They have vouched for the importance of both public and private health care in meeting the health needs of the community. 

Without private health patients, public health waiting lists would lengthen and hospitals would have to find a way to make up for millions of dollars in funding.

The health experts feared the inflated costs would discourage many people with private health cover from continuing their policies, and deter others who might otherwise have considered it.

Yesterday the average cost of private health insurance premiums rose by an average of 5.59 percent.

More than 70 percent of Australians with private health insurance were expected to review their cover as a result.

Community members have taken to The Bendigo Advertiser’s social media accounts to say it’s an expense they can ill afford. 

Some have also questioned the need for private health insurance, with a public health service that provides quality care at minimal to no cost when it’s needed most. 

Medical providers are being faced with people’s displeasure at gap fees and policy exclusions, which is time and energy they could be spending on other aspects of patient care. 

But how much of this stems from a lack of understanding of private health insurance as a product?

Private pain for Bendigo hospitals

PRICING people out of private health insurance could cost Bendigo Health more than $9 million, leaving it reliant on increased government funding or forced to slash services. 

Chief executive John Mulder said private health insurance contributed more than $6 billion annually to the cost of private health care in Australia, most of which was performed in private hospitals.

“If people are forced out of private health insurance, that can only put more pressure on the public health system, which is already facing significant demand," he said. 

He said almost three percent of Bendigo Health’s revenue base was funded by private health insurance, which amounted to more than $9 million in the 2014-15 financial year. 

But the combined effect of insurance premium price hikes, effective from yesterday, and provider policy changes poses significant challenges to that income source. 

Mr Mulder said many private health funds were substantially reducing or removing the private room subsidy they had been paying public hospitals.

“This benefit has been worth around $1.2 million annually to Bendigo Health, money that goes towards vital public services for the community,” he said.

“Heath funds are not telling their members the benefit has been removed – that’s up to my admission staff, who convey the bad news on arrival that the patient’s cover no longer entitles them to a private room, if available.

“This upsets private patients and has them questioning why they are paying for private health cover and why they aren’t using the private hospital system, where a single room is more likely to be available.”

In a bid for transparency, Mr Mulder said Bendigo Health would start advising its patients of the benefits and entitlements of the hospital care each of the funds offered. 

“We won’t be recommending any particular fund, but the notices will clearly indicate some funds are looking after their members’ interests better than others,” he said.

Bendigo Health had 192,350 patients last year. 

Mr Mulder said more than 40 percent of Bendigo residents had private health insurance, about 17 percent of whom elected to use their cover upon admission to Bendigo Health.

The health service also had to contend with people’s dissatisfaction about gap fees, which occur when a patient is charged the difference between a service’s cost and contributions by Medicare and/or their health cover. 

“At Bendigo Health, we have been working with our medical consultants to minimise or remove gap fees wherever possible, as private patients are an important source of revenue for our business and we want to encourage their patronage,” Mr Mulder said.

He said he was aware families and individuals were struggling to meet the rising cost of private health care. 

“For some people in our community, the product is simply no longer affordable, and with annual premium increases at twice the rate of consumer price index (CPI), this situation won’t improve anytime soon,” he said.

He reassured people who couldn’t afford private cover that Australia had one of the best public healthcare systems in the world.

“And in Bendigo, we will soon add to this with the opening of our new world-class public hospital,” he said.

But hospitals throughout the state – and the nation – are facing tough times as governments slash health budgets.

Earlier this week the state government announced it was taking High Court action against the federal government ‘to recover the $73 million in funding… stripped from Victorian hospitals and patients.’

St John of God Bendigo Hospital director of nursing and clinical services Jayne Boyle said the Australian health care system was reliant on quality private and public health care services.

“The entire health system needs those who can afford to pay for private health insurance to take out the highest level of care they can afford with the least restrictions or exclusions, as the future health care needs for individual members are not predictable,” she said.

She said private health insurance had the benefit of providing members with immediate access to a private hospital with their choice of specialist care. 

“St John of God Bendigo Hospital works very hard to minimise or negate patient out of pockets costs related to their hospital stay,” she said. 

Private health insurance: Is it worth it?

The Bendigo Advertiser this week put a question to its Facebook followers: how much did they care about the rising cost of private health insurance?

Many were cynical of its value. But Bendigo-born mother of four Candice Bowles said private health cover was useful in many instances: “You have to know exactly what you want.”

“We've only got extras cover,” she said. 

Her family’s policy covers ambulance, optical, dental and physiotherapy. 

“Three of my four children have glasses – our annual excess premium virtually covers the cost of the glasses,” she said.

Mrs Bowles said the key to health insurance was to do your homework. 

She and her husband signed up to their policy in 2004, when their first child was born, and have stuck by it ever since despite pressure from the provider to change. 

“You’ve got to go through it all to make sure you’re getting the right benefits for you and every family is different,” she said.

Private health insurance premiums rose by an average of 5.59 percent yesterday.

Although the price hike coincided with April Fool’s Day, research commissioned by health insurance comparison service iSelect reinforced it was no laughing matter.

An average family policy will cost an extra $200 a year, according to their calculations.

The study found more than 70 percent of Australians with private health insurance planned to take action. 

Forty-six percent were keen to shop around for a cheaper deal, while seven percent planned to switch provider. 

The inflated costs range from an average of 3.76 percent to 8.95 percent, depending on the provider.

More than half a million Australians planned to dump private health insurance. 

Member for Bendigo Lisa Chesters said many people in her electorate were likely to be among them.

“I’ve already had people at listening posts say it’s a bill they just can’t afford,” she said. 

“They’ll still see doctors, but will pay as they go.”

Ms Chesters has called on the federal government to review the efficacy of private health insurance.

“It’s not just that there is not enough money in the household budget – there’s also now a question mark over whether it’s worth what people are paying.”

A medical expert’s opinion

Discouraging people from private health insurance could have disastrous consequences, a Bendigo health practitioner warned.

“Private health insurance protects the public system from being overwhelmed so people who can afford insurance keep themselves off public waiting lists and leave them for people who can’t,” said the practitioner, who requested to remain anonymous.

If people dumped private insurance en masse, he said waiting lists would blow out and ‘the whole system would collapse.’ 

“If you’ve got the money to be insured, I would be insured,” he said.

He said there were many factors influencing the rising cost of private health insurance, including new technology and life expectancy. 

People’s comprehension of health insurance was another issue.

The practitioner said people who found themselves with significant gaps between their rebates and service fees should query both their insurance provider and their medical practitioner. 

“Your gap is going to be bigger if you have a cheaper insurer… people don’t appreciate that,” he said. 

“Practitioners have various billing schedules as well.”

He recommended people examine their policies and inquire about rebates and pricing before using a service.

Research commissioned by health insurance comparison service iSelect revealed most Australians were unaware any waiting periods already served were protected by law if they switched to an equivalent or lower level of hospital cover. 

"This could mean many Australians are putting up with ongoing price increases instead of switching to a better deal... because they wrongly believe they will have to re-serve waiting periods,” iSelect spokeswoman Laura Crowden said. 

iSelect saw a spike in private health insurance inquiries following the private health insurance price hike announcement. 

The Australian Medical Association took a swipe at comparison sites when releasing its Private Health Insurance Report Card earlier this month.

“These comparator sites – which are marketed as ‘free’ comparison sites – can earn exorbitant fees per sale from the insurers,”  AMA president Professor Brian Owler said.

“These fees can make up a sizeable portion of the total insurance premium.

“There needs to be a greater level of transparency, and the Government and regulators need to scrutinize these sites.”

He said it was important people took it upon themselves to be better informed about health insurance.

“The AMA wants Australians to know their insurance product – and know it thoroughly,” he said.