Health insurance key to accessing new and innovative treatments

2018 saw the number of New Zealanders with health insurance pass the 1.4 million mark for the first time in more than 20 years. If we look back over the last couple of decades, it’s easy to see the technological leaps that have been made in almost every field, and health insurers are now funding many procedures that didn’t even exist a few years ago.

Back in the latter part of the last century, when New Zealand was a land of three million people, 1.4 million would have represented close to half the population having health insurance. Most policies in those days were for comprehensive cover, reimbursing things like GP visits and dental check-ups. This was likely a carry-over from the time earlier last century when it would cost a quarter of a worker’s weekly wage to see a GP or dentist, prompting the formation of friendly societies – the forerunners of our current health insurers. Even today, three out of four people with health insurance are with a not-for-profit insurer.

Today 1.4 million people represents just under 30 percent of our almost five million population, and most current health insurance policies are for major medical or surgical and specialist cover – the big-ticket items that most people can rarely afford out of their own pockets.

Insurers are funding an increasing range of treatments, and process more than a million claims a year from about 500,000 individuals. The volume and vast array of treatments, plus ongoing medical inflation, are the main reasons for claims growth in recent years, with claims paid now well over $1.2 billion annually.

As we know, common procedures these days are often done via keyhole surgery, but some procedures are increasingly being done by robot. Developments in prosthetics mean bionic body parts are not just the stuff of 1970s TV shows. New Zealand alone is home to over 130 medical device companies all working on new technologies, and new drugs and procedures are constantly being developed to improve health outcomes across all areas.

Some New Zealand health insurers cover developments such as implantable cardiac monitors to detect irregular heartbeats, non-Pharmac funded cancer drugs, and even pay for policyholders to travel overseas to have treatments not available yet in this country.

Deloitte’s 2018 Global Health Care Outlook report noted public and private health systems would continue to face financial pressure due to increasing demand, particularly by an ageing population, infrastructure upgrades, and therapeutic and technological advancements. It said hospitals of the future will rely on digital and artificial intelligence, using image-guided surgery computer systems, synthetic biology, 3D printing, and nanotechnology. These are the kinds of things health insurance could be funding in the future, and one can only imagine they will not be cheap.

Much has been written lately about how genetic testing is changing healthcare and how genomics could lead to the possibility of personalised treatment in the future. Personalisation means no economies of scale, so we can expect medical inflation to rise even further as these new developments come to hand.

With New Zealand’s ageing population already threatening to overwhelm the underfunded public health system, and the most innovative new procedures and drugs being funded and delivered first in the private health sector, it makes sense to have health insurance.

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