Australian health funds paid a record $23.6 billion for healthcare in 2023 as claims by health funds members hit a new high, exceeding pre-pandemic levels.
Health fund membership is also at an all-time high with over 14.73 million Australians choosing private health cover. This follows 14 consecutive quarters of membership growth. The pandemic brought home the value of private health insurance for consumers, which is to access surgery at a time of their choosing and inpatient mental healthcare when and where they need it.
APRA’s quarterly report, released today, shows benefits paid by health funds in 2023 totalled $23.6 billion, an increase of 10.2 percent over the previous year. Health funds paid $17.3 billion in hospital benefits, up 11.1 percent on 2022, an increase of $1.73 billion. Extras benefits paid for members totalled $6.16 billion, up 7.6 percent on 2022, or an additional $435 million.
Hospital services totalled 4.92 million, up 9.2 percent on 2022, representing an additional 414,000 hospital episodes. Extras services also hit a record high of 102.4 million for services including dental, optical and physiotherapy, up 6.4 percent on 2022.
Private Healthcare CEO Dr Rachel David said, “Australian health funds are doing everything they can to deliver the best possible value for members at a time when the public hospital system is still struggling to recover from the impact of COVID-19.”
“With health inflation spiralling, and cost-of-living hitting members hard, we therefore need to double down on addressing affordability and stamping out waste. This is critical as claims growth returns to pre-COVID levels.
“The inflated price of generic medical implants and surgical supplies continues to be a challenge. It remains a major factor pushing up costs for heath funds and impacting premium affordability. Furthermore, the number of medical device claims per surgical procedure is continuing to grow disproportionately as a consequence of the sales and marketing activities of the multinational suppliers of these items.
“Health funds paid a record $2.36 billion in medical device benefits in 12 months to December 2023. A four year analysis of APRA data shows the number of medical devices funded by health insurers since the start of the pandemic has surged by 12 percent. This is totally out of proportion to the 2 percent increase in medical services and the 4.7 percent increase in hospital episodes over the four years to December 2023. There is no change in clinical practice that adequately explains this rate of growth.
