Means testing could cost Valley specialists

Latrobe Valley faces the potential loss of private medical specialists if the private health insurance rebate is means tested, according to a local private health insurer.

Latrobe Health Services managing director Bruce Beatson told The Express the private sector encouraged particular specialists to regional areas and if predictions of a drop-out rate from private health insurance funds of between one to seven per cent eventuated, “that it was a real concern, certainly for this area”.

Latrobe Health Services is a not-for-profit private health insurer covering about 75,000 people. It also owns the Maryvale Private Hospital.

“It has taken us a long time to build up a good specialist base with a reasonable private patient market and without it, we are likely to lose those specialists from the area,” Mr Beatson said.

The private sector had bought “supported resident specialists” to the Valley, all of whom practiced privately and publicly, and a drop in private patient loads would limit opportunities for specialists to “practice their craft,” Mr Beatson said.

Federal Member for Gippsland Darren Chester said the 45,500 Gippsland residents covered by private health insurance would be hard hit by a means test on the rebate, set to affect singles earning more than $83,000 and families earning more than $166,000.

He said it was estimated 1.6 million Australians would drop their private hospital cover and another 4.3 million would downgrade their cover.

Mr Beatson said speculation on a local impact was difficult given it required estimating the incomes of individual households in an area. Referring to this region’s comparatively low income levels, he said “my feeling is we probably won’t be as affected as some of the funds in major metropolitan areas”.

“In rural areas, average incomes are lower than in metro areas so one would suspect there won’t be the same effect (on drop-out levels).”

Mr Beatson also predicted Maryvale Private Hospital was unlikely to see an early drop in demand.

“It really depends on what the government’s attitude is to the future of private health…at some stage they have to take a serious look at it,” he said.

Mr Beatson said extremes in public and private mixes were unsustainable but a ‘mixed sector’ “works well” and governments should favour bipartisan policies over “ideological-based arguments “.

Asked whether a drop in numbers of private health insurance members was likely to see remaining members hit with premium increases, Mr Beatson confirmed it would.

“It’s not only those that leave private health insurance but those that may downgrade (their cover)…so if the overall income is down, then it is not about commercial profiteering, it is about cost recovery,” he said.

Mr Chester said a decision to means test the rebate would “place extra pressure on the public hospital system”.

“It’s estimated that 845,000 new procedures will be forced onto the public hospitals system, putting further pressure on waiting lists,” he said.