What do people with high care needs actually use their private health insurance for?

There has been a lot of media attention on the role of the Australian private health insurance industry recently with reforms to the sector announced in October. These reforms aim to increase the number of people taking our private health insurance particularly young people, introduce a rating system to make policy coverage clearer for consumers and enhance benefits for mental health.

While the value of private health insurance to the average Australian is vigorously debated, it is important to recognise that some people with private health insurance have high health care needs. However, we know little about the differences in service use within the privately insured population. Private health insurance policies cover a range of hospital services and we wanted to understand the profile of the highest users, particularly the conditions for which this group was seeking treatment.

We analysed private health insurance claims data from 13 different funds over a 5 year period and used different methods to measure hospital resource use – number of admissions, length of stay and hospital costs. We took the top 1% of users in each group and formed 3 high use groups and compared their hospital use to the total insured population with a hospital admission.

The 3 high use groups had a relatively similar profile. The highest users were older, had a higher proportion of same day admissions and a higher rate of admissions to public hospitals using their private heath insurance than the total insured population with a hospital admission. One quarter of admissions for the high use cohorts was to public hospitals compared to 16% of admissions for the total insured population.

We examined the health conditions for which people were admitted to private hospitals (as public hospital diagnosis information was not complete). The most common reasons for hospital admission among the top users were mental health, cancers, dialysis and rehabilitation. These 4 areas made up more than two thirds of all admissions for all high use groups. The top 1% of users accounted for a high level of overall hospital use including more than 21% of all bed days and 19% of all admissions.

An interesting implication of the research findings is that, in contrast to many strategies introduced by hospitals and insurers to try and reduce hospital admissions and improve health management for conditions such as heart disease and diabetes, the most common conditions among the top users are not easily preventable through disease management interventions. Although only a narrow set of health conditions account for the majority of hospital admissions among high use groups, these conditions relate to a diverse set of care needs, so different strategies will likely be required

As health care systems shift in focus from treating acute illness to preventing and managing chronic illnesses, it is important not to lose sight of other groups, particularly those with the highest health care needs. It needs to be recognised that in many cases, hospitalisations may not be preventable and attention to strategies that could better support high needs group are required.

The full, open access article was published in Australian Health Review and can be found here.

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