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Southern Cross Health latest claims statistics revealed

Find out the biggest claims paid out by Southern Cross Health over the years. 

Friday, June 5th 2020, 10:49AM

Southern Cross Health has released its latest half-yearly Pulse report which details how much it has paid out in claims and what procedures members are claiming for.

The group's membership as stayed remarkably static over the over the past two years sitting at 870,263 in September 2018 and rising to 880,089 in March this year. However, the amount paid out per dollar of premium has fallen from 92c in each $1 collected to 86.1c over this two year period.

"In any given period, there are a number of factors at play in terms of how much of every dollar received in premiums is returned to our membership," chief executive Nick Astwick says. "These include the fine balance between offering maximum value for money to our members and ensuring the affordability of premiums."

"At the same time, the cost of private healthcare continues to rise as a result of funding more procedures and the ongoing impact of medical inflation. Meanwhile, the public system is under increasing pressure," he says.

"As a not-for-profit friendly society, Southern Cross exists for its members and our primary focus is on delivering value for an 880,000-strong membership."

From a six monthly perspective, other influencing factors may include seasonality, market impacts (such as Covid-19), pricing and claims processing times.

Astwick says: "The Society has a target range of return and the returns covered by our Pulse Reports all fall within this range."

Southern Cross Health Society continues to deliver a very strong rate of return compared with other health insurers. In FY19, we paid 89 cents in the dollar, while the average rate of return among other New Zealand health insurers was 67 cents in the dollar; with some returning as little as 60 cents in claims for every dollar received in premiums.

To give some context, if Southern Cross paid 60 cents in the dollar, we would have paid out $315.5 million less in claims. In fact, the Society paid for 73 per cent of all health insurance claims costs by value in New Zealand in FY19, despite Health Society members representing only 62% of lives insured in the country.

In relation to the top three specialties by cost, these represent the three speciality areas which had the greatest amount funded by Southern Cross in terms of claims.

Top three specialties by cost

March 20 Sept 19 March 19 Sept 18
Orthopaedic  $107.25m Orthopaedic $114.7m Orthopaedic $101m Orthopaedic $104.7m
Imaging & Tests  $59.60m General Surgery $103.2m General Surgery $88.5m General Surgery $94.8m
General Surgery $49.91m Imaging & Tests $61.1m Imaging & Tests $55m Imaging & Tests $56.6m

The top three are usually relatively consistent, however, due to a change in reporting in March 2020  (General Surgery was split into General Surgery and Endoscopy) this has changed.

Much of what was previously grouped under General Surgery now has its own category, hence the large decrease in General Surgery costs.

For example, in the 2019 calendar year we funded over 550 spinal fusion procedures. These generally form some of our most expensive procedures, as evidenced by the top three in the latest Pulse Report, but there is wide variation in cost, with some procedures costing significantly less than others.

However, when it comes to the top three highest cost claims paid in each of the four periods covered by the Pulse reports, nine of these places were for spinal fusion; tracheostomy took two places and the final place was a $165,222 gastrectomy claim.

For the current reporting period (Oct – Mar 2020), Southern Cross funded 276 spinal fusions and there were 290 funded in the previous period (Apr – Sep 2019).

GP minor surgery has traditionally been excluded from the top three as it is a mix of services delivered through GP consulting rooms. A large amount of the volume comes from skin procedures which is already in the top three.

In the six months to March 31 this year Southern Cross paid out:

  • Total claims $562.22 million
  • Funded 132,752 Surgical Procedures
  • Paid for 357,272 GP visits and 248,733 Specialist Consults 
  • And covered 305,843 Prescriptions.

In the six months to September 30, 2018 it paid out: 

  • Total claims $567.1 million
  • Funded 124,897 Surgical Procedures
  • Paid for 383,223 GP visits and 253,361 Specialist Consults
  • And covered 379,296 Prescriptions.



Tags: health insurance Southern Cross

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