The CEO of Medibank Craig Drummond Explains Why Private Healthcare Is on the Rise in Time of Pandemic

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Date: Mar 01, 2021. Author: Victoria Berezhetska

01 March 2021 News.

As a result of COVID, people have never been more aware, conscious of their fine personal health and well-being. And as a result of stress on government budgets, we also see a bit of funding stress, I suspect, on a public health system in Australia. Widely selective surgical whitelists are blowing up. And that is making the private healthcare proposition much more attractive in the future. 

We have seen this uplifting anticipation – more people are taking private health care in Australia. In fact, about 140,000 new hospital eyes were added across the system in the December half. That’s the first significant increase in the participation we’ve seen since 2014.

As a Medibank brand, we have grown our policyholder numbers for the first time since 2013. So, a lot of this is playing out, but it is also playing out in the behavior of people. 

A lot of older folks are avoiding hospitals when they can. And indeed, we see perhaps some softness in what we call the medical areas of climbs, which are people going in for rehabilitation post-surgery and a range of other procedures, that perhaps are not acute. And they are now being done in higher, more community-based facilities. So, we have a clinical homecare business, which is in a very-very uplifting volume through the curved period, and that’s continuing. 

And we do surveys of our customers. And the most recent survey we did states that 4 in 5 Australians are now saying that if they can get clinical care at home when appropriate, they will do so. And that numbers up quite a lot over the past year. 

So, where does this live the outlook for premiums? We’ve got a premium uplift once a year in April. It means that the industry will have a 2.7% increase on 1 April 2021. And premiums for 2022 will be determined later this year with the government. I suspect they will be broadly around the same level. The premium prices are one of the things that help to increase the attractiveness of product healthcare. We saw the 5-7% premium uplift to prices 4 or 5 years ago. They now are in the twos and threes (2-3%). And that is a much more affordable proposition, particularly bearing in mind the level of wages at the moment.

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Victoria Berezhetska

The content writer that covers insurance industries.

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