Private health insurance funding for mental health care in Australia

Extract of address to the International Mental Health Conference

More than 13 million Australians have private health insurance (PHI), and PHI funds more than 5.5 per cent of mental health expenditure. This share has increased significantly in recent years – it was 4.1 per cent just five years ago.

Private health insurance is increasing important in the mental health landscape and 2020 has led to an increase in the number of people needing support. Australian health funds are committed to supporting their members during COVID-19 and believe “high quality care” in mental health needs to be much more adaptable, and tailored to a person, their environment and their community.

Private health insurers have a vested interest in keeping people well. We know that if we can help people keep their mental health conditions managed, we can reduce their chances of having physical health ailments. We know that if people’s mental health is as good as it can be, then when they do need care for physical issues, it will be less expensive.

Yet the legislative restrictions around private health insurance are so tight, that it drives people towards an old-fashioned model of care which is expensive and inefficient. Private health insurance should be allowed to fund services to prevent hospitalisation. PHI should be flexible enough to help people get care in the community, if that is their preference.

We were pleased to see that the 6 October Federal Budget committed to promoting out of hospital care for people with private health insurance and nominated mental health care as a clear priority.

Late last year, Private Healthcare Australia started work on a set of principles to put out for consultation on what the industry should be looking at.

The central proposition of our Working Group was that the health system should offer consumers living with mental health conditions and at risk of an avoidable mental health-related hospitalisation access to enhanced multi-disciplinary, community-based, co-ordinated mental health services.

A modern, co-designed approach to mental health care in the community funded by private health insurance has the potential to be the start of a transformative change. We all need to do better.

The draft principles are:

1. Better outcomes for consumers living with mental health conditions
2. Enhanced models of community-based care drawing on multi-disciplinary teams
3. Financially sustainable for PHI funds, consumers and the health system
4. Collaborative approach to achieve change faster

The draft common elements in the framework are:

1.  Services are provided in community settings by multi-disciplinary teams.
2. An easy to identify initial point of contact for clinician referrers and self-referrers and undertakes triage to direct a consumer to the most appropriate pathway.
3. A navigation function ensures consumers have the relevant assessments including a psychiatric assessment, receive support to access the right mix of services at the right time, and receive support to transition out of the enhanced model of care back to support in the community and primary care service system.
4. Strong links to local or readily accessible services to facilitate rapid access when needed.
5. The ability to refer consumers to hospital for admission if that is appropriate.

The Australian Government will shortly issue a discussion paper on the subject. Private Healthcare Australia is keen to work with the Government to deliver an improved mental health care model for all Australians no matter where they live.