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Health insurance: the problem with claims tied to the level education of the provider

Health insurance can be a driver for health treatment claims costs. Take this simple summary of the ear wax removal scenario sent to us by a person claiming on their health insurance. This is a common requirement for older people, and the claim situation indicates ways in which insurance may drive the wrong behaviour in procedure costs:

  • There are range of people competent to complete assessment of the need and to complete ear wax removal including, for example, registered audiologists, registered nurses and others such as enrolled nurses and presumably audiologists who, for whatever reason, might not be on the audiologist register.
  • There is a fee for the procedure. For example, Ear Health charge Gold Card superannuitants a discounted rate of $59.
  • A claim can be submitted to a major health insurer for the consultation and the procedure.
  • The amount the insurer will refund depends upon who does the consultation and procedure, up to approximately $200 for a registered audiologist, $30 for a Registered Nurse, and zero for anyone else that completes exactly the same procedure. We presume this is a cost control measure - but we suspect it is working precisely in reverse of how it is intended to operate.
  • Hence, competence is not the measure used to determine whether a claim will be admitted, and the rate of reimbursement, rather the educational / professional status of the individual doing the consultation and ear wax removal.

In our view, this leads to a perverse outcome as it appears on the face of it to be in the interests of the client to insist that an audiologist complete the procedure, even at a higher cost, if necessary, because the full cost can then almost certainly be claimed in contrast to the situation where a Registered Nurse or someone else does the work.

We think this is the worst outcome for everyone, as the audiologist spends expensive time doing menial work, the insurer pays out a higher amount, and the client presumably ends up with a risk of higher premiums or reduced discounted premiums because of claims.

One is tempted to suggest that somewhere a registered audiologist has already figured out that they could complete a very quick assessment, charge like a wounded bull, and passes the client on to someone else in-house to do the cleaning at no extra charge. Could other examples be given: of course.

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