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Private medical insurance – the umbrella you can only open when it isn’t raining

We had some pretty good news today: the PET scan which Judy had a week ago suggests that her chemotherapy and radiotherapy treatment has dealt to her oesophageal cancer. I say ‘suggests’ because we can’t be absolutely certain. Judy’s brilliant (and lovely) radiation oncologist is pretty sure that what may look like residual cancer on the scan is in fact inflammation resulting from the dilation treatment she’s having to widen her constricted oesophagus. All good.

Not so good is the fact that Southern Cross, to which we have contributed tens of thousands of dollars over the years, won’t pay for the PET scan. They only pay out on one PET scan per claim year, from 1 August to 31 July, and this was Judy’s third  in the current year.

I’ll come back to this but first a little background.

After my failed attempt to win the Miramar seat for Labour in 1972, I found myself unemployed and seemingly unemployable. Newly elected Prime Minister Norman Kirk, a collector of grievances,  had no interest in assisting his former candidate and the outlook seemed bleak.

To the rescue came the Public Service Association, a haven for failed Labour Party candidates, under the enlightened leadership of then General Secretary Dan Long.  I was given a job as a PSA "advisory officer." My principal task during that period was to write a paper on private medical insurance.

I concluded in this paper that private medical insurance was a social evil since it created a two-tier system in which the rich could afford the very best in medical services and treatment, while the poor queued with their begging bowls for the reluctant largesse of the public health system. Stripped of the hyperbole, I still think that’s more or less still the case. If you can afford private medical insurance, you won’t  wait as long to be treated and you’ll suffer in considerably more comfort than you would in the public system.

Naturally, when I’d accumulated a bob or two, I signed up to Southern Cross, a "not for profit" supplier of medical insurance.

Somewhere in the dark distant past of my PSA job demonising private medical insurance, I remember coming across this sentence: "Private medical insurance is the umbrella you can only open when it isn’t raining." I think that’s not only elegant but true.

Private medical insurance is no more generous or humane or socially responsible  than any other sort of insurance. Basically when you need them most, when, metaphorically speaking, it’s not just raining but pissing down, they need and want you least. They express their disinterest by massively increasing your premiums. The rot sets in when you hit 65.

So Judy has oesophageal cancer. Absolutely central to her diagnosis and treatment is the PET scan. The PET scan is the most reliable way of telling you whether you’ve beaten the cancer, whether it’s still there but restricted to its original site, or whether, in the worst scenario, it has spread to other parts of the body, metastasised. You can only describe this as "vital information."

In the current claim year Judy has had three PET scans. Each PET scan costs roughly $2500. Southern Cross paid for the first and contributed a generous $95 to the second. The policyholders, Judy and Brian, forked out the rest.

Judy’s third PET scan was roughly a week ago. Its purpose was essentially to tell her whether the cancer has been beaten. I already knew Southern Cross wouldn’t be footing the bill. I’d taken an earlier call from one of its reps. He’d got saccharine sympathy down to a T. But the message was clear: One PET scan only per claim year. We won’t be paying the bill for this one or any more this year. The policyholders, Judy and Brian, will.

The fact of the matter is that Judy is probably going to need PET scans every three to six months to monitor the battle that is going on between her treatment and the cancer. But despite the honey-tongued apologies of its call-centre operator, Southern Cross really doesn’t give a stuff. It’s all about the cash.

What’s more, the policy doesn’t make financial sense. PET scans could save it money by identifying metastasis at an early stage when it can be most easily treated. Cost: $2500 per scan. That would seem to me more economic than spending a hundred grand or more on late-stage surgery or other treatment.

Well, I can read your mind, or at least some of your minds: This bastard should consider himself lucky that he can afford private medical insurance. And you’re probably right. In a first world country like New Zealand, quality medical treatment should be instantly available to every citizen regardless of income or assets. But we aren’t there yet and I’m buggered if my wife is going to get anything less than the best. I thought Southern Cross would provide that. It doesn’t.

As I discovered all those years ago, private medical insurance is the umbrella you can only open when it isn’t raining – or not pouring down at least.

Finally, to avoid any possible misunderstanding, all of the medical and medical support staff we’ve met on this journey – the doctors, nurses, radiologists, technicians, receptionists, telephonists – have been wonderful and, yes, just plain lovely. Thanks.

Media trainer and commentator Dr Brian Edwards posts at Brian Edwards Media.

Comments and questions
12

I have Southern Cross which covered my radiation treatment for lymphatic cancer but I accept that certain scans and even some treatments may fall outside my cover.

If that happens I will pay.

If complaints like this increase the pressure to provide more and more expensive tests with no limitations then insurance premiums will become unaffordable.

I don't expect Southern Cross to bed the rules I rely on them sticking to them so I have certainty

Yes it is 'not for profit' but is located in the most expensive real estate area in the country (Britomart). Whereas with modern technology it could administer everything from a much lower cost. I gave up at 70 when the premiums just became too much even though I had never had a claim which exceeded the excess on my policy. It appears to be ruled by medical professionals whose objective is to maintain the income of their profession, instead of working to lower the cost of treatment for it's members.

I and many family and friends have been with Southern Cross for decades. Wife and I inherited our plans which were given in the beginning as an employee perk. Over years I have come to loathe the company albeit we have never made a claim. They deserve to be held accountable if only for their arrogant deceptive sales stance. Not for profit ? indeed, hogwash. Expensive mailouts I don't need or want. Fancy cars and premises and awash with staff all on good salaries no doubt. Plenty of money for fancy marketing. No attempt I guess to negotiate payment rates for services rendered by the consultants & surgeons etc The entire company looks and acts like insurance companies of any type, that is deceitful and odious. I still cant figure out how they justify such a massive disparity in corporate package premiums compared to individual policy rates. I reckon the place is run more for the benefit of their employees and contractors than their policy holders. So heres the rub. After old employers have given them a bucket load and I have since given truckloads of money I am now of an age that I might be a liability to them so they wont care a jot, and as my premiums everyone warns will explode soon such that I have to give them the flick. Do I jump into the state system now or later?

I can't quite see what your beef is here. It sounds like the policy charged premiums that gave entitlement to one PET scan a year. Are you claiming that they should make an exception in your case and pay for more than one? If so, imagine the consequences of others expecting - and receiving - the same: SC would soon be bankrupt and all those who'd paid "tens of thousands of dollars over the years" would nevertheless find themselves with no insurance at all.

I too have Southern Cross insurance, and am perfectly happy with it. One definite advantage for those who do not have such insurance is that I am not taking up a place on the waiting list.

As most surgeries are carried out by the same surgeons for both health insurance claims and those provided free by the public health system you may not be taking up a place on the waiting list but you surely must be lengthening it by jumping the queue.

The problem would be solved if the bludging "I want everything for free" Kiwi attitude ended & everyone paid towards Medical as every other country in world the does.
You get what you pay for people.

You are correct ,we do get what we pay for and in this case 50% of our taxes goes towards the NZ health system.So it aint free we have already paid for it.

50% - yeah right...ha ha ha

Medical insurance loopholes ... rich people problems.

Be grateful you can afford any insurance baby boomer.

For most Kiwis medical insurance is the stuff of fantasy, like winning a Porsche, or affording a home.

In hindsight, the policy details are not covering this unfortunate situation - however, it is good to know that New Zealand is the world's most socially progressive country.

First the public system is paid for out of taxes so kiwis dont bludge the public system - they pay for it. Second there does seem to be an issue around the growing gap between the maximum payouts that Southern Cross will fund versus the actual costs of for example surgery. Premium-payers and customers do not have visibility of the extent of that gap until they are about to get the bill or undertake the surgery. A well-funded public system has delivered pretty good outcomes for lower overall investment.