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PHIAC Archive - Industry Research

Note: This page is a representation of information published on the PHIAC website prior to 1 July 2015. This information is provided for reference and research purposes only.

In June 2013, PHIAC published Competition in the Australian Private Health Insurance Market (Research Paper 1). The paper drew on PHIAC data, academic literature and stakeholder submissions to our November 2012 discussion paper. PHIAC is pleased to now make available an updated version of this paper which examines the issues and trends in the light of industry activity up to 30 June 2014. This updated paper should continue to provide a relevant and valuable resource for all who have an interest in the functioning and regulation of this important component of the Australian health system.

The “Competition Paper” identified a number of issues critical to the effective functioning of a competitive PHI market that warranted more focussed examination. In the time available to us, we have prepared papers on the following:

  • Portability – the ease with which consumers can exercise their market power by switching from one insurer to another without penalty, underpinning competitive dynamics in the market;
  • Barriers to Entry – how difficult is it for a new enterprise to start up a private health insurance business and compete with the established players.
  • Risk Sharing between Consumers and Insurers – within the overarching conformity of a community rating regime how are insurers able to differentiate their products and what issues related to competition and market efficiency are raised.

Finally, in order to provide additional context to deliberations, we are also releasing a paper on trends since 2003 in privately insured hospital accommodation, medical services and prostheses.

I trust that these papers will provide readers with a sound basis for their consideration of the nature of the PHI market and the issues that impact on its efficiency and competitiveness.

Shaun Gath


Establishment of PHIAC’s Industry Research Capability

In the 2012 Budget PHIAC was allocated resources to enable it to:

  • engage with the industry around products, pricing strategies, premium applications, administrative costs and competition issues;
  • assist the Government with understanding cost drivers, opportunities for savings under the rebate and competitive pressures; and
  • support the interests of consumers by fostering increased competition in the industry and increasing the sophistication of the scrutiny of premium increases.
In undertaking this work, PHIAC will adopt a consultative approach to its research so that it can produce discussion papers that reflect the full range of stakeholder views and experience.
On 3 June 2013, PHIAC’s first Research Paper – Competition in the Australian Private Health Insurance Market was released. The paper summarises the development of the private health insurance industry in Australia, describes its current structure and presents a discussion of the major issues impacting on the industry’s competitiveness and efficiency as identified by stakeholders (submissions can be found here). The paper provides a foundation for future PHIAC research.