"I have been trying to make insurance famous for the last twenty years in Australia"
Damien Mu, CEO of Australia and New Zealand...before reflecting on the exposure created by the Australian Royal Commission, and then on how the current performance of the industry is something of a burning platform, and plunging positively into the conduct conversation.
Rob Everett, Chief Executive of the FMA, reflecting on the recent thematic reviews by the FMA and current work with the RBNZ, in contrast to the Australian Royal Commission said they were focused.
"...less on trying to find a rare, but dramatic, failures. Instead more focus on what happens day by day"
Rob added, tellingly, that it is what your staff do when they are not being watched which shows the extent to which your organisation is committed to good conduct. Rob's speech on conduct obligations was balanced and interesting. It is difficult to strike the right tone when there are a variety of levels of participation and engagement in the conduct conversation. His talk reminded me to explore the interplay between what conduct means as distinct from personalised financial advice, as both often intersect at the point of suitability assessment.
"We're at half-time and we're at nil all"
Rob Flannagan, Chair of the Financial Services Council, making a rather self-effacing statement about the value of the just-launched FSC Code of Conduct. In fact the decision to develop the Code as a central activity in the redevelopment of the FSC is a great example of leadership, not fully acknowledged in a score line of 'nil all'. However, Rob was making the point that the Code has to be followed up by development of guidance, training, and monitoring. That is something I know is happening, having spent some time on replacement business recently.
Another data-rich press release from HFANZ: May 4, 2018
Health insurance growth continues, claims paid hit $1.2 billion
New Zealand’s health insurance industry recorded its twelfth consecutive quarter of growth in March 2018, with lives covered reaching 1.385 million and claims paid topping $1.2 billion, the Health Funds Association of New Zealand (HFANZ) said today.
Announcing its latest statistics, HFANZ chief executive Roger Styles said there was an increase of 2400 lives covered in the March 2018 quarter, and an increase of 20,100, or 1.5 percent, for the 12 months to March 31, 2018.
“This is the twelfth straight quarter of growth in lives covered, with 2017 showing the strongest annual growth in lives covered since 2001. Much of this growth appears to have come from an increase in the numbers of people with employer-subsidised health insurance as part of an increased focus on wellness in the workplace,” he said.
Health insurance paid out $281 million in claims for the March 2018 quarter, up 8.6 percent on the previous March, and $1.207 billion for the March 2018 year, up 5.4 percent – or $62 million – on the 12 months to March 31, 2017.
Mr Styles pointed out that in 2008 the annual claims total was $631 million, so that amount had doubled over the decade.
“People now have access to both a greater volume and a wider range of services and treatments through health insurance,” he said.
“Given media coverage is dominated by various demands on the public health sector budget, it’s easy to overlook the significant and growing contribution to healthcare funding which health insurance provides in New Zealand.”
Premium income for the March 2018 quarter totaled $373 million, up $4 million on the December 2017 quarter. Annual premium income for the year to the end of March was $1.454 billion, up 5.5 percent or $76 million, on the March 2017 year.
The Health Funds Association Annual Review can be found at this link. Some highlights below:
Lives covered up 23,800 or 1.8 percent for the year;
Premium income of $1.379 billion for year ended 31 March 2017, up $82 million (6.3 percent) on March 2016 year;
Claims paid for March 2017 year of $1.150 billion up $99.4 million (9.5 percent) on March 2016 year claims.
HFANZ received a report on the net impacts of health insurance in New Zealand, carried out for the industry by Wellington consultancy TDB Advisory. Unlike previous research projects which have sought to look at the impacts of particular policy initiatives, such as subsidies, this work provides a broader assessment of the net impacts of PHI in New Zealand, compared with the counterfactual (i.e. what things would be like in the absence of health insurance). Despite very conservative assumptions, the report finds the existence of PHI results in significant net benefits for New Zealand. These include:
An improved level of health coverage and outcomes;
Productivity benefits equating to around $100 million annually;
Net positive fiscal impact of around $0.4 billion annually
You can read the release from the HFANZ on insurance meeting the shortfall in funding for surgery. But before you do, it begs a question: is there a shortfall?
Well, you don't have to take my word for it. Read this.
Insurance can help meet surgical shortfall - HFANZ
The Health Funds Association (HFANZ) says tens of thousands more New Zealanders could be getting timely access to surgery each year if the Government looked seriously at measures to boost health insurance coverage.
HFANZ chief executive Roger Styles made the claim in the wake of yesterday’s release of data showing thousands more people missing out on surgical assessments across New Zealand in the December 2015 quarter.
“Health has had massive funding injections from Government but the system can’t cope by tax funding alone. People are falling through the cracks in the public system, while we have a private health insurance system which is massively underutilised, with just 29 percent of people covered,” he said.
The Ministry of Health’s National Patient Flow showed more than 20,000 people had their surgical assessments declined, delayed or transferred in the December 2015 quarter – a level similar to that in the September quarter.
“It’s time for the Government to start making better use of private funding sources like health insurance, which has huge potential to relieve pressure on the public system. It currently contributes $1 billion annually to total health expenditure and has the capacity and ability to do much more. New Zealanders with health insurance gain prompt access to treatment when they needed it, with no wait for surgery.”
In the last year, insurers’ healthcare claims rose by $54 million, mostly for elective surgery, Mr Styles said.
District Health Board data released today has confirmed more and more people are waiting for elective surgery.
The Health Funds Association of New Zealand (HFANZ) says the latest specialist referral figures from the Ministry of Health confirm two key trends:
The level of unmet need is increasing;
The considerable additional investment in health is only keeping pace with the growth in demand.
HFANZ chief executive Roger Styles said the figures were consistent with the association’s own research, which showed up to 280,000 people were waiting for surgery.
“The numbers reported by DHBs are in line with our research,” he said. “More and more people need surgery, but our public system is stretching just to keep pace with growing demand, while less urgent cases have to wait longer and longer.
“What the DHB figures don’t show is the gap between referrals and surgery. The gap between needing and getting surgery is unmet need, and that’s growing.”
Mr Styles said the ministry’s assessment of unmet need was lower than HFANZ’s, but the trend was unmistakeable.
“More people are waiting for surgery and they are waiting longer,” he said.
Health Funds Association of New Zealand - MEDIA RELEASE from 7 March 2016.
Referred elective surgery need just the tip of the iceberg
The Health Funds Association (HFANZ) says the Government has made a good start in measuring the unmet needs of New Zealanders referred for elective surgery, but stresses that this subset of unmet need is part of a much bigger picture.
Government figures released today show thousands of New Zealanders are going without the surgery they need due to an overloaded public health system.
“While measuring referred unmet need is important, it is just a small slice of total unmet need,” HFANZ chief executive Roger Styles said.
In 2013, HFANZ conducted research which indicated that while around 110,000 New Zealanders were officially waiting for elective surgery, there were another 170,000 requiring surgery but who were not on any list.
“These are people who need surgery and may be in pain, but whose GP has not referred them on the basis that they are unlikely to meet the public sector threshold to get it within four months.
“Health Minister Jonathan Coleman is right when he says that the best way to meet unmet need is to carry out more surgeries. Growing demand for elective surgery needs to be addressed and one way of doing this is to improve access to elective surgery via health insurance,” Mr Styles said.
“New Zealand has a strong public health system that deals well with emergency, maternity, mental health and life-threatening conditions. The private health sector complements this system by relieving pressure for elective procedures and in a more timely fashion.
“Our members’ message to Government is simple: the private health sector is here to support, not undercut, the public system,” he said.
“Elective surgery wait times do not need to get worse before they get better.”
HFANZ said health insurance had funded more than 150,000 elective surgical procedures in the past year, but with increased demand, there was the capacity and the willingness to do much more.
Results from HFANZ’s 2016 research into this need will be released later this month.
In his incredible work of observational economics ("The Wealth of Nations") Adam Smith identified the tendency of business folk to collude. Since then it has been accepted that consumers have generally been better off when companies from the same industry do not talk to each other too much about certain things. But there are limits, and sadly, New Zealand is exploring those limits.
The only patchy coverage of the market that will remain if both the HFANZ and FSC lack major industry players from their memberships renders market data almost useless. Market data has been one of the main reasons for membership. Lobbying on common issues, such as potential legislation, promotional campaigns, standards, and tax matters are other useful services, but are less reliably valuable. These too will all suffer if reconciliation cannot be managed.
It would be a great shame.
But the associations cannot simply stand back and wait for insurers to return. They need to look hard at the value they deliver for the cost of membership. They also need to have better rules to manage friction between members. Recent disagreements should not form a long-run barrier to future co-operation - the next couple of issues to face insurers may see them all line up together to deliver a better outcome for all New Zealanders rather than splitting down the lines of different distribution channels as they have in the past.
The economics could be improved if the Healthfunds organisation were part of the FSC.