Do you need private health insurance? Maybe not
IF YOU'RE considering buying private health insurance, hold off. You might not need it.
Investment adviser Morgan Stanley has said the public hospital system is now so good Australians don't need to join a health fund.
Adelaide Now has reported exclusively on a 63-page analysis from Morgan Stanley.
Obtained by News Corp, the report from the investment bank indicated that "many people now see the free public hospital system as adequate catastrophe cover." It also showed the claim that private health insurance is vital to easing pressure on public hospital waiting lists, was a myth.
The bank produced the report to help advise clients thinking of investing in health funds and public hospitals. Morgan Stanley's Executive Director Daniel Toohey said the private health industry had become lazy and the government should refuse any premiums until the industry sorted itself out.
Trust in the public system is rising
Other research quoted by Adelaide Now, from independent market research company IPSOS, found that the confidence Australians have in the public health system has risen over the last decade to over 80 per cent.
The report has been released as more health funds come under fire for covering fewer health bills for patients. With the everyday Australians sick of additional costs, turning back towards public hospitals.
The Morgan Stanley report predicts health fund membership will continue to fall placing pressure on private hospitals but it says the public hospitals will be able to cope with the demand.
"Our analysis suggests that under a status quo scenario, the public sector could feasibly absorb the excess demand caused by an ageing population and falling participation in the private hospital sector," the report says.
"The picture is not as dire as the media would suggest (of a public system at breaking point, evidenced by crowded emergency departments and ballooning elective surgery wait times)."
People who are grudge purchasers of health insurance "will be better off paying the Medicare Levy Surcharge than buying insurance," the analysis says.
The report highlighted the investment that had been put into public hospitals and the changing attitudes towards booking into a public hospital for elective surgery.
"I would say we are at the point where, yes, people would feel comfortable making public hospitals their choice," Australian Health and Hospitals chief Alison Verhoeven said.
As private health insurance numbers fall she says it's time for the federal government to direct some of the $6 billion it spends subsidising insurers on funding public hospitals which face greater demand.
But could the public system absorb the private demand?
However, spokeswoman Private Healthcare Australia chief Rachel David says the idea that the public sector can absorb the greater demand on hospitals caused by an ageing population was "incorrect and very naive".
"Private hospitals are efficient providers of elective surgery because they act as 'focused factories' and are highly efficient, getting through many more cases in a list than the public system," she said.
Wait times for elective surgery in public hospitals extend to years and the public system can't quickly treat disabling sporting injuries, eating disorders, weight loss surgery, chronic severe anxiety and depression, she said.
The future of health funds
Morgan Stanley is warning its clients of investing in the health sector now that health fund membership is in decline and private hospitals are under financial pressure.
The report notes that people are already ditching private health funds for public hospitals, with the dropping rates expected to continue.