Diabetes and Private Health Insurance in Australia

Diabetes is a chronic disease affecting the body’s ability to regulate glucose through the production of insulin. In 2007-08, around 898,000 Australians self reported as having been diagnosed with diabetes at some point in their lives. The majority of these had Type 2 diabetes, with this disease accounting for 88% of people diagnosed^[1]. An estimated 275 people are newly diagnosed with diabetes each day in Australia, with 3.3 million Australians projected to be living with diabetes by 2031.

Diabetes represents a high cost and productivity burden in Australia, with the total financial cost of type 2 diabetes is estimated at $10.3 billion. Of this, carer costs were estimated as $4.4 billion, productivity losses were $4.1 billion, health system costs were $1.1 billion and $1.1 billion was due to obesity^[2]. In 2006, diabetes was listed as an underlying or secondary cause in almost 13,000 deaths in Australia^[3], and accounted for around 3% of all visits to a general practitioner^[4].

Diabetes in the Private Sector

Private health insurance paid for around 15% of all in-hospital episodes related to the treatment of diabetes^[5]. The amount paid was estimated $124 million in benefits for almost 15,000 hospital episodes for diabetes and diabetes related treatments for members in 2009-10.

• Although the majority of private health insurance members hospitalised for a diabetes related condition were aged between 40 and 75, around 500 episodes in 2009-10 were for patients aged under 30 years. Men accounted for a larger share of episodes overall (55%)^[6].
• Following legislative changes in 2007, private health insurance funds are now able to fund chronic disease management programs, with around 7,500 of these being funded for the treatment of members with diabetes in 2010. Benefits paid for these programs during the same period totalled $4.6 million^[7].
• Private health funds paid over $6 million for insulin pumps (used in diabetes type I). In 2010, over 1,000 privately insured members were supplied with insulin pumps in hospitals.^[8]
• Private health insurance funds paid benefits over $10,000 per episode for a significant number of in-hospital treatments related to diabetes in 2010. The highest of these was a claim for $110,712 for the treatment of Type 1 diabetes with musculoskeletal complications in a 59 year old man^[9].
• The average length of stay for an episode related to diabetes is around 7.2 days, compared to the average length of stay of 2.9 for all episodes for privately insured members in 2010^[10].
• 85% of diagnosed diabetes cases will develop in some stage of their life a serious complications affecting eyes, kidney or cardiovascular system. The estimated benefit paid by private health insurance towards inpatient episode related to diabetes complications ranged from $3,500 to $15,000.^[11]

Tags: Benefits, chronic disease, Costs, diabetes, health issues, Private Sector, Uncategorized