Re: Department of Health s Private Health Insurance Consultation

16 December 2015 The Hon Sussan Ley MP Minister for Health Department of Health GPO Box 9848 CANBERRA ACT 2601 Email: PHIconsultations2015-16@health.gov.au Dear Minister Re: Department of Health s Private Health Insurance Consultation The Royal Australian and New Zealand College of Psychiatrists (RANZCP) welcomes the opportunity to respond to the Department of Health s Private Health Insurance Consultation. The RANZCP s submission focuses on private health insurance for psychiatric care. As outlined in the attached submission, the RANZCP believes that there is a clear need for better communication by private health insurance companies to consumers about whether they are covered for psychiatric care and the extent of inclusions and exclusions in their policies. This lack of communication leads to detrimental health and treatment outcomes for consumers who are seeking private psychiatric services. Consumers also lack the information needed to make informed decisions about their health care as there is no one information source where a consumer can compare the different kinds of policies for psychiatric cover that might be available to them a significant problem when many private health insurance providers only offer limited coverage to begin with. To enhance the value of private health insurance to mental health consumers and to effectively address the needs of this vulnerable group of Australians, the RANZCP recommends that: the Government undertake a review of private health funds psychiatric cover with a view to improving transparency and understanding for consumers public education is essential to ensure that consumers are well informed of what level of cover they may require. In the case of mental illness, this includes raising public awareness of the risk factors associated with mental illness, the physical health needs of people with mental illness and that that symptoms can onset at any age. 309 La Trobe Street, Melbourne VIC 3000 Australia T +61 3 9640 0646 F +61 3 9642 5652 ranzcp@ranzcp.org www.ranzcp.org ABN 68 000 439 047

If you would like to discuss any of the issues raised in this letter, please contact Ms Rosie Forster, Senior Manager Practice, Policy and Partnerships via rosie.forster@ranzcp.org or by phone on (03) 9601 4943. Yours sincerely Professor Malcom Hopwood President Ref: 4371

Department of Health Consultation on Private Health Insurance December 2015 improving the mental health of the community 309 La Trobe Street, Melbourne VIC 3000 Australia T +61 3 9640 0646 F +61 3 9642 5652 ranzcp@ranzcp.org www.ranzcp.org ABN 68 000 439 047

Royal Australian and New Zealand College of Psychiatrists submission About the Royal Australian and New Zealand College of Psychiatrists The Royal Australian and New Zealand College of Psychiatrists (RANZCP) is a membership organisation that prepares doctors to be medical specialists in the field of psychiatry, supports and enhances clinical practice, advocates for people affected by mental illness, and advises government on mental health care. The RANZCP is the peak body representing psychiatrists in Australia and New Zealand, and as a binational college has strong ties with associations in the Asia-Pacific region. The RANZCP has more than 5000 members, including around 3700 fully qualified psychiatrists and almost 1200 members who are training to qualify as psychiatrists. Psychiatrists are clinical leaders in the provision of mental health care in the community and use a range of evidence-based treatments to support a person in their journey to recovery, including pharmacotherapy and psychotherapy. Submission to Department of Health s Private Health Insurance Consultation The Royal Australian and New Zealand College of Psychiatrists (RANZCP) welcomes the opportunity to respond to the Department of Health s Private Health Insurance Consultation (the Consultation). The RANZCP fully supports the Consultation s focus on enhancing the value of private health insurance for consumers and seeking opportunities to amend unnecessary or inefficient regulation, which adds to costs for consumers. The RANZCP s submission focuses on private health insurance for psychiatric care. It is based on a January 2015 submission that the RANZCP made to the Australian Competition and Consumer Commission for its annual report to the Senate on anti-competitive conduct by private health insurers. Overview of private health insurance for psychiatric care As of 30 June 2015, 11,276,328 people or 47.4% of the Australian population had private hospital insurance policies. While there is no available information to the RANZCP on the number of Australians who have private policies for psychiatric care, many private health insurance policies offer minimal levels of cover. For private psychiatric patients, private health insurance covers the cost of hospital accommodation and a portion of the medical fees. However, private hospital cover only provides cover for the services provided as part of in-patient hospital admissions. Many people who receive psychiatric services also require ongoing out-patient treatment, including check-ups and psychiatric consultations. Private hospital insurance will also not cover the gap on any medical services incurred while admitted to hospital and any excesses or co-payments. Further, less than half of all policies from the major insurers cover the cost of an admission to a private psychiatric hospital. Some insurers have also recently moved psychiatric treatment from full benefits to restricted benefits on some of their policies (APHA, 2015). For instance, Medibank Private currently has four levels of hospital cover. The table below summarises the extent to which psychiatric care is covered in each level of policy: RANZCP Submission to Department of Health Consultation on Private Health Insurance Page 2 of 6

Medibank Private Insurance Hospital Policy Type Basic Hospital Standard Hospital Top Hospital Essentials Psychiatric care Yes Yes Yes Yes Restricted Yes Yes Yes No Table 1: example of coverage for psychiatric care Top Hospital On this basis, Medibank Private has very limited levels of coverage for psychiatric care. Of the four levels available, only the Top Hospital provides full psychiatric coverage. This means that Medibank Private pays benefits towards all services for which a Medicare benefit is payable. However, the full extent of what is covered under the Top Hospital cover is not available on the Medibank website. For the other three levels of hospital cover, psychiatric cover is identified as restricted. This means that Medibank Private pays limited benefits for psychiatric care and that - if consumers choose to be treated in a private hospital - the benefits that Medical Private will pay will not cover all hospital costs and are likely to result in significant out-of-pocket expenses. (Medibank Private, 2015). Again, the precise list of what is and is not covered under these policies in terms of psychiatric care is not provided on the Medibank Private website. Inadequate information about private health insurance policies for psychiatric care Feedback that RANZCP Fellows (psychiatrists) receive from consumers of mental health services and admission nurses / administrators indicates that many people have poor experiences in relation to accessing accurate and complete information about their private health insurance policies. Examples of this include: Policy coverage: In many cases, while consumers have private health insurance, they are often surprised to learn that their insurance does not cover psychiatric admission when attending private mental health services. In such cases, when requiring admission, these patients are referred to the public system, which is already over-stretched. Policy exclusions: Private health insurers provide limited information about the exclusions in policies that do include psychiatric care. Most such policies exclude payments for pathology and radiology treatments, multiple psychiatric admissions and limit the number of ECT treatments. This leads to situations where patients face an unexpected bill for these services when they arrive home. Waiting period for psychiatric services: Some consumers have been informed that the waiting period for psychiatric services is 12 months when the Private Health Insurance Act states that the waiting period is two months, including for pre-existing conditions. Day programs: There is consumer confusion about what kinds of day programs and the number of sessions that are covered by private health insurance policies. Further, consumers are not always informed that they cannot access outreach and day programs simultaneously. Outreach is a service where a private mental health service sends a clinician to patients homes to monitor their mental state, assist in home-based therapies such as graded exposure therapy and link patients into community supports. Day programs are where a patient comes to a group program at the hospital but goes home at the end of the day. Both programs assist in patients transition from a hospital RANZCP Submission to Department of Health Consultation on Private Health Insurance Page 3 of 6

admission back to their homes as well as keeping patients supported in the community. Many private health insurance companies provide funding for both outreach and day programs at the same time but BUPA, for instance, does not cover both and this is not clear to mental health consumers. Comparison of private health insurance policies for psychiatric care: There is no one information source where consumers can comprehensively compare currently available private psychiatric policies. While Privatehealth.gov.au does provide detailed information about individual health policies, it does not show everything a policy may or may not include and advises consumers to contact the relevant health fund for comprehensive information. Yet, as illustrated by the Medibank Private example above, this kind of information is not always available on insurers websites. Also, the sheer number of policies makes individual comparison difficult for instance, there are currently 283 policies that provide hospital cover for one adult in Victoria. The only way to do this is to look at each policy individually. Recent examples provided by RANZCP Fellows of these kinds of situations include: an 18 year old woman with psychotic depression who was told she could not have more than one course of ECT per year at a time when the relevant psychiatrist was exploring using maintenance ECT treatment for her after a successful course of ECT treatment a 30 year old man with severe Obsessive Compulsive Disorder and Obsessive Compulsive Personality Disorder was denied an admission at a time he was suicidal because his health fund indicated that he had surpassed his number of psychiatric admission days permitted per annum. The specialist psychiatrist in question had to seek the support of the relevant private health insurance fund in order to have the man readmitted but this meant that the admission process was delayed by many days, taking up a great deal of unnecessary administrative time and causing the patient concerned undue stress. Physical health needs of people with mental illness A related issue is the physical health needs of people with mental illness. Research has shown that 11.7% of Australians aged 16 85 years 1.9 million people have both a mental disorder and a physical condition. The most common combination was a chronic physical condition combined with an anxiety disorder, affecting an estimated 1.4 million Australians (ABS, 2008). There is also extensive evidence that people with complex mental illness have higher rates of chronic physical illness than the general population. A person with a serious mental illness is two to three times more likely to have diabetes, six times more likely to die from cardiovascular disease, more likely to die from almost all key chronic conditions and more likely to die within five years of diagnosis of a chronic condition (RANZCP, 2015). The risk of a person with a mental illness developing a chronic illness may be heightened by the crucial pharmacotherapy they are prescribed to manage their mental illness. Antipsychotic medications are directly associated with the risk of severe physical illnesses such as heart disease and diabetes. Therefore, people who are already suffering from severe mental illness, and who need to take antipsychotic medication, may experience even more suffering from a decline in their physical health and, ultimately, their quality of life. Therefore, the experience of people with private health insurance who have combined mental and physical health needs can be particularly detrimental. This is because many mental health consumers are already in a situation where they experience significant gaps between what is covered by their private health insurance policy and what they must actually pay in terms of their mental health care. These costs can be exacerbated if the expenses of treating related physical conditions are also not covered under their private health insurance policies. For instance, if a person with a mental illness is RANZCP Submission to Department of Health Consultation on Private Health Insurance Page 4 of 6

admitted for physical issues that arise from their mental health illness (e.g. a cardiac condition), they may require blood tests and an echocardiogram items that may not be covered by their private health insurance company. The problem and potential costs are even worse for younger Australians with comorbid mental and physical conditions and / or significant risk factors as their physical conditions may get progressively worse over time. The RANZCP has received feedback from consumers and their families, which suggests that people with both physical and health needs may well think twice about seeking medical assistance given the potential costs involved. This outcome may mean that consumers do not receive appropriate early intervention or treatment for both their physical and health needs or that some physical conditions are not discovered at all. Ultimately this places more economic, physical and social burdens on mental health consumers, their families and carers. Recommendations Based on the above, the RANZCP believes that there is a clear need for better information and communication by private health insurance companies to consumers about whether they are covered for psychiatric care and the extent of inclusions and exclusions on their policies. This lack of communication leads to detrimental health and treatment outcomes for consumers who are seeking private psychiatric services. There is also insufficient transparency regarding the features of private health insurance policies for psychiatric care to enable consumers to make informed decisions about their health care. In particular, there is no one information source where a consumer can compare the different kinds of policies for psychiatric cover that might be available to them a significant problem when many private health insurance providers only offer limited coverage to begin with. To enhance the value of private health insurance to mental health consumers and to effectively address the needs of this vulnerable group of Australians, the RANZCP recommends that: the Government undertake a review of private health funds psychiatric cover with a view to improving transparency and understanding for consumers public education is essential to ensure that consumers are well informed of what level of cover they may require. In the case of mental illness, this includes raising public awareness of the risk factors associated with mental illness, the physical health needs of people with mental illness and that that symptoms can onset at any age. The RANZCP would be pleased to assist in the development of educational tools for consumers, carers, psychiatrists and health fund providers in this area. References Australian Bureau of Statistics (2008) 4326.0 - National Survey of Mental Health and Wellbeing: Summary of Results, 2007. Australian Private Hospitals Association (2015) Admission to private psychiatric hospitals. Medibank Private (2015) Hospital Cover. Available from: https://www.medibank.com.au/health-insurance/hospital-cover/. Private Health Insurance Administration Council (2015) Quarterly Private Health Insurance Statistics September 2015 RANZCP Submission to Department of Health Consultation on Private Health Insurance Page 5 of 6

Private Health Insurance Ombudsman (2014) State of the Health Funds Report. RANZCP (2015) Keeping body and mind together: Improving the physical health and life expectancy of people with mental illness. RANZCP (2015) Submission to the ACCC: Report to the Senate on Private Health Insurance. RANZCP Submission to Department of Health Consultation on Private Health Insurance Page 6 of 6