Lars Bojsen-Moller (Chief Operating Officer - Marketing and
Distribution) took to the floor first up, a really interesting, knowledgeable man,
who has been around the world several times comparing
the world's public health and health insurance systems. I have broken
down as best as I can his hour long presentation.
·
Southern Cross has 61% of the NZ market share.
·
Grew by only .08% last year.
·
Processing 2000 claims a day at $2.8 million.
· Southern Cross has had an A+ Claim rate for 9 years in a row.
·
Southern Cross had 12% fewer cancellations last year.
·
They have the biggest Adviser Group and were
happy to report that Group Schemes were on the rise.
However, on the negative side:
Unfortunately, NZ Health Insurance overall is in decline and
has been for the past 3-4 years. This is a direct result of people’s disposable
income being increasingly under pressure and the amount of redundancy
increases. Also, confidence in Insurance
Companies is at an all time low across the board.
 |
| Lack of disposable income among Kiwis is hurting the Health Insurance Industry. |
Lars spoke with much passion and at great length about a
significant problem we are having with specialists/surgeons overcharging and the
perception from members and the public that the more the surgeons/specialists charge, the more it must mean
they are “the best”. From the statistics, this is not entirely the case. Private practitioners have
made sure they have greater demand than supply and have been able to apply this
for a long time, by setting their price structure high, and this is not about
to change in the foreseeable future. I guess what this means for Southern Cross and the Health Insurance industry is
they are being effectively caught in the middle of paying too much and keeping
up with meeting member expectations. This will take a long time to remedy, the
surgeons and specialists are happy, very happy actually, and the members don’t care about cost as long as they can claim 100% of their procedure, Southern Cross unfortunately are
left paying as necessary for procedures that are boosted in price by surgeons and private health care providers. You can understand Southern Cross’s frustration.
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| The cost being charged by private surgeons is doing damage to the health insurance business, according to Lars Bojsen-Moller. |
A recent survey showed most Aucklanders refused to receive private
treatment outside of Auckland. North Shore people refused to even receive
treatment over the Harbour Bridge. Auckland is by far the most expensive city
in NZ for any private procedure and that’s because quite simply, they just can
be. For example: A knee replacement
would cost $17,990 in Marlborough and a whooping $26,029 for the exact same
procedure in Auckland. The interesting fact is that if anything was to go
wrong in Private Surgery/Hospital you end up in the Public hospital!
A lot of Auckland Private surgeons/specialist aren’t willing
to contract with Southern Cross, they are price setting and getting away with
it. However Southern Cross has contracts with some affiliated providers and this is
when you swipe your card and the specialist involved sorts out your prior approval
etc which has been the case for quite sometime and which they are hoping to spread further throughout the health care system. If this goes the way Southern Cross wants it to, they believe it will end up helping the public and make a positive impact on mitigating the stresses involved with health insurance prior approvals.
In the next part: We'll see what other initiatives and changes Southern Cross are looking at implementing, some statistics on claims, and how these changes will affect you as insurance clients.
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