Thinking Outside The Square: A Fresh Approach To Financing Older Peoples’ Healthcare Claire Austin Health Leaders Conference 4 May 2007

We are ageing better and longer Soon nearly a quarter of the population will be over 65 Soon nearly a quarter of the population will be over 65 Critical that health care in older age is timely – (Taskforce on Positive Ageing) Critical that health care in older age is timely – (Taskforce on Positive Ageing) Public health expenditure per capita: Public health expenditure per capita: –Age 15-64$1,190 –Age 65-74$3,261 –Age 75-84$6,144

Key Factors That Contribute To Positive Ageing Having a positive attitude Having a positive attitude Being adaptable to life changes Being adaptable to life changes Maintaining autonomy and having the freedom to choose Maintaining autonomy and having the freedom to choose Staying involved – community, friendships, social contact Staying involved – community, friendships, social contact Staying active Staying active Ageing is Living – Age Concern New Zealand, 2006.

Public Perceptions Health Insurance and Older People Ageist and discriminatory Ageist and discriminatory No loyalty for investment No loyalty for investment Health insurance should be life-long contract Health insurance should be life-long contract Greedy insurers Greedy insurers Premiums hike when reaching 65 – when you need access to health care the most Premiums hike when reaching 65 – when you need access to health care the most

Risk Rating and Community Rating Community rating – Australia All ages in the pool – spreads the cost and risk across all ages All ages in the pool – spreads the cost and risk across all ages Rebates as incentives to attract younger people Rebates as incentives to attract younger people Risk equalisation scheme Risk equalisation scheme Increased rebates for the 65+ and 75+ age groups Increased rebates for the 65+ and 75+ age groups

Risk Rating and Community Rating Risk rating – New Zealand Risk rating – New Zealand No rebates or incentives No rebates or incentives Unable to pool risk beyond age bands Unable to pool risk beyond age bands Claims and costs drive up premiums Claims and costs drive up premiums One in three older people were claiming for surgery annually (major medical) One in three older people were claiming for surgery annually (major medical) 75% of premium written in NZ – through not for profit organizations 75% of premium written in NZ – through not for profit organizations

What Can Reasonably Be Expected From The Health System? Unlikely a tax funded system will be able to provide full universal cover Unlikely a tax funded system will be able to provide full universal cover Growing pressure upon services internationally Growing pressure upon services internationally Importance of timely access - impact upon personal, social, health and economic well-being Importance of timely access - impact upon personal, social, health and economic well-being

What could be done differently? Grant or rebate for those over 65 holding health insurance: Provides timely access to care Provides timely access to care Makes health insurance affordable Makes health insurance affordable Costs of claims can be covered Costs of claims can be covered Relief upon the public system Relief upon the public system Fiscally neutral to the Government Fiscally neutral to the Government

Opportunities Look at alternative ways to resource health care insurance rebates for older people, scrap FBT workplace schemes Look at alternative ways to resource health care insurance rebates for older people, scrap FBT workplace schemes Public/private collaboration, eg: planning around electives Public/private collaboration, eg: planning around electives Use capacity across the whole system Use capacity across the whole system Smarter purchasing across the whole sector (manage costs together) Smarter purchasing across the whole sector (manage costs together) System wide quality and research – effective, timely, patient-centered care. System wide quality and research – effective, timely, patient-centered care.