Private health insurers: ACCC report

The ACCC has released its annual report on the private health insurance industry.

ABC News reports that the ACCC found the complexity of the system was central to most consumer complaints.

“A range of factors contribute to this complexity, including regulatory settings, the sheer number of policies available, the range of benefits and exclusions, preferred provider arrangements, policy variations and differing terminology between funds which makes comparison difficult,” the ACCC said.

The preferred provider issue and the fund owned clinics were both the subject of comment in section 7 of the report, as follows:

7.1 Preferred providers Concerns were raised by a number of industry associations that the quality of service provided to consumers is being compromised. This is as a direct result of:

• consumers being led to believe that preferred providers offer a better service or an exclusive product when this is not necessarily the case

consumers being directed to preferred providers because the service may be cheaper but the practitioner may not be as qualified or offer the appropriate quality of service that the consumer requires.

Questions were raised about whether the preferred provider scheme impacts freedom of choice for consumers. Several dentists expressed concern about being forced to become preferred providers in order to retain their patient base. They also advised that in some situations where they may be interested in becoming preferred providers, some insurers were not accepting any more providers and had ‘closed their doors’. Concerns were also expressed about preferred provider schemes having the potential to disadvantage policy holders from rural/remote areas who pay the same premiums but may receive lower benefits for comparable services because they have less choice, resulting in greater out-of-pocket expenses.

7.2 Fund owned clinics The ACCC was advised of concerns about clinics which are owned and run by the health fund. This was especially concerning where the health fund redirects customers to these clinics. Allegations were made that this could restrict consumers’ freedom of choice, compromise the quality of service being provided and result in anti-competitive conduct.

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