WA Insurer to Go Back to Hospital Cover Focus

WA’s biggest health insurer has warned of the industry’s need to get back to basics, covering hospital and essential health services to stop falling membership.

As insurers prepare to increase premiums by 3-4 per cent, HBF chief executive John Van Der Wielen said consumers wanted the best possible cover when they needed to go into hospital or visit the dentist.

Mr Van Der Wielen said his business had needed to go back to basics to keep its members, as private health cover in Australia fell under 50 per cent.

He confirmed HBF’s premium increase this year would be less than 4 per cent — the lowest in 10 years — but blamed rising health costs of 7 per cent a year for premiums rising at double the inflation rate.

“We have about one million existing members and they are more important to us than new members, and while of course we want new members, I think we lost our way there for a while,” Mr Van Der Wielen said.


“The focus has to be on looking after our existing customers and making sure our service improves, and the service in the past two years has been inferior.

“We’ve had to go back to the principles of hospital and health insurance as our core business, to look after people when they fall ill or need a health service.”

Mr Van Der Wielen said there were “pockets” that still needed reform, including non-clinical items such as fitness items that were costing too much. And though community events such as HBF Run for a Reason or Fitness in the Park were important, some health and wellness programs would not be repeated.

“Our costs did creep up too much over the last three to five years and we’re in the cycle now of getting those costs down,” he said. “This year we have a lower premium increase and we have cut our costs while improving our service in the first of what I see as a three-year program, which will also see us revamp our products.”

HBF had reduced its costs growth to a level below inflation by closing some branches, improving its call centre and divesting some older assets such as property.

It still took 100,000 phone calls a month, which Mr Van Der Wielen said was too many and reflected the inability of electronic technology to keep up.

He said the reforms to his industry were crucial while there were still record low interest rates.

“Interest rates can only go up, and if we think private health affordability is an issue today, it’s only going to get worse,” Mr Van Der Wielen said. “So we need to be planning now.”