Consumer perceptions on basic hospital cover and a new bronze minimum standard
Agenda Study aim and methodology Context and purchase of basic hospital insurance Experience of having basic hospital insurance Response to the proposed introduction of the new categories of cover and bronze as a minimum level of cover Conclusions and recommendations
The study we present today was designed to provide the Private Health Ministerial Advisory Committee with an evidence base to support decision-making on the possible introduction of bronze, silver and gold categories of private hospital insurance cover, and a shift to the bronze level of cover as a new minimum hospital insurance product. Fieldwork consisted of 22 group discussions, 10 depth interviews and an n=1,026 online survey undertaken with basic hospital insurance policy holders in June 2017.
Recruitment of Previous research has indicated that many people do not understand the level of hospital cover they hold. Hence people recruited for this study study participants were identified as ‘basic hospital insurance’ policy holders based on the level of premium they paid rather than their perception of their level of cover. The premium thresholds used for recruiting the participants were provided by the Department of Health. These were based on statistical analysis of 2017 private health insurance premium round data. The premium threshold accounted for: • policy type (i.e. single, couple, family) • jurisdiction of residence, and • eligibility for the Private Health Insurance Rebate — this incorporated different levels of rebate according to the participant’s: household income, and age.
Qualitative The qualitative methods comprised 22 x 1.5 hour group discussions comprising 5-7 people and 10 in depth interviews, each involving one methods person and lasting one hour. All participants were recruited as being basic hospital cover holders with the exception of 3 groups of ‘potentials’. The sample was segmented by: • How long people had held their cover for: + / - 24 months • Life stage: young and midlife singles & couples (+/- 30 years of age), midlife families & older Australians (65 years plus) • Gender: separate groups were held for men and women where population levels allowed for this • Income: +/ - MLS brackets • Location: Perth WA, Melbourne VIC, Bendigo VIC, Gold Coast QLD, Brisbane QLD, Adelaide SA, the Adelaide Hills SA, Sydney NSW and the Central Coast, NSW.
A quantitative method was adopted to add a level of depth of rigour to this project and enable the Private Health Ministerial Advisory Committee to make broader generalisations about the population. A 10-minute online survey of a nationally representative sample of 1,026 Australians with basic hospital cover was adopted to further understand the drivers and barriers of hospital cover take up and response to the bronze product. Quantitative sample (online survey) Gender n= % Males 515 49% Females 509 51% Age Invites were sent nationally representative and natural fallout allowed based on basic hospital cover uptake 18-24 79 12% 25-29 109 10% 30-39 279 18% 40-49 211 18% 50-59 163 15% 60-69 118 13% 70+ 65 14% Location Invites were sent nationally representative and natural fallout allowed based on basic hospital cover uptake Victoria/Tasmania 295 28% New South Wales/ACT 349 32% Queensland 174 20% South Australia/NT 104 9% Western Australia 102 11% Greater Capital city areas 751 70% Regional/rural/remote 273 30%
Context and purchase of basic hospital insurance
The public system: just as good… but ultimately not to be relied upon a: 68 Drummond Street, Carlton Victoria 3053 p: +61 (0)3 8648 3418 w: wheretoresearch.com.au e: info@wheretoresearch.com.au
Taking out private hospital insurance: Peace of mind, shorter waiting times, knowing they would be covered in a private hospital and being able to choose own doctor were the main reasons for selecting private health insurance. Type of Cover Extras Cover Age Yes 18-24 25-39 40-59 60+ Single Couple Family No 61% 68% 50% 59% 70% 55% 68% 61% 62% 58% Peace of mind 59% 59% 41% 56% 82% 57% 68% 53% 61% 56% It allows shorter waiting times for treatment 49% 53% 31% 49% 67% 45% 58% 47% 50% 47% Knowing I would be covered in a private hospital 38% Being able to choose my doctor 30% 23% 36% 61% 31% 53% 33% 39% 36% 31% Avoid Medicare Levy Surcharge 10% 38% 40% 23% 31% 29% 34% 34% 23% 28% 5% 15% 28% 52% 29% 38% 16% 25% 36% Because of my age 26% Avoid Lifetime Health Cover premium loadings 19% 33% 28% 21% 27% 23% 29% 30% 17% 21% Public system doesn’t provide adequate access/care 26% 15% 24% 20% 20% 22% 20% 22% 19% 20% 9% 14% 20% 31% 20% 23% 18% 21% 19% Being able to get the Private Health Insurance Rebate 14% Everyone I know has private health insurance 29% 20% 9% 8% 16% 11% 15% 15% 11% 8% To have a baby / for my kids 8% 16% 7% 1% 3% 3% 21% 10% 3% 2% 1% 0% 2% 3% 2% 1% 2% 2% 2% Other C.2. From the list below, please select all the options that reflect your thoughts and capture why you took out private hospital cover Base: Total, n=1,024; Aged 18-24 n=79, 25-39 n=388, 40-59 n=374, 60+ n=183 Single cover n=418, Couple cover n=278, Family cover n=328; Have extras cover n=771, No extras cover n=253
Young people in their 20s tended to assume they would not need hospital care in the near future (except for existing health conditions, sporting injuries). Families told us that the birth of a child and the subsequent need to cover their children was a key driver to initial take up cover – and finishing a family the cue to take up of basic cover. Midlife singles / couples were similar in attitude to families, but without the additional emotional driver that children provided (or the driver to taking out top cover that obstetrics gave). Older Australians typically saw private health insurance as something were now ‘in for life’.
Taking out basic hospital insurance: some guided by what is cheapest, others looked for (or were nudged) by a complex combination of factors. It appeared likely that no one factor overwhelmingly decided their ultimate cover outcome, or that they necessarily had full control over the process. Type of Cover Extras Cover Age Yes 18-24 25-39 40-59 60+ Single Couple Family No 39% 19% 30% 37% 59% 38% 52% 27% 40% 37% Got the highest level of cover I could afford 39% 30% 30% 35% 56% 36% 49% 32% 38% 40% Knowing I was going with a reputable insurance brand 32% 53% 24% 31% 31% 26% 37% 35% 34% 25% Get better quality care 23% 19% 25% 28% 18% 28% 21% 19% 21% 29% Got the cheapest level of cover I could 18% 36% 13% 16% 16% 19% 15% 19% 18% 17% Wouldn’t need cover for the conditions that weren’t listed on my policy 14% 27% 13% 11% 11% 13% 10% 19% 15% 10% Wouldn’t need cover for the conditions that had restrictions on them 13% 19% 13% 13% 11% 8% 14% 20% 15% 8% Careful analysis of the product disclosure statements 13% 10% 16% 12% 12% 11% 11% 17% 13% 11% Cover that the comparison website suggested 11% 11% 11% 10% 10% 9% 11% 12% 11% 8% Proximity of nearest public or private hospital 10% 14% 8% 10% 10% 11% 6% 13% 10% 10% Limited access provided by restricted cover was sufficient for my needs 7% 5% 6% 8% 7% 8% 5% 6% 6% 8% Don’t know / can’t recall 5% 15% 6% 4% 2% 7% 4% 5% 6% 4% First cover I came across when I searched online 4% 2% 3% 4% 6% 4% 4% 4% 4% 3% Other (specify) C.4 Why you took the cover you chose? Base: Total, n=1,024; Aged 18-24 n=79, 25-39 n=388, 40-59 n=374, 60+ n=183 Single cover n=418, Couple cover n=278, Family cover n=328; Have extras cover n=771, No extras cover n=253
• Cheapest level of cover (23% quantitatively) vs best quality care they can afford (39% quantitatively). • Judging and juggling private health cover options and Between basic and what else? broader household budget. • Not necessarily aware of the range of options. • No one wanted to believe that they were making a decision on price. • People found the information search process difficult: Difficult to find information ‘health insurers hold all the cards’. and compare • ‘Potentials’ claimed that difficulty in understanding and comparing products was a key barrier. Impossible to judge risk • Impossible to judge risk.
The quantitative study confirmed the lack of confidence people have in their knowledge of their cover… the following chart shows response to a question asking how unsure/confident respondents felt about their knowledge about what they were covered for 4% 21% 26% 42% 6% Overall 18-24 years 2% 17% 22% 55% 4% 25-39 years 4% 25% 28% 38% 4% 40-59 years 7% 25% 28% 38% 4% 60+ years 3% 15% 23% 48% 11% 1 - Very Unsure 2 3 4 5 - Confident B.8 Using the sliding scale below, slide the button to the position that best represents how you feel about your knowledge about what you are covered for with your current private health provider… Base: Total, n=1,024; Aged 18-24 n=79, 25-39 n=388, 40-59 n=374, 60+ n=183
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