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Medibank Private shows hospital visits and cost of care soaring

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Australians are being admitted to hospital more often and at greater expense than ever before as the population ages and gets sicker, Medibank Private says.

New analysis from the nation's biggest health fund shows that the average annual amount paid for hospital visits by its 3.9 million year has risen 34 per cent from 2010 to 2015.

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This has been driven by a 20 per cent rise in hospital admissions per member coupled with a 12 per cent increase in benefits paid per admission due to the soaring cost of medical care.

The age-group driving the bulk of the rise in admissions is 55 years-plus.

Medibank chief executive George Savvides said that the cost pressure is being felt across the entire healthcare sector.

"The costs of healthcare are rising; Australians are going to hospital more often than they were five years ago, patients are receiving more services and treatments when they're admitted, and treatments are generally becoming more expensive," he said.


Admissions rise

On average, the number of hospital admission per Medibank member has risen 3.7 per cent a year for the last five years.

In the year to June 2015 Medibank paid out more than 1.2 million claims for hospital admissions and procedures at a cost of $3.47 billion, a 3.4 per cent increase on 2014.

The data has been released by Medibank in the middle of a federal review into private health insurance and in the wake of Medibank's huge $100 million profit upgrade.

When announcing the profit upgrade, Medibank pre-empted Health Minister Sussan Ley's demand that health funds either lower their requested annual premium increases or justify their initial requests by resubmitting a lower premium request.

The rise in hospital episodes comes as consumer outrage over surging insurance premiums is seeing older patients, who require much high levels of care, ditch hospital cover.

According to the latest Australian Prudential Regulation Authority data, 11.3 million people, or 47.3 per cent of the population, had hospital treatment cover in the three months to September 2015, down 0.1 per cent on the June quarter.

St John of God Health Care chief executive Michael Stanford said that this data was very significant if it became a trend.

"For the first time I can remember the number of people who are dropping out of insurance exceeded the number going into insurance and that is a significant concern for us because people are dropping out as the population is ageing," he said.

"There is no doubt that once people past their 40s they start going to hospital more and over 50 it really kicks up. It is really profound if people over 50 start to drop out [of private health cover]. It is definitely the case that ageing relates to the number of things that can go wrong, the number of admissions, and the severity of admissions."

The non-profit St John of God group is Australia's third-biggest private hospital operator with more than 3000 beds across 23 facilities.

Poor job

Mark Doran, the chief executive of non-profit hospital group Calvary Health Care, said that Australia's health system was doing a poor job of managing care-intensive elderly people in their final years of life.

"On average someone dying will have seven admissions to hospital in their last year. Something is not right," he said.

In the 55+ category, hospital admissions are up 20 per cent on 2010 admission rates, and the average benefit is up almost 27 per cent.

Mr Doran said that better storing and sharing of data and medical records, and more investment in community services such as palliative care and aged care, are crucial to address the huge number of late-life admissions and deaths in hospital.

A breakdown of Medibank's claims data shows that, in the five years from 2010 to 2015, the number of eye surgeries has grown 15.3 per cent, sleep studies are up 12.6 per cent, chemotherapy is up 5.4 per cent, and hip and knee replacements are up 4.4 per cent.

The most common three overnight procedures Medibank paid for in the year to June 2015 are childbirth, rehabilitation, and knee replacements.

The most common same-day procedures over the same period are colonoscopy, chemotherapy, and dialysis.

Across age groups, young Australians aged 18 to 34 are going to hospital 3.9 per cent more often than five years ago and the benefit paid per admission is up 39.1 per cent.

In the bracket 35 to 54 age bracket admissions are up 7.6 per cent and Medibank is paying 14.2 per cent more per admission.