and medical service providers.

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No gap services

The proportion of in-hospital medical services for which there was no gap increased in the June quarter 2003. This increase follows a general trend to increase every quarter since the data has been collected.

Note that each private episode of care may include a number of medical services provided by a number of doctors. The statistics in this report show gap by medical service; they do not show gap by hospital episode. ‘Gap’ is defined as the amount payable by the patient (or out-of-pocket costs) after the Medicare Benefits and Fund Benefits have been paid. There is no gap payable where there is a “No gap agreement’ between the fund and the provider, or where there is no agreement but the provider charges no more than the MBS fee.

In the June quarter 2003, 3,261,828 in-hospital medical services (representing 81.1% of the total) were provided to patients with no out-of-pocket costs. This is an increase of 0.1 percentage points from the March quarter 2003 figure of 81.0%. The proportion of services with a known gap increased by 1.0 percentage point, from 3.5% to 4.5%.

Figure 1: Proportion of in-hospital medical services with no gap, Australia

The percent of services with no gap varies from 75.2% in Western Australia to 93.3% in South Australia.

The largest decrease in the percent of no gap services for the June quarter 2003 was in Western Australia with an 8.2 percentage point decrease over the March quarter 2003. However, this movement was primarily due to a change in the classification of medical services in Western Australia. Known gap services increased 10.7 percentage points in Western Australia, with the result that No or Known Gap Services combined increased 2.5 percentage points.

There were increases in all other states with the largest increase in Queensland of 2.1% points.

The proportion of in-hospital services with no gap and the changes over each quarter since the collection began in September 2000 is shown in Figure 2, and graphed in Figure 3.

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Figure 2: In-hospital services with no gaps December 2000 to June 2003, and changes* since December 2000

* Changes in early periods should be viewed with caution as the reporting of these statistics was relatively new. Health funds have made changes to reporting systems to provide better information on medical services and in some cases the method of compilation provided data in later quarters that is not consistent with data collected in the early quarters of the collection.

Figure 3: Proportion of in-hospital medical services with no gap, by State

Gap payments

The average gap payment for all insured in-hospital medical services was $18.19 in the June quarter 2003, including services where there was no gap. This was an increase compared to the March quarter 2003 of $17.22.

The average payment by patients for services where there remained an out-of-pocket cost for the patient was $96.01 in the June 2003 quarter compared to $90.64 in the March 2003 quarter.

Increases in the average payment by patients for services where there remained an out-of-pocket cost should be viewed with caution. Doctors who charge smaller amounts above the schedule fee are likely to be among the first to sign up to no gap schemes or arrangements.

The June quarter 2003 saw an increase of 1.0 percentage points in the proportion of medical services with a known medical gap, from 3.5% to 4.0%.

Figure 4 summarises no gap services and average gap payments by state from September 2001 to June 2003.

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