Rise of 20% in private health costs tipped

Press, 17 January 1986, Page 1

Rise of 20% in private health costs tipped

PA Wellington Private medical insurance premiums could rise at least 20 per cent because of the private hospital nurses’ wage rise, says New Zealand’s biggest medical insurer.

On Wednesday private hospital nurses gained wage increases of more than 30 per cent to maintain relativity with their public sector counterparts. The chief executive of the Southern Cross Medical Care Society, Mr Peter Smith, believes there will be consumer resistance to the rising cost of private medical insurance. Family membership of Southern Cross cost about $2OO a year in premiums. “It is pretty clear it is going to have to go to something more in the vicinity of $240,” he said yesterday. Southern Cross’s group of nine private hospitals was now looking at fee increases of between 20 and 25 per cent. Mr Smith said some of the bigger Auckland private hospitals were considering raising fees as much as 30 per cent. It was inevitable that the society’s premiums would have to rise as most private hospital patients were insured with the society, he said. The society’s membership stands at 960,000 after a record year last year.

Wages accounted for 70 per cent of most private hospitals’ costs. Private hospital domestic workers also have had wage rises of up to 22 per cent. Mr Smith said Southern Cross not only had to take into account the rise in private hospital fees but increases in doctor and anaesthetist fees as well. Premiums would probably increase about 20 per cent, but precise details had to be worked out. The society’s general manager, Mr David Turner, said the wage rise meant that the daily room rate at Southern Cross hospitals would rise $4O to $l5O. Theatre charges would vary, depending on the operation, he said. Southern Cross treats 20,000 patients annually and employs about 300 nurses. At Mater Misericordiae private hospital in Auckland, the daily room rate would rise to $159 from $120.50, said the executive manager, Mr Theo Peters. Theatre charges would rise from $l7O to $220 for a one-hour operation. Openheart surgery would cost

$2200 with recuperation in the intensive-care unit running up a daily bill of $5OO. Mr Peters said people with medical insurance would have to pay a substantial portion of the fee themselves if the cover paid even 80 per cent of the cost. The $26.50-a-day Governjnent benefit for surgical patients had been static for years. The Nurses’ Association’s northern regional officer, Miss Anne Moody, said the wage rises went some way to help poorly paid nurse aids, who were the backbone of private hospital care. A fourth-year aid grossed $236.26 a week before the increase and would now get $283.80, said Miss Moody. Many aids had given years of service and some were mothers who had gone back into the workforce, she said. Improvements in bereavement leave, sick leave and other issues were made in the settlement. Miss Moody said that while the settlement was not ideal, the issues would be discussed during the year.