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Southern Cross Reports Deficit, Cites Rising Costs As Issue

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Oct 13 NZPA - Southern Cross Medical Society has highlighted the rising cost of health services in an annual report which reveals claims increasing faster than premiums.

The largest healthcare insurer in this country earned $544.2 million in premium income, up 4 percent on last year, and incurred $525.6m in claims, up 13.2 percent.

With claims increasing faster than premiums, the proportion of premiums returned to members through claims grew from 88.7 percent a year ago to 96.6 percent.

The deficit for the year to June 30 of $14.4m was larger than expected because of claims costs.

"The ability of New Zealanders to access private healthcare may come under increasing pressure if treatment costs continue to rise at current rates," chief executive Ian McPherson said.

He said increased demand from members for surgical procedures and rapidly rising charges from healthcare providers each accounted for roughly half of the increase in the society's claims costs.

The society is a not-for-profit organisation operating for the benefit of members. It funded 150,000 elective surgical procedures in the year under review. The society has 843,122 members, and covers 60 percent of New Zealanders who have health insurance.

Dr McPherson said the trend of rising healthcare costs was worrying. Costs have been increasing at well above the rate of inflation for many years.

"As the trend continues, an increasing proportion of people may find it harder to afford private healthcare."

The warning comes at a time when the affordability and coverage of accident compensation is also being debated.

The society has no debt and has an investment portfolio, valued at $411.4m at the end of the financial year. This generated $30.1m of income.

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