Industry Statistics

Medical gap for insured in-hospital services – March quarter 2006

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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 March 2006 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.

No gap services

The proportion of in-hospital medical services for which there was no gap decreased in the March quarter 2006 by 0.1 percentage points to 82.6%.

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 March quarter 2006, 3,861,633 in-hospital medical services (representing 82.6% of the total) were provided to patients with no out-of-pocket costs. This is a decrease of 0.1 percentage points from the December quarter 2005 figure of 82.7%. There was a small decrease in the proportion of services with a known gap, from 5.3% in December 2005 to 5.2% in March 2006.

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

The percent of services with no gap in the March quarter 2006 varies from 76.0% in Western Australia to 89.5% in South Australia.

There were small increases in the percent of services with no gap in New South Wales, South Australia, Tasmania and the Northern Territory. Other states had small decreases.

The proportion of in-hospital services with no gap and the changes over the quarters are shown in Figure 2, and graphed in Figure 3.

Figure 2: In-hospital services with no gaps gaps March 2003 to March 2006, and changes since March 2003

	NSW/ACT	Vic	Qld	SA	WA	Tas	NT	Australia
Proportion of services with no medical gap - March 2003	75.3%	84.6%	78.8%	93.0%	83.4%	84.2%	81.0%	81.0%
Proportion of services with no medical gap - June 2003	76.2%	84.6%	80.8%	93.3%	75.2%	85.8%	81.1%	81.1%
Proportion of services with no medical gap - September 2003	77.0%	85.4%	81.5%	93.1%	75.9%	86.0%	82.6%	81.8%
Proportion of services with no medical gap - December 2003	76.6%	84.7%	81.6%	93.2%	75.9%	85.7%	82.5%	81.5%
Proportion of services with no medical gap - March 2004	77.4%	85.4%	81.3%	93.3%	77.3%	85.3%	80.3%	82.0%
Proportion of services with no medical gap - June 2004	77.0%	85.3%	80.1%	92.7%	76.4%	86.8%	78.3%	81.2%
Proportion of services with no medical gap - Sep 2004	78.1%	83.9%	81.3%	93.8%	76.1%	87.6%	76.8%	81.8%
Proportion of services with no medical gap - Dec 2004	77.4%	84.0%	80.5%	87.6%	77.3%	86.3%	76.6%	80.9%
Proportion of services with no medical gap - Mar 2005	77.8%	82.8%	79.8%	88.1%	78.1%	81.8%	75.6%	80.6%
Proportion of services with no medical gap - June 2005	78.1%	83.0%	80.0%	88.4%	78.3%	88.4%	75.8%	80.9%
Proportion of services with no medical gap - Sep 2005	79.1%	84.4%	81.9%	89.1%	75.8%	87.4%	74.3%	81.9%
Proportion of services with no medical gap - Dec 2005	80.0%	85.1%	82.8%	89.0%	76.5%	88.1%	76.8%	82.7%
Proportion of services with no medical gap - Mar 2006	80.6%	84.9%	82.3%	89.5%	76.0%	88.6%	77.36%	82.6%
Percentage point change
Percentage point change from December 2003 to March 2004	0.8%	0.7%	-0.3%	0.1%	1.4%	-0.4%	-2.1%	0.5%
Percentage point change from March 2004 to June 2004	-0.4%	-1.1%	-1.2%	-0.6%	-0.9%	1.5%	-2.0%	-0.7%
Percentage point change from June 2004 to September 2004	1.2%	-0.4%	1.3%	1.0%	-0.2%	0.8%	-1.5%	0.6%
Percentage point change from September 2004 to December 2004	-0.8%	0.1%	-0.8%	-6.2%	1.1%	-1.3%	-0.1%	-0.9%
Percentage point change from December 2004 to March 2005	0.4%	-1.2%	-0.7%	0.5%	0.8%	-4.5%	-1.0%	-0.3%
Percentage point change from March 2005 to June 2005	0.3%	0.2%	0.1%	0.2%	0.2%	6.6%	0.1%	0.3%
Percentage point change from June 2005 to September 2005	1.0%	1.4%	1.9%	0.8%	-2.5%	-1.0%	-1.5%	1.0%
Percentage point change from September 2005 to December 2005	0.9%	0.7%	0.9%	-0.1%	0.7%	0.6%	2.5%	0.7%
Percentage point change from December 2005 to March 2006	0.6%	-0.2%	-0.5%	0.5%	-0.5%	0.5%	0.8%	-0.1%

Note: The percentage point change will always reflect the actual un-rounded change in the proportion of medical services with no gap. There may be a slight discrepancy when calculating the change from the published (rounded) figures.

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 $20.56 in the March quarter 2006, including services where there was no gap. This was a small increase from the December quarter 2005 gap which was $19.62.

• The average payment by patients for services where there remained an out-of-pocket cost for the patient was $118.36 in the March quarter 2006 compared to $113.12 in the December quarter 2005.

• 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 March quarter 2006 saw a decrease in the proportion of medical services with a known medical gap. The proportion of medical services with a known medical gap was 5.2% in the March quarter 2006 compared to 5.3% in the December quarter 2005, and 5.5% in the March quarter 2005.

• Figure 4 summarises no gap services and average gap payments by state from March 2005 to March 2006.