by Niko Kloeten
Southern Cross funded 171,000 elective surgical procedures in the 2012 financial year, up 8% from 158,000 in the previous year as it saw its total spending on healthcare services for members increase to over $600 million.
During the year 108,000 members underwent one or more surgical procedures funded by their Southern Cross health insurance, including 1600 hip replacements, 6200 cataract surgeries and 16,200 colonoscopies.
Members’ claims for non-surgical elective services included 674,000 GP consultations, 50,000 ultrasound scans and 12,000 MRI scans.
For every $1 of premium income, 85.7c was returned to members in claims for healthcare treatment.
However, the number of members decreased 1.6% over the year to 822,422, reflecting an industry-wide trend.
Southern Cross chief executive Ian McPherson said non-public funders like Southern Cross provided significant relief to the public sector, by freeing up resources for emergency, acute and community health services.
McPherson said in the future, taking personal responsibility to fund elective healthcare needs will be even more necessary.
“Although the number of elective surgeries provided by District Health Boards is at record levels, so too is the demand for these services. This rising demand is being echoed in the private sector.”
For example, between April 2007 and March 2012, the number of orthopaedic procedures funded by the Society increased by 26% - though total membership remained static over that same period.
“Health budgets are coming under increasing pressure as the population ages, chronic conditions become more prevalent and treatment options expand. For the public system to remain sustainable, a significant change is required in how we pay for and provide non-urgent healthcare in this country.”
In February Southern Cross retained it’s A+ (Strong) financial strength rating from Standard and Poor’s for the tenth consecutive year. At year end its reserves equated to around seven months’ worth of claims costs.
Lower claims in the first half of the year resulted in a higher-than-planned surplus of $39 million, which will be used by the Society to mitigate future premium increases, to increase policy benefits and to maintain reserves at appropriate levels.
Southern Cross’s market share held steady at 61%, and the number of members on employer-subsidised schemes also remained level with 2011 numbers.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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